"Why the Most Important
Success Ingredient
Has
Nothing to Do With Rewards!"
It amazes me how often I see
organisations launch into an expensive incentive programme
because some 'bright spark' said in the board or management
meeting, when sales or customer service performance was below
expectation or budget, "we need an incentive" rather than saying
"we need to become more professional in how we manage, recognize
and reward performance".
If your organisation is too
close to this description for comfort, it may be time to give
serious thought to pulling the entire incentive budget and begin
re-building from the beginning.
A number of companies have
completely 'missed the point' that massive increases in
performance can be achieved by simply clarifying their key
performance indicator criteria and then monitoring performance
against those criteria.
In fact up to 75% of performance improvement potential can be
achieved by getting measurement and recognition right before
even thinking about developing an incentive programme.
Take for example the wonderful
piece of research undertaken right back in 1939 at a factory
where they sought to test the impact of improved lighting on
assembly line efficiency.
As expected, when they
increased the amount of light, performance went up. But,
fortunately, the researchers were sensible enough to want to see
if the reverse was also true. - So they reduced the light,
expecting to see performance decline.
However, the opposite of what
they expected to see happened and they saw performance continue
to improve right until they reached the lighting equivalent of
moon-light - where presumably the health and safety officer, or
latter-day equivalent, called a halt to the whole thing before
somebody started losing important parts of their anatomy!
What happened here has become
known as the Hawthorne effect, after the factory where the
research took place.
It is a plain and simple
truth, and it forms the basis of our approach to providing
automated performance management and reward solutions. If people
know that what they are doing is important enough to measure,
and the measures of their performance are presented back to them
and their colleagues in a timely and respectful manner, human
nature kicks-in and 85% of them want to look good. (We’ve all
met the other 15%!).
And it doesn’t only hold true
for internal staff incentives, but trade/channel/partner
promotions also benefit from communicating key performance
criteria with accounts/brokers/resellers… and letting them know
that their contribution is important enough to be closely
watched and managed, and their feedback taken seriously.
In fact, research by Gartner
revealed that companies which failed to provide regular and
timely information and rewards risked a 20% decline in
performance, compared with those who achieved it, as a direct
result, across a range of vertical industries.
Unfortunately, where
professional management is concerned, there is no such thing as
a 'quick-fix'.
But, that being said, we have
brought together a number of tools which will help you to radically reduce
the time it will take you to get your programmes up and running.
David Burton
Copyright ©
2005. Performance Bonus Limited
Stewart House, The Back
Chepstow, Monmouthshire
United Kingdom
NP16 5HH.
Tel: (44) 01291 623355
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