Aligning Reward Systems For Improved Organizational Performance

Part 4 of a 4 part blog series discussing employee motivational challenges.

Select and align rewards so that all parties are motivated to work toward the objective at hand. People will not actively work against their own interests. The idea of that is irrational. As a result, we have a much better chance of succeeding if the reward and incentive systems encourages our employees to act in the manner we are seeking.

This dynamic provides our employees with an incentive in the form of a reward if the employee delivers. This one-two punch creates in the employee a mental image of being rewarded and motivates them to push forward.
Our employees oftentimes respond to reward systems above any other lever we can pull. Reward systems are a form of feedback to employees. You are sending a signal about the nature of the work you want performed, as well as the performance level.

As a result, it is important to carefully select and leverage incentives to get employees to carry out the necessary behaviors. We also want to ensure that we are rewarding the employees who are making success happen.
Aubrey Daniels (2003) in the update to his classic book Bringing Out the Best in People: How to Apply the Astonishing Power of Positive Reinforcement recommends observing employees to figure out which rewards will be the most effective. He explains how to conduct this analysis:

• Identify behaviors that are producing the poor outcome and arrange consequences that will stop them

• Identify the behaviors that will produce the desirable outcomes

• Arrange consequences that will positively reinforce them

A ‘Case and Point’ experience with a sales team:

• The Objective: An organizational development team was tasked with getting an outside and an inside sales team to work together to increase sales revenue, as well as number of customers.

• The Intervention/Situation: Our very experienced team of HR professionals flew the outside sales team, who conduct customer visits, and the inside sales team, who sell via the phone, together for an in-person three day workshop. The session involved large group sessions where leadership explained the importance of having the sales teams work together. We also facilitated smaller sessions where the outside and inside sales people from the same region met face-to-face in an attempt to overcome any barriers.

• The Outcome/Lesson: The punch line is that the reward system in the form of commissions was not adjusted to the extent needed in order to create a financial incentive for these sales people to work together. Not surprisingly, the result was that the salespeople did not work together for increased sales until the reward structure was aligned several years later.

Key Questions: Rewards and Recognition

• What business unit reward/ recognition systems are in place to drive business performance, and are they understood?

• Do we have a defined, common and aligned reward system continuum?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Published by Kevin Anderson, Dr. Organizational Design (OD)

Kevin Anderson is a leading expert in organizational design and performance, leadership, large scale change projects, business process engineering and talent and culture initiatives. Kevin has over twenty five years of experience in designing and delivering high impact, global organizational solutions. He is a Senior Organizational Development Consultant at Cargill where he leads efforts around team effectiveness, organizational design, culture and change management. Kevin diagnoses, proposes and delivers solutions in the Talent Performance domain. He has also created and rolled out Leadership Development and Organizational Development for the City of Minneapolis. Before that Kevin successfully worked with Accelare consulting health care, retail and university clients to create actionable strategic plans. In addition, he has served as an organizational development leader at Thomson Reuters working with legal, financial and scientific products. Kevin has a Doctorate in Organizational Leadership, Policy and Development and a Masters of Arts in Public Policy and Management from the University of Minnesota. His Bachelors Degree in Speech Communications and Political Science is from Macalester College.

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