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Are You Rewarding A While Requiring B?

I decided on my doctoral thesis topic after reading Steven Kerr’s 1975 article, The Folly of Rewarding A When Hoping for B, in the Academy of Management Journal (volume 18, pps.769-782). In the decades since this published, one might assume that organizations revised their reward practices to match their current strategy. Unfortunately, many have not.

“If a company is to obtain the needed contributions,
it must reward those who make them

Peter F. Drucker

In my consulting work, I still see organizations holding on to outdated metrics and systems. Many still promote individual stars despite needing teamwork. These organizations focus on short-term measures overlooking long-term impact. Despite a desire for openness and transparency, in some organizations providing honest feedback results in your being labeled a “non-team player.” Just as offering innovative ideas in response to requests can either advance or hinder a career. So it should come as no surprise that employees monitor and value actions more than pronouncements.

Check how well your organization’s recognition practices encourage desired outcome to meet current goals by asking the following:

  1. Are promotions given to those who have clearly contributed to current strategies? Did a promotion announcement accurately depict the person’s accomplishments?
  2. Is there an effective balance between individual and team measures?
  3. Have strategic goals been translated from vague terminology into specific outcomes? Are performance metrics tied to today’s desired outcomes?
  4. When a mistake occurs is the first question: who is responsible or what can we learn? What happens to those who take a risk but miss the target?
  5. Do problems stay hidden until they become a public nightmare?
  6. Is communication filtered or massaged before it travels up the chain of command? Are problems and challenges hidden?
  7. How quickly is teamwork, outstanding service or initiative recognized?
  8. Is reward system re-alignment a key part of the strategic planning process?

The good news is that some companies recognize disconnects within their recognition systems. Proctor and Gamble revised their reward systems to target what they wanted: product line sales growth.

Dr. Mary Lippitthttp://www.enterprisemgt.com
Dr. Mary Lippitt is an award-winning author of "Brilliant or Blunder: 6 Ways Leaders Navigate Uncertainty, Opportunity, and Complexity.” She founded Enterprise Management Ltd. in 1984 to provide leaders with practical and effective solutions to navigate the modern business climate using situational mastery. Dr. Lippitt is a thought leader and speaker on executing change, optimal leadership, and situational analysis. She currently teaches in the MBA program at the University of South Florida. Mary is also the author of Situational Mindsets: Targeting What Matters When It Matters.

3 COMMENTS

    • I agree with you that we must reward the behavior and outcomes we seek. Just read that GE is doing away with their old performance appraisal and is going to use all the email notes over the year as a replacement. The article cited the need to give feedback frequently which is smart. Thanks for your comment
      Mary

      • Dr. Lippitt, thanks for an insightful article.

        I have read many times that GE fired the bottom 10% each year but that means they replace half their employees every five years.

        Whenever I hear that an employer fires the bottom 10% each year it tells me they are making many hiring mistakes each year.

        Some employers would be firing very good employees if they had to fire the bottom 10%.

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