The culture you get is the one you incentivise
Friday, October 18, 2013/
If you have employees, here’s an essential question for you to ponder: What culture are you encouraging in your business?
If you’re yet to hire your first employee, an alternative question is what sort of culture do you want to encourage when you start hiring?
Phrased differently, what would a rational person do in your workplace?
Now, here is an absolutely crucial point that often gets forgotten: The behaviour you reward within your organisation might be different to the behaviour you explicitly ask for.
If you want a great example of this forgotten point, take a look at the public service. It’s a bureaucratic mess where little ever gets done. It includes a lot of design-by-committee, red tape, paperwork and intra-departmental factional fiefdoms.
Of course, there is no departmental secretary who woke up one morning and ordered his or her bureaucrats to be lazy paper shufflers who “work” six hours a day, after getting into the office sometime around their rostered morning tea break.
In fact, if you look at the government department motherhood statements (sorry, “mission” statements) where it’s spelled out what bureaucrats are supposed to do, you will find they all read something like this:
“Our mission is to improve the wellbeing of the Australian people by providing sound and timely advice to the Government, based on objective and thorough analysis of options, and by assisting the relevant Ministers in the administration of their responsibilities and the implementation of Government decisions.”
It’s not the official motherhood statements that turn bureaucrats into the unproductive wastes of tax dollars they are. Rather, they bludge because the incentives are wrong.
If you create a highly hierarchical environment (like the Australian Federal Public Service) where people are guaranteed jobs for life, largely unaccountable policies and procedures rule over outcomes and the only way to gain power is to create more paperwork for someone else, you incentivise paper-shuffling bureaucrats. You can’t blame them – it’s what any rational person would do in the situation.
Likewise, many corporate failures can be traced back to an organisation that had the wrong incentives in place. It’s the best employees that take the voluntary redundancies – the stragglers remain behind.
But there is a bright side to incentivising cultures, too. If you encourage the right things, you create effective work patterns.
If you promote people for taking on tasks above and beyond the minimum their job requires, any rational person would ask for any additional work or suggest ideas on how they can do more.
Workplaces where whole teams get rewarded for good performance incentivise staff working together. In contrast, other workplaces encourage individual initiative and competition – at the cost of teamwork.
If you pay bonuses for your sales teams securing that initial decision to buy, that’s what they’ll try to do. But if their scorecards instead look at how many of those customers remain loyal six months later, any rational person will work to build long-term relationships with customers.
So, how would a rational person behave in your workplace? What behaviour do you encourage amongst your staff?
Just remember: You only get the behaviour you reward!
Get it done – when you incentivise it!