Wednesday, April 20, 2011

Incentives

Two of the readings for this week were all about how to execute or implement strategy. In the HBS reading, "Seeking Alignment," the authors concentrated on the importance of people and incentives when it comes to implementing strategy.

Normally, I would say a rewards system for great performance makes a lot of sense, until I read an ex-employee message board for a certain company that will remain nameless. I realize, most of the people who would go out of their way to post on the message board are probably disgruntled in the first place, but a common theme arose from all of the responses: pros - great pay & bonuses, cons - no job security. Basically, workers in the warehouse were incentivized to be extremely productive, and if they did so, they were rewarded handsomely. At the same time, if you performed below par, you were almost guaranteed to be placed on the chopping block. In the end, many people on the message board wrote, the high wages were not worth the stress, and said the last day on the job was the best day of their lives.

Human beings are more complex, and incentives are not the only thing that motivates us. In fact, this article is missing the most important step for strategy implementation - mobilization. As Kouzes and Posner will tell us, one of the most important steps in being a great leader is creating a shared vision with your staff or team: http://changingminds.org/books/book_reviews/kouzes_posner.htm Without mobilization, you are treating your employees like children. We learn as we grow older that we should eat our vegetables because they are good for us, not because it means we will avoid punishment or get a treat from mommy or daddy. Incentives without a shared vision only produce short-sighted, short-term results.

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