Performance Bonus Paradox
Posted by Bob Broad on Sunday, October 17th, 2010 at 10:06am.
When we selected Melissa Young to be our Buyer Specialist earlier this year, we created an incentive bonus for her. If she reaches goals we set at the beginning of the year, she’ll get a bonus check at the end of the year. This compensation plan is hardly unique. When we set it up, we didn’t really question if it was the right thing to do. We know that bonuses work. Right?
Daniel Pink is getting me to rethink this assumption. More importantly, he’s helping me re-think some of the things I do as a parent. In his book Drive The Surprising Truth About What Motivates Us, Pink presents a compelling argument that our compensation plans and our parenting conventions have not yet caught up with the requirements of a modern workplace that values creative problem solving, autonomy, mastery, and purpose.
Contingent rewards like the one we offered Melissa can act like a jolt of caffeine. A caffeine-like boost is not what I was after. I selected her because I knew that she was self- motivated and committed to self-mastery. During the interviewing process she challenged us in ways that I knew would make us better.
Pink shares with us many experiments that clearly demonstrate the negative consequences of “if you do this, then you get….” In one experiment, kids who love to draw don’t do it less after they’ve been paid for their drawings. The candle problem experiment demonstrates how a contingent reward for a heuristic task is counter-productive. Google is one of a few leading companies that Pink profiles that have an updated framework for how to design work and compensation for the modern employee.
I believe Drive is a worth read, and would make for great conversation in your book club. Interested, but not enough to read the book, you can get an abridged version by checking out Pink’s presentation on TED.