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In my consulting work, I still see organizations holding on to outdated metrics and systems.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:
Are promotions given to those who have clearly contributed to current strategies? Did a promotion announcement accurately depict the person’s accomplishments?
Is there an effective balance between individual and team measures?
Have strategic goals been translated from vague terminology into specific outcomes? Are performance metrics tied to today’s desired outcomes?
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?
Do problems stay hidden until they become a public nightmare?
Is communication filtered or massaged before it travels up the chain of command? Are problems and challenges hidden?
How quickly is teamwork, outstanding service or initiative recognized?
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.