Turtles Confirm that Incentive Pay Works!

The discussion regarding the efficacy of incentive compensation is ongoing. So many questions, seemingly so many answers! Does it focus people on things that you find important? Does it trump autonomy, mastery and purpose? Does it make a difference even when it isn’t the main component of pay? Will people jump through a few hoops if there is a reasonable prize at the end?

A group of turtles answered yes to all of these questions.

We tend to think of incentives as based on job descriptions and tasks people normally perform. In this case an incentive was created to get people to perform a task that was nowhere near their job description and something that no one normally does. Instead of the incentive being pushed on recipients it was only available via request. Less than half who went through the request process were even accepted to the incentive program.

Stop and think about that for a minute. Imagine if your employees had to request to participate in your incentive plan. Now imagine if you turned down more than 50% of their requests!

Back to the turtles…

The program was designed to motivate ranchers in an area with a threatened turtle species to change their processes and facilities to be more conducive to helping the turtle population grow.

You had to apply for the incentive and prove you were worthy. You had to show that your area was compatible with and inhabited by the turtles. You had to ensure the products you used to fertilize, feed and treat your area were not poisonous to the turtles. You had to change dates for critical tasks like calving to ensure they would not interfere with the turtles. You had to have an area big enough to make it worth the time, effort and money of the individual offering the incentive. And you had to build turtle ramps that allowed the amphibians easy access to raised water tanks. All of this for an incentive that was capped at a small percentage of the income produced by the rancher.

And here’s the great thing. It worked. People made the effort to apply. They followed the rules and they got paid. Turtles were born and were able to grow. And people were generally a combination of bemused and happy with the program.

If incentives can motivate ranchers to make real changes to make the lives of turtles easier then your employees can be motivated to make real changes to make their careers and your company better. Or, at least that’s what the turtles told me.

Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture. Do you want to know more about, Performance-Based Equity Compensation? Dan also cowrote “Everything You Do in COMPENSATION IS COMMUNICATION”, with Comp Café writers, Ann Bares and Margaret O’Hanlon. And believe it or not, he has co-authored “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives.” Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

Comments

[E. James (Jim) Brennan]

Nice illustration, Dan. People do whatever brings them the rewards they desire. Money, status, companionship, recognition, self-respect ... almost anything can be an incentive to someone. The big challenge is finding "that one thing" that means most to your target audience. All the rest is process.

[Karen Kervick]

Do you think anyone's motivation was to have more turtles?

A ranch with turtles is not something I would normally put together when thinking about the ranch's ecosystem.

Do incentives work better when employees have the same goal as the desired outcome?

OR can that "one thing" really entice people to do something they normally would not want to do?

Goal: Improve employee health to reduce insurance costs.
If you pay for my gym membership, it may incentivize me to sign up, but I won't actually go to the gym unless I want to improve my fitness or lose weight which would in turn make me healthier and perhaps achieve the company goal of reducing insurance costs.
How do you make me want to get healthy? Increase rates of insurance for smokers or overweight for their size?

Encourage health in all aspects of your employee rewards including the company culture. Then perhaps the incentives will reinforce the desired behaviors.

Since there isn't one thing that appeals to everyone, knowing the culture you want first, communicating that to employees to gain general acceptance and mutual desire, then institute the supporting incentives.

[Dan Walter]

Hi Karen,

Great questions.

I don't think moist ranchers care about more or less turtles. They are unlikely to overrun anything and unlikely to be enough help to make them truly desirable.

But, the incentive was enough top get them to do something they had little other interest in even caring about.

Gym memberships are an interesting thing. Instead of trying to get lots of people to go to the gym, imagine if you just tried to to get the "almost ready" people to the gym. If the incentive was both big enough and scarce enough it may just work. But, it is unlikely you could make it big enough or scarce enough to me to go to the gym. There's just not enough money.

We try and make it clear that the gym is for our employees health, but most people feel that it is just another cost cutting ploy for companies. Since we are terrible at linking cost cutting to better pay or work conditions, most employees have no interest in it. Who cares if the company reduces insurance costs if all the savings go to shareholders or executives.

I know of companies where they money saved is clearly and demonstrably delivered back to employees and it seems to work.

And it is true that there isn;t one thing that appeals to all (although great communication can assist with this.). But, companies can find a couple of things that appeal to a lot of people, rather than a million things that each appeal to one..

Communication is perhaps the most important driver of any culture.

[E. James (Jim) Brennan]

One thing that drives a lot of human behavior is positive peer relationships. Good relationships with co-workers are usually prized. Why not use the interest in affiliation to increase gym participation? Make it a team activity and benefit from the group pressure to enhance attendance.

People will do uncomfortable things to please others. The desire to maintain team spirit is generally pretty strong. Believe the research confirms that group pressure is extremely effective in changing behavior like avoiding exercise.

[Karen Kervick]

Interesting thought Jim. We do offer group wellness activities that allow for posting your steps via Fitbit or an activity in a competitive forum - either individual or team focused. I am going to ask if we have any stats on how many people get the gym reimbursement vs participate in those programs. My guess it is pretty much the same people... those who are actually interested in fitness.

Applying this to compensation, do you think team rewards are more effective than individual in driving performance?

[E. James (Jim) Brennan]

Since Dan held back, I'll take a stab, Karen. The Usual Answer, "It Depends" (ID) applies, I fear, Definitely so in certain cultures and specific work group environments, but not always.

Overall, I would guess YES, because all the individual motivational effects still exist in team rewards where the greater transparency adds and intensifies extra levels of reinforcement impossible from "secret" rewards. Team interactions magnify and multiply the reinforcements when positive group dynamics exist.