7 common mistakes companies make when trying to motivate their employees - and how to fix them

1. How Companies Get Motivation WRONG! Kurt Nelson

2. Many companies get motivation right…

3. Many companies get motivation right… Yeah for them!

4. But many companies get motivation wrong

5. And some get it spectacularly wrong!

6. And some get it spectacularly wrong! Ouch!

7. And that’s not good

8. And that’s not good Decreased Motivation Leads to: Lower productivity Higher turnover Decreased sales Lack of creativity

9. In our work with companies across the country, we have had the opportunity to examine why this happens…

10. In our work with companies across the country, we have had the opportunity to examine why this happens… And understanding is the first step in getting it RIGHT

11. Here is a short list that describes just a few of the more common mistakes that we’ve seen Focus only on money No manager discretion No manager tools Too complex Wrong measure Communication Fixated on costs

12. 1. Focus too much on the drive to Acquire (i.e., the pay plan)

14. Work Environment

15. Work/Life Balance

16. Growth Opportunities

17. New Challenges

18. Commitment to Ideals

19. Corporate Identity

21. 2. Don’t give front line managers enough discretion Front line managers typically have the greatest impact on individual employees perception about the company. Limiting how they can motivate or not trusting them to do it right decreases their motivational effectiveness.

22. 3. Don’t give front line managers enough tools

24. Discretionary Reward Programs

25. Easy to Use Reports

26. Motivational Support from home office

28. 4. Making incentives too complex While companies might want to make their IC plans more complex to try to ensure fairness or meet certain budget expectations… The morecomplex and harder they are to understand, the less effective incentive plans are at driving behavior change.

29. 5. Rewarding the wrong things

30. 5. Rewarding the wrong things Too often, companies good intentions can lead to rewarding the wrong behavior. The most common mistakes: Rewarding things that are not in alignment with strategy Reward things because they are easy to measure Rewards have become entitlements and perceived as “unchangeable”

31. 6. Not communicating enough

33. Total Rewards Strategy

34. Reward Culture

35. Company Mission All of these are vital to a highly motivated workforce.

36. 7. Focusing on the “cost” of motivational programs – not the results

37. 7. Focusing on the “cost” of motivational programs – not the results Focusing on the “cost” of a program is short sighted. The real focus should be on the motivation that the program instills and the results or “lift” the program has on performance. Cheapest isn’t always the best!

38. Does any of this sound familiar?

39. The real question is…

40. The real question is… what to do about this?

41. First recognizing where we tend to go wrong is key

42. First recognizing where we tend to go wrong is key We just covered that…

43. Then we merge theory and expertise to develop solutions using…

44. Then we merge theory and expertise to develop solutions using… The 4-Drive ModelEmployee Motivation of Lawrence & Nohria 2002

45. Acquire Bond Challenge & Comprehend Defend The 4-Drives

46. Acquire Bond Challenge & Comprehend Defend We need to focus on ALL 4 Drives together (not just Acquire)

47. Then give front line managers the tools, the training and the discretion to use them effectively

49. Manager discretionary incentives (cash and non-cash)

50. Simple “On the Spot” Awards

51. Recognition programs – peer-to-peer, manager nominated, VP review

53. Create rules that are flexible enough to accommodate Managers special situations

54. Monitor only for bias and cheating

55. Utilize online platforms to manage programs and provide flexibility

57. Simplify, simplify, simplify Rework your incentive plans to simplify them: Reduce the number of items you’re paying on (3 or less is best) Focus only on key results that people have control over Simplify the math for calculating earnings/winning Limit the number of qualifiers, multipliers, kickers or other factors

58. Conduct an analysis on what behaviors your reward programs are driving

59. Conduct an analysis on what behaviors your reward programs are driving Conduct research to ensure that your programs are: Driving behavior that is in-line with company strategy (e.g., profit not just revenue) Measuring the appropriate results / behaviors and not just those that are easy to quantify Have not become so entrenched that they are perceived as entitlements and not incentives Leveraging (not duplicating) other incentives or pay plans in the behaviors they are rewarding

60. And make sure that this is ALL communicated with a PASSION!

61. And make sure that this is ALL communicated with a PASSION! Utilize live meetings, well done Power Point presentations, professional print and online communications, voice mails, flash e-mails, memo’s, manager talking points, posters, etc…

62. Finally – don’t let Purchasing focus you just on the direct cost of a program – make sure you look at how the program drives motivation and results.

63. Finally – don’t let Purchasing focus you just on the direct cost of a program – make sure you look at how the program drives motivation and results. A program that increases sales performance 1% at a $1Billion dollar company = $10 Million in additional sales

64. Finally – don’t let Purchasing focus you just on the direct cost of a program – make sure you look at how the program drives motivation and results. A program that increases sales performance 1% at a $1Billion dollar company = $10 Million in additional sales That might just be worth a few extra thousand!

65. Make sure that you don’t make a motivational…

66. Take Action Today!

67. To find out more on how to motivate your employees www.lanterngroup.com or our blog http://thelanterngroup.wordpress.com/ ©2009 The Lantern Group – use permitted with acknowledgement