Is Your Rewards Program Incentivizing the Wrong Behavior?

Photo Credit Ylanite Koppens

Is Your Rewards Program Incentivizing the Wrong Behavior?

Most organizations utilize some form of reward system because they know it can be an effective way to change behavior. It can be a fun and powerful way to jumpstart a new initiative or revitalize a tired campaign. However, there is a catch to utilizing reward systems to improve performance: If we are not careful, what we incentivize can easily drive the wrong behavior.

More Calls = More Results? Maybe Not...

Recently, my friend Teesha was promoted to manage a local call center tasked with gathering and updating client records for her firm. Facing a looming deadline, her superiors tasked her with improving the number of completed client records her team submitted every month. Teesha's previous experience was in outbound sales and she believed that the more calls her team made, the higher likelihood of completing the required documents. Therefore, she set up a reward system that gave the team bonuses for reaching a certain number of calls a month.

However, over time she noticed that while the number of calls dramatically increased under this reward system, the number of completed client records barely saw any improvement.

What was going on here?

Point The Bat Like the Big Bambino

During the 1932 World Series, Babe Ruth, the famous MLB superstar of the age, reportedly pointed his bat at the stands to call the shot before hitting a home run that landed him in the history books. What would have happened if he had pointed the bat at the jeering crowd or the bases teeming with rival players instead? Leaders are charged with directing their people's attention to the right activities and behaviors in order to guarantee the success of the team.

There are many things that can distract your team away from your objectives - other deadlines, conflicting priorities, personal struggles... The list is endless. The point of reward systems should be to keep your team's sights on the goal and NOT to further distract them away from it. By focusing your reward system on your objective instead of the method, you can ensure everyone knows what he or she are shooting for.

Encouraging Different Methods

What is the commonality between 9+1 and 4+6? They both equal 10.

One reason we incentivize the wrong thing is that we lack the confidence that our people can achieve our goals without our micro-managing their methods.

There are plenty of successful reward systems that focus on a centerline methodology, but in order for this kind of system to work, you have to be sure the activity you are incentivizing is truly a predictor of success. This means thinking through contingencies and testing out different methodologies.

Why not involve your team in this process?

There are countless ways that you could get to the same goal, and if left to their own devices, you may discover that your team will find a more effective pathway than you ever could have imagined on your own. Reward systems will always have unintended consequences if you use them to micromanage your people's activities. Make sure that your incentives instead inspire your people to creatively achieve your objectives in their own way. Dr. Stephen Covey has some great insights on this in his talk, Green and Clean:

"You cannot hold people responsible for results if you supervise their methods."

Quality Over Quantity

Teesha's reward system was well intended but her focus on the team's methodology was distracting them away from achieving the main goal. Most of her team worked remote and tracking their calls made her feel confident that they were on board and engaged. However, in order to qualify for their bonuses, her team began to exhibit behaviors that focused on achieving the highest quantity of calls instead of the highest quality; they called through lists of disconnected numbers, planned their calls at times they knew the clients wouldn't pick up, and did anything else in their power to ensure that they could make as many calls as possible in a day. None of these activities would improve the number of completed client files submitted.

How could she have set up the reward system differently to be more focused on the end result and inspire innovation on her team? She could start by talking to them.

Reward systems are most effective when the people being tracked have a hand in their development and deployment. Work with your team, agree on incentives that drive the right behaviors in your situation, and task them with holding each other accountable. It is amazing what you can accomplish when you unleash the power of collective genius.

Let the games begin.