6 Leadership Fails That Make Incentive Plans More “Incite-ful” Than “Insightful”


Struggling to figure out how to increase customer satisfaction? Tired of the lackluster employee performance that can come with simply paying employees to show up and breathe? There might be some benefit in creating a formal incentive plan for employees in hopes of producing more and better products or customer service.

An incentive is the reward given to an employee in exchange for a behavior or performance of a task. “If you do ‘x’, then you’ll get ‘y’.” However, with the complexities of employee incentive plans, proceed thoughtfully and with care. Without thoughtful advanced planning and insight into the correct way to align the incentives with business needs, you will most assuredly end up “inciting” employees to exhibit unproductive behaviors. In that case, your company ends up with unwelcomed and unintended consequences.
Here are 6 leadership failures that could cause incentive plan to be more “incite-ful” than “insightful”:

1. You failed to align the incentives with business needs.

With poor alignment, there is little or no
correlation with your business processes, products or services, or customers’ needs. To avoid misalignment, think about what you are trying to achieve by using an incentive, including what you want to achieve with your customers.

2. You forgot about fairness.

An unfair incentive fails to account for the amount and extent of control participating employees have over the end result, whether they work individually or with a team. This means employees don’t have a good opportunity to affect the desired result. To create a fair incentive, the design must account for the employee’s abilities to have an impact on the desired outcome and to control what they do to affect the outcome.

3. You weren’t transparent about how it works.

Employees don’t have a clear understanding of what’s important to do for the sale and for the business need. Spelling out the reasons and working of the incentive program to employees is key.

4. You don’t understand the “M.O.” of the participating employees.

Incentives work best with functions that are very production-based versus with those functions that require more creativity and discernment. Additionally, the incentives used should be correlated to the intrinsic motivation(s) of the type of employee who typically works in those positions.

5. You’re missing out on other types of rewards you could use, such as recognition.

An incentive program isn’t just about the “if-then” rewards available. Its effectiveness can be greatly enhanced by using acknowledgement, recognition, and even bonuses.

6. You fail to pilot the program and to monitor it throughout implementation.

Before rolling out the plan, it helps to have participating employees weigh in on just what the proposed incentive will encourage them to do – good and bad. Then during implementation, watch for unintended behaviors and results, so you can tweak as needed as soon as an unintended result is noted.

People are not machines. Before implementing an incentive plan, call on experts to assist in the design and carefully consider what outcome you are really trying to accomplish.


You can, as long as you include this information with it: Beth Strathman works with women in leadership who want to have more positive impact within their organizations by gaining greater focus, self-awareness, and influence with their teams. Learn more at: leadlikenobodysbusiness.com.


russell-lookadooThis blog post was inspired by a conversation with Russell Lookadoo of HRchitecture. Russell Lookadoo is the HR Guy for small businesses. His firm, HRchitecture, specializes in helping business leaders accomplish their goals by effectively using their teams. Russell brings three decades of experience designing Human Resources solutions that achieve business strategies in varied organizations ranging from a small manufacturer to the nation’s second largest bank.

Since 2005, Russell has enjoyed focusing on small businesses and has honed his skills in family business matters, partnership disputes and other challenges unique to small privately-owned companies.

He is the only consultant in the area to combine his broad corporate Human Resources background with a decade of practical business advising with small businesses. This unique combination allows Russell to work closely with business owners and key leaders to find solutions to their business challenges and align the personal vision of the owner with that of the companies.

Russell holds the Senior Professional in Human Resources designation from the Society of Human Resources Management and earned the Certified Compensation Professional designation from World at Work. Russell attended the University of North Carolina on the prestigious Morehead-Cain Scholarship and graduated with a Bachelor’s in Industrial Relations. Visit his website at http://www.theHRGuy.biz.

The Insider’s Guide to Employee Motivation

employee motivation

Often, it can feel as though you are only one who cares and is willing to do the “heavy lifting” in your company. So, how do you get your employees to care enough to work hard like you and treat customers with care like you do?

Well the research has been around for decades, actually almost 100 years, but for some reason you might be fighting it. What seems to be the case is that your employees are already motivated to get out of bed each morning and do something they love. That’s called “intrinsic” motivation. You know, but might not want to admit, that you don’t motivate anyone but yourself, so stop trying to “make” your employees do things. (Want to see your employees go passive aggressive really fast? Try to put your thumb on them to control them. They’ll subvert you every time – and with smiles on their faces pretending to conform to your wishes.)

“Leadership is the art of getting someone to do something you want done because he wants to do it.” — Dwight Eisenhower

Alfie Kohn in his book Punished by Rewards, reviewed decades of research that showed that Skinnerian behaviorism might work well on dogs and birds, but really doesn’t work on people. He boiled down what gets employees revved up to: Content (say over what they do), Control (say over how they do it), and Collaboration (be able to work with others to get it done). Daniel Pink did a similar review of the research in his book Drive, summing up the salient factors as Autonomy (self-direction), Mastery (develop and hone talent), and Purpose (have a really impactful reason for why they do the work).

In the late 1960s, an actual researcher, Frederick Herzberg concluded there were two factors required to keep people happy and productive, companies needed to (1) get rid of “dissatisfiers”, like bad policies, bad supervisors and unfair pay that caused employees to gripe about work, then (2) build in “satisfiers”, like meaningful work that gave employees a sense of responsibility and provided job opportunities appreciation, recognition and continued skill development.

So what can you do to unleash your employees’ natural intrinsic motivation?

First, set your ego aside.

Have you examined your abilities as a leader? Are you someone who others want to follow or work for? Or maybe your ego comes into play when you hire or promote people and they don’t work out. Are you willing to admit your mistake and let them go or move them back to a position that fits their skills and temperament?

Same goes for making sure that the company culture you created is not squelching your employees’ natural inclination to do something great. Make sure you don’t have restrictive or nonsensical policies, procedures, or pay structures that may be administered inconsistent or unfairly.

Second, focus on building relationships.

To build relationships with your direct reports. You should do things like:

  • Take stock their talents, current performance level, and long-term potential. This helps to determine what trajectory each employee is on — promotion, move to another position, redeploy, monitor more closely, etc.
  • Treat your people like people, not cogs or machines. Get to know them personally to a certain degree.
  • Appreciate their talents and the roles they might play in your company: devil’s advocate, trickster, historian, herald of danger ahead.
  • Set and communicate clear expectations for each direct report, tied to company goals
  • Acknowledge contributions made and note where they need to contribute more, better, or more often.Determine frequency and type of feedback they to hear from you.
  • Acknowledge their good work and willingness to go the extra mile when it happens. A simple thank you is good enough usually.
  • Reward them for their performance and commitment.
  • Develop their skills and competence.

As Zig Ziglar said, “You don’t build a business – you build people then the people build the business.” Spend time building your people, and their motivation will shine through.


WANT TO USE THIS ARTICLE IN YOUR NEWSLETTER, BLOG OR WEBSITE? You can, as long as you include this information with it: Beth Strathman works with women in leadership who want to have more positive impact within their organizations by gaining greater focus, self-awareness, and influence with their teams. Learn more at: firebrandconsultingllc.com.

thanks employee appreciation

Employee Recognition for the “No Nonsense” Boss

You know who you are.  You grew up in a family where no news was good news. When your parents had a conversation with you, it meant you had screwed up.  You’re focused on work, not that you don’t like people. You do. You just like them better when they are working. While you make pleasant conversation with others from time to time, it drives you nuts or at least makes you a bit antsy, and you feel it’s a waste of your time if the chit chat goes beyond 5 minutes.

Now, you lead others. Maybe you have your own company, you’re a CEO of a large company, or you’re in charge of a department or a small work crew. Doesn’t matter. You’re now faced with getting the most out of others, and the concept of employee recognition or appreciation comes up. The idea alone makes you crazy. Employee appreciation. After all, employees are getting paid to do their jobs.  You think, “Why should you have to gush all over them? Geez. Grow up, employees. This is the adult world. Not everyone gets a trophy for showing up to work.”

Granted, it would be a lot easier if everyone could simply show up, hit their marks, and know in their heart of hearts that they did a good job without you needing to say it.  But that’s not the way the world works.  Employees’ need to belong and to feel good about themselves and that means they need you to recognize their efforts from time to time.

Yes, some recognition programs miss the mark.  They put too much emphasis on the token given to the employee (a watch, a trophy, a bonus, etc.) than on the meaning and sentiment behind the token.  (How many of you have commemorative service pins that you don’t want and don’t know what to do with?)  If a program stresses form (getting something) over function (appreciation), then the recognition program is the problem and needs to be revamped or dismantled altogether.

Here’s what we know about employee appreciation:

1.  Performance is higher in groups where the leader shows more encouragement.
In fact, a survey way back from 1995 showed that 95% of those survey agreed with the statement, “I get a lot of satisfaction knowing I’ve done a good job.”
This indicates that to get the best performance out of employees, employees want and need to hear that you recognize their efforts and to know that you were pleased with their work.  It doesn’t mean you have to throw a party or buy them expensive presents each time they do something right.  It simply means you need to acknowledge the efforts.  How about a simple thank you?
2.  Teams with managers who were encouraging and offered praise performed 31% better than teams that did not.
Again, recognizing efforts and telling employees that they are doing well and that you appreciate their efforts is all that is needed.The research doesn’t say you need to spend a ton of money making a big deal out of every success or breakthrough. Greenberg, M. H., & Arakawa, D. (2006)
3.  Deliberate and specific recognition/praise is more motivating than money.

When you show your appreciation, be deliberate in recognizing employees and be specific about what it was they did so well and why it mattered to the company.Don’t say only, “Thank you.”  Instead say, “Thanks for the long hours and hard work you put into the ABC project.Because of your efforts, we landed the account.” Deci, E. L. (1996)

So, as much as it may irk you to recognize when employees get it right, it can pay off big for them individually. Consequently, sincerely giving a specific “thank you” will pay off big for your company, department, or team.  It’s not the fancy recognition program you design or the stuff you give people; it’s the sincerely and specific recognition and appreciation you show for their efforts.
Updated 1/21/2020