Yesterday’s post on pay for performance – and Dan Pink’s Ted Talk – generated some lively discussion in the comments section.
Based on some of the comments, and the discussion that followed, I think I may not have been as clear as I could have been in my post.
Paul Hebert of Incentive Intelligence wrote:
This is getting so much play on the interwebs I’m half expecting everyone to stop taking a paycheck and work for autonomy – oh, wait – that would be every consultant out there – except for the part of not getting paid.
Laurie Ruettimann of Punk Rock HR wrote:
Pay works for real people with real jobs. Do you think people would pick up road kill and clean houses for free? Do you think we’d have sewer workers and garbage men if we just offered praise and emotional incentives?
I’m not sure where people got the impression that I think pay doesn’t matter. But just to be clear – it does. It’s why almost everyone gets up and goes to work every day.
I think its incredibly important to pay people fairly for the work they do. If you’re a rockstar, you should be paid like a rockstar. If you suck, pay should reflect that, too. In that sense, pay for performance clearly makes sense.
My take-home from the talk, though, may be best summed up by Eva Rykr from iOrgPsych:
Here is my impression on the issue. Pay for performance works for the basics. You pay me; I do job. After a certain level of compensation, higher pay loses its magic. THAT’s where all this motivation stuff comes in.
Money obviously matters. But when you’re thinking about how to motivate people to do amazing things that drive your business results, research shows that there are many motivators other than the carrot and stick stuff. And those intrinsic motivators may be more powerful forms of management than the instrumental stuff.
That’s what I took away from Dan Pink’s talk. And that was the main point of my article yesterday.
I think pay for performance works for particular jobs such as realtors, insurance agents, etc. where their monthly pay depends on how hard they decide to work. When you work in a large corporation it’s difficult to directly measure your performance. But, if an employee works like a rockstar their pay will reflect it by earning promotions and compensation increases and if you do suck you won’t be receiving promotions and only very minimal compensation increases.
@ReviewSNAP – Effort does not always equal outcome. Working harder doesn’t necessarily mean you’ll achieve better results, and I think some of the stuff Dan spoke about in his talk reflect that being effective and working hard are not always the same (or related).
Additionally, does motivating a realtor with money really incent the right behaviors? If you’re paying them based on the number of houses they sell, they may engage in some shady behavior and hard-sell tactics to close on homes. Let’s say you’re trying to compete on customer service. Those behaviors wouldn’t be things you’d want to motivate. But an instrumental, money-only approach could cause these unwanted outcomes.
I think this is why getting people excited about their work on an intrinsic level is so critical. Zappos does a great job of it, and they just sell shoes on the internet. No reason why other organizations can’t do the same.