Let me demotivate you: Incentives at work.

In business, in the Work Programme, in sales departments, on production lines and at governmental level, leaders consistently and regularly use incentives to incite greater effort and productivity. Effort is the thing that every business, every governmental scheme and every sales department wants to maintain.

So do incentives work?

Obviously it depends, however it seems we have quite a simplistic view of incentives: Offer a reward, usually monetary, for specific task completion and effort will increase.  Unfortunately us humans are much more complex than that, and the actual truth from the psychological literature is that some of the things that organisations do intending to motivate people often backfire and reduce performance and compliance with the desired results.  It seems we don’t know what else to do, and sometimes even when an incentive does not increase effort, we resort to ever increasing the ‘value’ of the incentive, hoping that eventually the effort on the task will be increased.

Research shows that are three things that organisations can look at before designing incentive schemes, there are many more too, but we can start with these:

1. Motive to reciprocate…kindness counts

People are quite simple in that they are motivated to voluntarily cooperate with their boss, superior or an organization if they are treated kindly.  We all have discretion over the intensity or type of activity we perform and if we feel we are being treated badly, we may very well adjust the level of effort we are prepared to put in.  Furthermore, we always know that there is some material gain for bosses, superiors or organisations if the task is completed well and we put in lots of effort.  Quite simply, we will be less likely to want to contribute to the gain that the boss or superior gets if we think they are not treating us well.

Straight away we can see that even if you have a massively generous contract (e.g. benefits system, commission payments, bonus scheme) but then there is an explicit threat in the contract of, for example, firing or sanctioning, then the levels of effort expected and perceived generosity do not go together.

If we do not want to contribute to the ‘boss’s’ material gain, we will adjust our effort accordingly.  And yes, this is even if it is detrimental to us too.

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2. Social Approval

We all, to differing degrees, want to be the object of others’ admiration and not be the object of their disapproval, contempt and disgust.  So sometimes we do things just because we do and just for social approval and feelings of connections, despite what material benefits there may be on offer.  So an award scheme may be seen to be a good example of how we publicly offer admiration of colleagues for those that win the prize, but what of the people who participate and don’t win an award?  Are they left shamed?  If they are left shamed, there are a lot of people lacking any social approval incentives and their effort will be minimal and dimished.  So although there is the temptation for organisations to create a super competitive environment to encourage effort, the reality is that if there is any shaming of people, effort may be catastrophically affected.  The ‘Sales Board’ could have it’s very own chapter right here because it totally relies on a culture of public shaming and may well be negatively affecting 80-90% of your sales teams.

There is another problem with monetary incentives for behavior that people would just do anyway – it diminishes the experience of that task.  If we are paying or incentivizing, or controlling, what people would do anyway it takes away the intrinsic pleasure of doing that task. Furthermore, if the behavior we are incentivizing is a moral behavior, we can now no longer trust whether someone is actually moral, or indeed they are only behaving morally because they are being incentivized to do so.  Paying people for moral behavior is a total contradiction, it can no longer be moral by definition, and so can no longer be a source of social approval and therefore have a detrimental effect on effort and also task compliance.  Sales departments and call centres beware – are you paying people to be polite and yet still having masses of customer complaints?

The harsh truth is that money can decrease the psychological incentive to perform the activity and rewarding people monetarily for obeying social norms may in fact weaken norm enforcement.

 3. Enjoyment of tasks

People are motivated when they enjoy the task, and it seems historically that economists have assumed that people dislike effort and so require monetary encouragement to put in that extra effort.  And as we have already seen from the research above, adding a monetary reward to a task that already has pleasure starts crowding out that intrinsic pleasure and we soon forget we actually liked the task just for it’s own sake.  What is worse is that we then become reliant on the monetary reward for completing the task, so then if the incentive is removed or changed, we stop doing the task voluntarily.  All the fun has been sucked out and we are in a worse place than we were to start with!    Incentives become like the drug to get people to do things to maximum effort, and the irony being that in times gone by, they would have done them anyway without any incentive!

So, there we have three ways in which we can easily and accidentally demotivate when we really intend to motivate.  We are a complicated lot. And money, it seems, does not always make the world go round.

 

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Confidence is not a dirty word

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Confidence is the thing that keeps us moving, the secret ingredient to action, the antidote to inactivity and stagnation.  Be it willingness to invest money, time, feelings, emotions, reputation or resources, confidence will either prompt us into change or halt us in our tracks. 

 

There is so much written about confidence and how to build it and we psychologists barely even dare to use the word for fear of having to try and explain what it is.  I think we all pretty much know the feeling of confidence, even though it is hard to explain and it comes from trusting that the future, people and things will be OK (optimism), combined with the knowledge our abilities will complete the task, handle the situation or deal with the emotions.  When we know these two things, we will go for it and be ‘confident’.

 

Some research out recently (http://www.psychologicalscience.org/index.php/news/releases/people-are-overly-confident-in-their-own-knowledge-despite-errors.html)  got me thinking, it says that we are “predisposed to think positively about ourselves” and that more people are becoming over-confident in their abilities, that is more people believe they are actually better than they are in reality.  When I read this, it didn’t make much sense to what I experience in dealing with people and their confidence every day.  Indeed I very rarely meet what I would call a truly confident person, never mind someone who is ‘over-confident’.  That would be utopia right?  To be completely comfortable in your own skin to take on anything without a second glance about others thinking you are weak or useless and not being paralysed by things like failure.

 

So what is this over-confidence that the research talks about? I’m not sure it has anything to do with the word ‘confidence’ at all.  When people have an excessive certainty in the accuracy of their knowledge, over-estimate their ability to do a task and believe they are better placed than others to do a task, this has nothing to do with that marvelous feeling of confidence most of us have experienced at some time, and everything to do with faulty thinking and a total lack of humility. 

 

Are these people the research is describing just the dominant, aggressive, arrogant, possibly narcissistic people that we see in many organisations and certainly in life?   The ones who talk the talk with a swaggering charm however they are actually driven by a total lack of self-worth, quite the opposite to the good feeling you get from being authentically confident.  They are the ones who encourage risks without the facts, the ones who belittle others for mistakes and “stubbornly cling to one’s opinions in the face of disconfirming evidence”. This quote might just sum up the feeling they actually be experiencing:  “The mass of men lead lives of quiet desperation”, (Henry David Thoreau, Walden).

 

So, this has nothing at all to do with confidence and perhaps we are good to say that  and label it for what it actually is because I would never want anyone to think that you can have too much of true and authentic confidence, because you really can’t.     Confidence is not a dirty word and should never ever be used in that way.

Hitting the spot…..

The NAO warned last week that the Work Programme is passing over harder-to-help claimants in favour of easier cases as service providers seek to protect profits. I think no-one in the industry can argue with that fact: in order to survive in the Work Programme, providers have to hit hard and fast with the ‘easier’ customers and get the cash rolling.

So what’s the problem, why the warning? If we look not too far into the future we can see a storm brewing because the Work Programme has been set up with a marvelous dichotomy right at it’s very core. The Work Programme wants performance, performance, and performance. Numbers, numbers and numbers. Sustainability, sustainability and sustainability. That is fine, and perfectly reasonable and rightly ambitious. But this emphasis on quantity has started to further dehumanize a system that involves, well……humans as it’s output. You are entering dangerous territory when you forget the human factors and in this case will start to make worse the very problem it is trying to solve.

Take this quote from an unemployed man on the Work Programme,

Thirty-eight year-old Martin Williams, from St Helens, has been on the work programme for five months.
Having been unemployed for eight years and attended previous back-to-work schemes with the same contractor, he is understandably frustrated.
“They haven’t helped me at all. It dehumanises you, and you feel worse,” said Mr Williams.
“It got to the stage where I thought I’d rather be hit by a bus than come in here which is not the right frame of mind to be in when you are looking for a job.”

(http://www.bbc.co.uk/news/business-16883641)

What this person describes is a system that is highly standardized. There is very little discretion allowed by the people who work in it (i.e. no humanizing allowed), and the outcome is a mechanical and robotic interaction and performance, numbers and sustainability become pipe dreams to say the least.

So, if performance, numbers and sustainability are the required outcome, then the Work Programme could look to changing a few things, but in the meantime (and bearing in mind that change probably won’t happen) maybe there is a radical solution for providers to start to hit the numbers that the Work Programme requires. This is changing the way in which people like Mr. Williams view this system, their unemployment and the challenges they face. If we can make him more resilient to what is coming his way, lift him out of the helpless and angry state he finds himself in and get him in “the right frame of mind” to find a job, despite the Work Programme. Providers then maybe will see light at the end of the tunnel.

Get the ‘harder-to-help’ claimants mentally fit and ready for the challenge of navigating the Work Programme and unemployment in general, and the performance, numbers and sustainability will follow. We have figures to prove that this works – three times as many people will go back to work if they change the way in which they think about the system and their unemployment, and get their mindset into one of persistence and resilience not apathy and inertia .

For any information on JL Work Solutions’ innovative Attitudinal Change programme for ‘harder-to-help’ claimants, contact us at info@jlworksolutions.com

The Feckless Workless

Iain Duncan Smith said he wants to “cure the sin of worklessness”, Chris Grayling said it was “high time” people just got a job, while Tory peer Howard Flight said that benefits encourage “breeding” amongst poor people. There is and always has been a strong negative narrative about unemployed people and others tend to lump unemployed people into categories – they are either feckless, lazy, lunatics or stupid, sometimes all four.

This sort of stereotyping is absolutely pervasive in our culture – there are rarely any positive representations of unemployed people in any of our media outlets. Instead we are treated to the Shameless characters who personify the categories above, generally with an added bonus of criminality too.

So when we embarked on our latest training project with groups of long term unemployed people in January, it was no surprise that we were constantly being told by anyone and everyone that the group of people we were going to be training were going to be “hard work”, “difficult”, possibly “violent”, won’t bother to attend because they “just don’t want to get a job” and they have “got an easy life” so why will they want to change?

We therefore embarked on the project with great fear that we had got it totally wrong and our training would not be of any benefit for these people. But we started by meeting all the training delegates individually, as we do with all our training delegates. We know from the research in Psychology that unemployment brings with it many psychological problems such as social exclusion, risk taking behaviours such as excessive alcohol and drug taking, depression and stress, but nothing can quite prepare you for the reality of how unemployment really affects people, and especially men.

The people we interviewed on that day showed amazing humility but each and every one of them showed signs of total helplessness at their situation; disgusted with themselves for being there but unable to see a way of getting out. How it feels to be unemployed was summed up by a bright hooded young man who said “I just feel wounded”.  Wounded is a powerful word, and he meant it to be powerful, such is the devastation caused by being unemployed.  Every corner he turns there is someone to criticise him, to judge him, to tell him he is useless, to tell him to ‘just try harder’ – yet the true reality is that not one of these people wanted to be where they were, why would they? Not one of them wanted to be on benefits, it is certainly anything but an easy life. But for most of them, their resolve had been battered, their motivation sapped, their self worth drained, and they could see no way out. Most harmfully of all, they didn’t think they deserved to get out. The barriers were truly psychological and helplessness was at the top of the list.

Our philosophy has always been that you attract more flies with honey than with vinegar, and our training proved a powerful illustration of this aphorism: treat people with respect and understanding, treat people how you would be wished to treated yourself and together you will achieve great things. So by not simply succumbing to the stereotype and the prejudice, we scratched beneath the surface, we delivered our training, we had great fun and we all achieved much more than we ever expected.

Is this really what we want our salespeople to look like?

Last year I completed some research exploring the role of Psychopathy on sales performance. After sampling 190 sales people and their sales results, the outcome was that those who displayed two of the factors of Psychopathy were the more successful sales people.

The two factors of Psychopathy showing a positive correlation with sales performance were Machiavellian Egocentricity and Fearlessness. They turned out to be pretty good predictors of sales performance. Someone who is Machiavellian attempts to achieve their goals by cunning, scheming, and unscrupulous methods. Someone who displays fearlessness has a shortage of fear in social situations, and often impulsivity of behaviour. I think we can all recognise these traits as being something a stereotypical sales person might display.

But what does this say about what we expect from our salespeople? Are we saying that only those who display some of the elements of a psychopath can survive in sales? Is the challenge to our inner motivations by sales so great that you need to be a sub-clinical Psychopath to succeed in it?

There are certainly many implications from the research in terms of recruitment and management of sales people, however I think the main point is the recognition of sales being a very motivationally challenging role. Thus, to be truly successful and move away from the much perpetuated and accepted 80/20 Pareto’s Law, organisations must help and train sales people to be able to deal with the very specific challenges to motivation that sales involves, without necessarily encouraging Psychopathy !

In recognition of Emotional Labour

Call centres are usually reported to have staggeringly high level of turnover and burnout of staff, costing organisations a lot of money in recruitment and training. And no-one seems to be able to solve the problem. One of the things I think they miss is that call centre work is emotional. By that I mean that there are considerable aspects of their tasks that uniquely makes demands on the worker’s emotions. Taylor and Bain (1999) described call centre work as an “assembly line in the head”.

Workers in a call centre are forced to empathise with the customer, manage the tone of their voice, control their emotions and “smile down the phone”, even if the customer is being difficult and they feel entirely different about the situation. Ask any Psychologist and they will tell you that asking humans to consistently behave in a way in which is not how they actually feel about the situation, doesn’t acknowledge how they feel and allows them no independence of thought, is a sure fire path to burnout. Burnout means ” no more to give, no energy left and no hope of change in the current situation”.

Who can blame them? Research by Dr Dieter Zapf of Frankfurt University suggests that workers who constantly have to pretend to be friendly to customers suffer from higher rates of depression and illness. Flight attendants, sales personnel and call centre operators are most at risk, he says. “Every time a person is forced to repress his true feelings, there are negative consequences for his health,” says Professor Dieter Zapf. In the call centre world, this translates into turnover and burnout.

So the question remains, what can call centres do to tackle the staggering turnover of staff in call centres? In my opinion, more needs to be done to tackle the emotional health of workers because as we have seen there are constant emotional demands being put on the workers, and this is precisely what we ignore, yet we ignore it at our peril.

Training people to deal with adversity and to have a deep understanding of the interactions they are undertaking will help, but at an organisational level, aligning the strategy with realistic emotional demands will make the world of difference.

Do sales incentives incentivise?

There is a very narrow definition of incentives in the sales domain.  It seems to be assumed that if you offer a sales person extra money, they will put in extra work.  Incentives schemes are generally developed by accountants, and are always developed with the bottom line in mind, and more often than not fail to assess whether the incentives are changing the behaviour of sales people for the better.

Psychology says something very different to the accountant versed in Economics.  The research on the psychological foundations of incentives shows that monetary incentives often backfire and in fact reduce the performance of sales people and/or their compliance with rules.

This is counter-intuitive and goes against the whole ethos of sales management as we see it today, so let me explain what the research says in some more detail.  There is no doubt that people engage in many tasks and activities because they enjoy them – these tasks provide intrinsic pleasure – that is, they are a reward in themselves.  But in the real world, most people do not have perfect knowledge about the reasons for performing a task – they are not conscious of whether they are doing it just for doing it’s sake, or for some other motive.  That is, they do not know perfectly to what extent a task’s intrinsic feature motivate their behaviour.

However, what is clear is that when you add an extrinsic reward for work, such as sales bonuses and sales commissions, you have the very real danger of reducing any intrinsic pleasure people have in the job and thus negatively affecting motivation and effort. It is known in the field as ‘crowding out’ intrinsic motivation.  You can start to see the danger.

There are many many theories in Psychology about motivations and incentives, but all the research over the last few decades shows that the desire to avoid risk (i.e. sacking due to non-performance) and generating income is important for sales people, and therefore effort is made in that respect, but of equal or arguably greater importance are the non-pecuniary motives that shape human behaviour.  And it is exactly this that current sales structures do not take into account – is it really the right way to incentive sales people with a % on their sale?  What is this actually doing to their behaviour?  We all assume it is making them put in extra effort – but what if it is doing the opposite?

An interesting case study in what I am talking about comes from Carphone Warehouse – they dropped their commission structure and got the results they had been after !

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