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HowCompaniesGetMotivationWRONG!KurtNelsonManycompaniesgetmotivationright…Manycompaniesgetmotivationright…Yeahforthem!ButmanycompaniesgetmotivationwrongAndsomegetitspectacularlywrong!Andsomegetitspectacularlywrong!Ouch!Andthat’snotgoodAndthat’snotgoodDecreasedMotivationLeadsto:LowerproductivityHigherturnoverDecreasedsalesLackofcreativityInourworkwithcompaniesacrossthecountry,wehavehadtheopportunitytoexaminewhythishappens…Inourworkwithcompaniesacrossthecountry,wehavehadtheopportunitytoexaminewhythishappens…AndunderstandingisthefirststepingettingitRIGHTHereisashortlistthatdescribesjustafewofthemorecommonmistakesthatwe’veseen1.FocustoomuchonthedrivetoAcquire(i.e.,thepayplan)1.FocustoomuchonthedrivetoAcquire(i.e.,thepayplan)Companiesthatdomotivationrighthaveacomprehensiveplanthatemphasizesmorethanjustpay.Theyfocuson:•Teamwork•WorkEnvironment•Work/LifeBalance•GrowthOpportunities•NewChallenges•CommitmenttoIdeals•CorporateIdentity•BroaderPurposeforEmployee2.Don’tgivefrontlinemanagersenoughdiscretion2.Don’tgivefrontlinemanagersenoughdiscretionFrontlinemanagerstypicallyhavethegreatestimpactonindividualemployeesperceptionaboutthecompany.Limitinghowtheycanmotivateornottrustingthemtodoitrightdecreasestheirmotivationaleffectiveness.3.Don’tgivefrontlinemanagersenoughtools3.Don’tgivefrontlinemanagersenoughtoolsCompaniesthatdomotivationrightprovidetheirmanagerswith:•MotivationalTraining(e.g.,“HowtoMotivate101”)•DiscretionaryRewardPrograms•EasytoUseReports•MotivationalSupportfromhomeoffice•“OntheSpot”Awards4.Makingincentivestoocomplex4.MakingincentivestoocomplexWhilecompaniesmightwanttomaketheirICplansmorecomplextotrytoensurefairnessormeetcertainbudgetexpectations…Themorecomplexandhardertheyaretounderstand,thelesseffectiveincentiveplansareatdrivingbehaviorchange.5.Rewardingthewrongthings5.RewardingthewrongthingsToooften,companiesgoodintentionscanleadtorewardingthewrongbehavior.Themostcommonmistakes:1.Rewardingthingsthatarenotinalignmentwithstrategy2.Rewardthingsbecausetheyareeasytomeasure3.Rewardshavebecomeentitlementsandperceivedas“unchangeable”6.Notcommunicatingenough6.NotcommunicatingenoughHighlymotivatingcompaniesovercommunicatetotheiremployees–regardingtheir:•PayPlans•TotalRewardsStrategy•RewardCulture•CompanyMissionAllofthesearevitaltoahighlymotivatedworkforce.7.Focusingonthe“cost”ofmotivationalprograms–nottheresults7.Focusingonthe“cost”ofmotivationalprograms–nottheresultsFocusingonthe“cost”ofaprogramisshortsighted.Therealfocusshouldbeonthemotivationthattheprograminstillsandtheresultsor“lift”theprogramhasonperformance.Cheapestisn’talwaysthebest!Doesanyofthissoundfamiliar?Therealquestionis…Therealquestionis…whattodoaboutthis?FirstrecognizingwherewetendtogowrongiskeyFirstrecognizingwherewetendtogowrongiskeyWejustcoveredthat…Thenwemergetheoryandexpertisetodevelopsolutionsusing…The4-DriveModelEmployeeMotivationofLawrence&Nohria2002Thenwemergetheoryandexpertisetodevelopsolutionsusing…AcquireBondChallenge&ComprehendDefendThe4-DrivesAcquireBondChallenge&ComprehendDefendWeneedtofocusonALL4Drivestogether(notjustAcquire)Thengivefrontlinemanagersthetools,thetrainingandthediscretiontousethemeffectivelyThengivefrontlinemanagersthetools,thetrainingandthediscretiontousethemeffectivelyTools:•Easytousesalesorperformancereports•Managerdiscretionaryincentives(cashandnon-cash)•Simple“OntheSpot”Awards•Recognitionprograms–peer-to-peer,managernominated,VPreview•Trainingonhowtouserewardseffectively/motivateemployeesDiscretion:•ProvideManagerswithclearobjectives•CreaterulesthatareflexibleenoughtoaccommodateManagersspecialsituations•Monitoronlyforbiasandcheating•Utilizeonlineplatformstomanageprogramsandprovideflexibility•DirectaccesstoIC/HRteamSimplify,simplify,simplifySimplify,simplify,simplifyReworkyourincentiveplanstosimplifythem:1.Reducethenumberofitemsyou’repayingon(3orlessisbest)2.Focusonlyonkeyresultsthatpeoplehavecontrolover3.Simplifythemathforcalculatingearnings/winning4.Limitthenumberofqualifiers,multipliers,kickersorotherfactorsConductananalysisonwhatbehaviorsyourrewardprogramsaredrivingConductananalysisonwhatbehaviorsyourrewardprogramsaredrivingConductresearchtoensurethatyourprogramsare:1.Drivingbehaviorthatisin-linewithcompanystrategy(e.g.,profitnotjustrevenue)2.Measuringtheappropriateresults/behaviorsandnotjustthosethatareeasytoquantify3.Havenotbecomesoentrenchedthattheyareperceivedasentitlementsandnotincentives4.Leveraging(notduplicating)otherincentivesorpayplansinthebehaviorstheyarerewardingAndmakesurethatthisisALLcommunicatedwithaPASSION!AndmakesurethatthisisALLcommunicatedwithaPASSION!Utilizelivemeetings,welldonePowerPointpresentations,professionalprintandonlinecommunications,voicemails,flashe-mails,memo’s,managertalkingpoints,posters,etc…Finally–don’tletPurchasingfocusyoujustonthedirectcostofaprogram–makesureyoulookathowtheprogramdrivesmotivationandresults.Aprogramthatincreasessalesperformance1%ata$1Billiondollarcompany=$10MillioninadditionalsalesFinally–don’tletPurchasingfocusyoujustonthedirectcostofaprogram–makesureyoulooka