During my Beyond Buy-in webinar a couple of weeks ago, one of the attendees mentioned that different leaders are motivated by different things, and that there is no one-size-fits-all incentive. How true! Now that the comment has had time to percolate, here are some thoughts.
I would like to talk about the difference between fair and equal.
Fair: Getting something of equal value to the effort expended, relative to everyone else.
Equal: Getting the same reward as everyone else regardless of input.
Equal incentives are frequently used for team rewards – a group of people working toward a common goal, and everyone will receive the same reward if the team succeeds. Equal rewards often seem unfair, since every person contributes individually to the effort – especially if the target is missed. On the other hand, equal rewards do engender mutual accountability and collaboration, if the culture allows.
Fair incentives can be tricky, because not everyone associates the same value with the same reward. Besides money, rewards for individual performance might be promotions, time off, more responsibility, parking spaces and other perks. Not only is perceived value different, but the criteria for determining who gets what is often subjective, or at least apples and oranges. At the same time, people like being recognized for their own contributions.
When possible, it’s best to use intrinsic motivation and exclude incentive programs altogether. The recent McKinsey article, “The Irrational Side of Change Management,” lists five different forms of motivation, in terms of impact of the change initiative:
- Impact on Society
- Impact on the Customer
- Impact on the Company
- Impact on the Team
- Impact on Me
If the company and your change initiative can tap into each of these sources of motivation, then each person will select which one is most fulfilling to them. Now that would be fair and equal!