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Are your incentives working against high performance?

Posted by Meg Bear on September 21, 2009


354260437_c62113ba63Is it possible that financial incentives can have a negative impact on performance?  Dan Pink makes an outstanding case for the idea that traditional incentive programs work very well but only for limited types of problems.   Mechanical tasks, things with known processes and a consistent outcomes see improvement with financial incentives.

On the other hand, problems and jobs that require creative thinking can actually have decreased performance with financial incentives.

Of course, how many of us have jobs that do not require creative thinking and problem solving? How many of our businesses only require consistent execution of repetitive tasks?

Dan’s point is that the three things that impact performance in a cognitive-heavy job are:

  • Autonomy
  • Mastery
  • Purpose

Once pay is fair and appropriate, you need to look at harnessing the unseen intrinsic drivers in people to create high performance results.

To my mind, this is just another way to look at a companies responsibility for Job Fit.  It’s not just about wanting to have a touchy-feely place to work, it’s about beating the competition in productivity.

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h/t to my buddy CK for the link.  Anyone else out there wish they could see TED in person?  I’ll bet it’s a lot of fun.

2 Responses to “Are your incentives working against high performance?”

  1. […] really want to get to a TED Conference in person.  I mentioned this here and […]

  2. […] Let’s only pay performance-based incentives for activities that we deem routinized and, frankly, unappealing (yet are necessary and important).  We need to be honest about what the incentive signals and what kind of behavior will result. […]

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