​The Biggest Mistake with Incentivising Employees

Leadership is all about influence. Maybe you’re leading people and need to influence them to do a good job. Maybe you’re a project manager who influences people to contribute to a project. As leaders, we deliberate, “How will I motivate people to do what I need them to do?”

I’m often asked, “Is a bonus programme a good idea? How should I incentivise our employees?”  I always like to start this discussion by reflecting on a personal experience.

Ten years ago, I was managing a worldwide customer satisfaction survey. The purpose of the survey was to talk to our customers after a service experience. It was a typical survey.

In fact, the questions only required a simple “check-the-box” answer where they could rate their service experience— except one. We concluded the survey with one open-ended question: “What’s the one thing we could do to improve your service experience?”

Everything looked fine as I was tracking the results until I saw a horribly disturbing trend.

Customers were responding some pretty alarming comments.

“The one thing I need you to do is give me some service. Why haven’t you called me?”

“My service case was closed inappropriately. What’s going on at HQ?”

I was quite disturbed. Why weren’t they receiving service anymore?

I called my friends on the engineering floor and found out about a new incentive— a bonus programme.  In this model, engineers who performed service calls only got a bonus if they closed all service cases within 30 days.

What do you think was happening? It turns out, they were closing their cases— even the ones that weren’t ready to be closed! When it was time for bonuses, they would look at their open roster and close the cases that were too complex or required more research and analysis. The customer received a closure notification and the engineer got their bonus.

So, was the bonus programme working?

It was actually working very effectively! It was driving behaviour we had never seen before! The problem was that it promoted the wrong behaviour.

Incentive programmes must be tied to vital behaviour. The result we wanted was improved customer satisfaction, by closing cases prematurely, we were actually improving customer dissatisfaction. Because our bonus programme was so effective, now we had to deal with a new issue.

Anytime we use the power of reward to influence others, we need to make sure we’re encouraging the right behaviours and discouraging the wrong ones.

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