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New Employees Should NOT Participate in Incentive Programs

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Beerbottle Should your new hires – regardless of “rank” or position – participate in tactical incentive programs?

What I mean by tactical programs I’m thinking sales incentives that last less than one year or quarterly performance programs that measure specific outputs or behaviors.

I’m saying no and this is why…

Long Pants Discussion

Last week I did a post on employees earning their “long pants”, a riff on the olden times practice of boys wearing knickers until they reached a certain age and then they were “allowed” to wear long pants and signal to the world they were grown up.  I suggested that there should be some mechanism in a company that allows employees to know which of their fellow employees were grownups in the organization and could be, and should be, seen as mentors, managers and guides.  In other words, who is wearing long pants.

The idea that you earn your long pants then made me think about incentive programs as a “privilege” of being a grownup.

Incentives Work Too Well

We’ve all heard the news and seen the posts and read the books (yeah – I’m talking about Dan Pink) that say incentives are bad for business because they are too effective and they many times drive bad behavior in pursuit of awards.  I don’t disagree with that.  Many poorly designed incentives drive too much of one behavior to the exclusion of other behaviors causing problems and unintended consequences.  

Because incentives work so well they need to be balanced by other behaviors and influences.  

In other words, getting a bonus for hitting a goal should be balanced by the basic rules of the company, the DNA of the company, the operating system for that company– the CULTURE for that company.

Culture determines the “line that shouldn’t be crossed” in a company.  When you have a culture that rewards no-holds-barred selling (think Glengarry Glen Ross – NSFW) then you have a very rough-and-tumble sales environment where almost any behavior is acceptable as long as you get the sale.  Not for everyone.  Probably not for anyone.  

But…

Culture Provides Checks and Balances

The culture of the organization provides employees with the baseline behavior code that cannot be violated (or shouldn’t be) and therefore keeps the unintended consequences of incentive programs in check (assuming the program is designed well.)  The cultural norms of the organization are the boundaries for behavior.  Until those boundaries are known it would be unwise to ask that employee to participate in an incentive program that could potentially lead them astray.  Until they’ve earned their long pants they don’t have the requisite “cultural indoctrination” that would serve to reign in poor behavior.

It’s Why The Drinking Age Isn’t 11

I liken this to the fact that we don’t allow children to drink.  We allow adults to drink (and thereby making them children again – but that’s a different story) but only after they’ve spent a few years (18/21 depending) learning the responsibilities of life, consequences of decisions and the affects of alcohol.  

We don’t allow children to do a lot of things – vote, drive, etc. until they’ve reached a certain age – which is simply a proxy for learning the social norms and the boundaries of behavior in our society.

Should we put in place similar criteria for participating in incentives?  

The more I think about this – the more I’m liking it.  

Thoughts, ideas, comments?  Should employees have to be grownups in your organization before they get access to grownup incentives?

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Originally posted on on Incentive Intelligence

  • http://profile.typepad.com/6p0115709967a0970b Fran Melmed

    interesting. ok, so that makes a lot of sense that until someone understands and lives the culture, they can’t be influenced (restrained?) by it. what would be the possible negative outcomes for some new, hotshot salesperson who’s used to greater rewards?
    f

  • http://profile.typepad.com/2of6 Paul Hebert

    Great question Fran – thank you. I am talking about non-compensation-based incentives.
    Obviously, any new “sales person” would have a comp package that includes some sort of commission or bonus – that’s their pay package.
    I’m addressing the other non-cash or non-compensation-based incentives – travel awards, points, other rewards.
    If you hire a hot-shot sales person and they think they should automatically get a shot at those types of programs I think you may have hired the wrong person – one who believes numbers are the only measure of their worth.
    To me it makes sense that even a new sales person who is #1 in sales should have to wait before they earn top recognition or rewards – that would be their “probationary” period to see if they fit in the culture. I’ve seen my share of “top guns” come into an organization – sell the crap out of it and end up being a total jerk and pain in the a** to the support staff. Is that someone you’d want in your top recognition program? Not me. I’d rather wait and see how they perform on some of those “people” measures before I hold them up as an exemplar in the company.
    That’s my story and I’m sticking to it.

  • Peter Zuev

    Dear Paul, still I’m not sure that I agree that any incentive program should be applied differently to older employees and new hires. First of all, I think incentive encouragement by definition should be depended only on performance, and performance alone. Applied depending on time with the company it can result in the serious antagonism between “old hands” and “new hires”. I think an organization should either have incentive program or not, but apply its policy to everyone equally. The longer service with the company can be rewarded otherwise, with higher hourly wages or higher salaries for example. And, secondly, incentive program (or its absence) carries in itself such a powerful message on what the company expects from its employees and what kind of behavior is encouraged, that any employee would react to it in pretty much the same way, no matter how many previous years with the company he or she has.

  • http://profile.typepad.com/2of6 Paul Hebert

    Thanks for commenting Peter – appreciate it.
    First – let me be real clear lest there be some EEOC charge waved at me – I’m not saying “older” vs. “younger” employees. I think you know that I just want to be real clear – I’m talking any age – only the time with the company as a differentiator (whew… don’t what a law suite ya know.)
    Obviously, my point of view isn’t backed with any data that says this is right thing to do but I do think it has some merit.
    You say -
    “..incentive program (or its absence) carries in itself such a powerful message on what the company expects from its employees and what kind of behavior is encouraged, that any employee would react to it in pretty much the same way, no matter how many previous years with the company he or she has.”
    That alone is why I thought of this in the first place. Incentives can make you do things – and without a real understanding of the company culture a new person might do things to earn an incentive that violates company norms. I don’t think zappos would want someone with an Enron style working there. But the only way to help ensure that those behaviors don’t occur is go through an education process before putting a new hire in a position where they could – through an incentive – do something very wrong.
    I don’t think that this would result in “serious antagonism” between ‘old hands’ and ‘new hires’” because it would be the culture of the company. The new hires would know it – and the old hands would have already been through that phase of their time with the company.
    I think delaying access to non-compensation based incentives signals that we don’t think performance is the ONLY measure of success within the company. Having the waiting period says that “performance within our way of doing this is what we expect.”
    Again, this is opinion only – but the more I’m writing and thinking about it – the more I think it has merit.

  • http://www.wphebert.com Paul Hebert

    nice way to get your link in a comment – but what do you think of delaying participation?  I know how to design them – I’m asking if there should be a waiting period to ensure you’ve earned your long pants?