Tuesday, March 29, 2011

Incentives Matter... But So Does Eudaimonia

This video is based on the work of Daniel Pink. In contrast to what Pink recommends in this video, most companies remain locked in a hierarchical factory model complete with the micromanagers and people positioned as static cogs. Budgets and decision rights remain at the top. Task lists and drudgery remain at the subordinate layers. Middle management is asked to execute what may be a poorly conceived strategy -- so they get both abuse from above and low morale from below.

The focus in these hierarchical organizations lies mostly in faithful executing of plans -- like the Soviets had. Then, management evaluates inputs rather than results. Performance evaluations reflect this backward methodology. Productivity suffers.

Seniority remains a poor proxy of experience in these firms and compensation is often tied to it in a kind of corporate socialism that can creates incentives to remain comfortable and quiet. For these orgs, not much has changed since the 1960s, even though they have the Web. They can often trundle along, but the high-performance organizations of the future -- their competitors -- are going to change their internal rules so they look more like networks than hierarchies.

In my experience at managing people and motivating, I believe financial incentives matter more than given credit in this video in both a positive and negative way.

Purpose-driven work allows the workers to feel they are part of a bigger whole doing good for their institution and making the world a better place. Giving people more autonomy over their requires a considerable degree of trust. You have to give employees decision rights -- which means giving them more control over resources and greater acknowledgment for results arrived at through means other than corporate plans or issued directives.

HT: Ideas Matter

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