2008 – Rewarding a job done well
A few weeks ago during a conference on employee benefits
in Spain, the delegates were asked to vote on various propositions
from the platform. To help us in our voting decisions we
were all handed little calculator-like voting gadgets as
we entered the room.
While I don’t remember the questions on which we
voted, I do remember having difficulty understanding some
of them. This might explain why my voting record at such
events could be described as “apathetic” at
best as I exercise the audience member’s right to
Here, however, I could hide my ignorance behind the anonymity
of the secret vote. Even better, I could register my choice
– controversial or not - just as I do in a General
Election, without having to explain to anyone my voting
behaviour or the reasons behind it.
Imagine using such devices in the board room when faced
with the kind of headstrong boss whose idea of consensus
is to bulldoze policies through meetings, using a combination
of fear and intimidation.
The boss probably wouldn’t allow it. But when management
consultants introduce such methods it is regarded as a legitimate
deployment of technology from their box of tricks. Mary
Meaney, a partner specialising in performance transformation
at the London offices of McKinsey & Co opted to use
audience response technology among senior executives at
a company she was advising during a change programme.
Asked whether the company had a clear and consistent strategy
for the business, the answer was a unanimous “yes.”
However, when asked, using the confidential voting technology
to agree or disagree with various different descriptions
of the strategy, the executives were divided with an even
distribution over six different responses.
“The CEO exploded,” says Ms Meaney, ”but
it brought out in to the open what had previously been hidden
under the surface: no-one had any clear idea of what the
strategy was. The next step was to sit down with the senior
team and create a new strategy.”
One issue identified in the McKinsey work was the need
for idea and process ownership. People like to put their
own stamp on their work. If we’re expected to follow
a process or strategy, at the very least we want to believe
we can influence the way that it works.
Ms Meaney quotes research by Ellen Langer, a Harvard University-based
psychology professor who carried out a study using lottery
tickets among two groups of people. One group received tickets
chosen at random whereas those in the second group were
able to choose their own ticket. When asked to sell their
tickets, the people who chose their tickets wanted up to
five times more for the ticket than those with a randomly
“It was their number and that made all the difference,”
says Ms Meaney who argues that organisations need to understand
the sometimes complex motivations behind such behaviours.
Too often employers misunderstand the nature of motivation.
Nowhere is this more apparent than in pay structures. Pay
is important. We know that instinctively. I am always sceptical
of survey findings that downplay the significance of pay.
It’s tempting to assume, when reward is listed behind
factors such as “job content” and “working
environment,” that it doesn’t matter so much.
Indeed most of us probably like to think that it’s
not important. It’s not very seemly to confess that
we might be motivated by greed. But our relationship with
pay has less to do with greed and far more to do with perceptions
In a new book, Sway, the Irresistible Pull of Irrational
Behaviour, that I referenced in last week’s column,
authors Ori and Rom Brafman point to research that links
the lure of money to a different part of our brains than
that stimulated by altruistic behaviour.
The chance of a big payout, whether it’s an end of
year bonus or a big win on the casino tables in Las Vegas,
stimulates a primitive part of the brain called the nucleus
accumbens, sometimes described as the pleasure centre since
it’s associated with the highs experienced from drugs,
sex and gambling. Studies carried out by the National Institutes
of Health, the US medical research agency, observed the
way gaming rewards led to increased activity in this part
of the brain.
In later experiments looking at different reactions to
reward, scientists at Duke University in the US, asked their
subjects to play a video game where the reward for high
scores was a donation to charity rather than money for themselves.
In this study, while the pleasure centre remained passive,
strong activity was observed in the posterior superior temporal
sulcus, a part of the brain associated with social interactions,
human relations and perceptions.
This helps to explain the apparently contradictory outcomes
of a study at an Israeli university where two groups of
students were asked to undertake the GMAT exam used to access
business schools. One group was simply asked to do the test
whereas students in the second group were given a small
financial incentive – 2.5 cents for each right answer.
The unpaid students produced consistently better results.
The financial reward backfired and acted as a disincentive,
possibly because those receiving it decided they were being
offered a derisory amount.
The Brafmans liken the results to a situation where friends
may turn out as a favour to help you move house. If, on
the other hand, you offered to pay them £10 each for
the trouble, the likelihood is that they would feel insulted
- that their generous nature was being somewhat exploited.
This is one reason why many companies have adopted gift-giving
and vouchers as a way of rewarding employees for exceptional
performance. Stephen Humphreys, managing director and Steve
Baker, new business director at Projectlink Motivation,
a company that specialises in non-financial rewards, argued
at the Jerez-based Employee Benefits Summit 2008, that cash
reward is not visible enough to reinforce recognition.
Instead they advocate the use of speedy recognition. Surprisingly
many employees do not want the Earth when they are rewarded
with redemption vouchers. When exchanging vouchers choices
vary between nationalities. The most popular redemption
item in Spain, they said, is a cured ham. In France it is
fine wine while in the UK it is a paper shredding machine.
What does that say about the British?
Bigger ticket items range from having a stand-in part,
drinking in the Rovers Return in Coronation Street, to flying
across Russia in a Mig fighter jet. In some respects this
kind of recognition has less to with a fair day’s
pay and more to do with the old TV series, Jim’ll
But underpinning much of this work, whether in reward,
or in organisational transformation, are perceptions of
natural justice and fairness, what Mary Meaney calls the
“human component” that is often mistakenly described
as the soft side of management. There is nothing soft about
See also: Pay