| (From Issues for Growth Vol. 19, No. 3)
Four Words That Are at the Heart of Human Behavior
No…this is not a political statement. But, whether it’s the economy, motivating employees, moving people to action, selling a product or service, starting a business, or orchestrating change, there are four words that are at the heart of human behavior: PEOPLE RESPOND TO INCENTIVES While I could wax poetically and astutely with examples of the ways this applies to life, business, and people, I thought I would just throw this out there and get your reactions. |
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Wednesday, March 31, 2010
Four words that are at the heart of human behavior
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Hi Dave,
ReplyDeleteI just finished putting together a Workshop on Technology Services Pricing, and an important part of it is incentives to encourage responsible pricing behavior. In may experience when incentives are aligned, then price management is easily 70% simpler and deals close more quickly and at higher prices. When incentives are not aligned, it is one fire drill to the next as sales tries to outfox pricing policies, every competitor has lower prices, and every deal includes price negotiation.
Cheers,
Tim Matanovich
tim@valueandpricing.com
I wholeheartedly agree with the four words. However, if the implication is that carrot and stick incentive structures are the best way to get results, I couldn't disagree more. There are numerous studies which support the notion that rewards undermine intrinsic interest in a task, and I just finished reading some research about how incentive structures undermine creativity efforts in companies. So it's an area to tread carefully.
ReplyDeleteI support Dan's comment that incentives can sometimes undermine other important factors. Incentives, alone, can create a cutthroat environment. While it's true that people respond to incentives, you would want them to respond to them in the context of your cultural values.
ReplyDeleteIt's interesting that when the word"incentives" is used that people immediately think of compensation. Incentives can come in all sizes and shapes. It can be recognition by peers, a personal sense of accomplishment, it can be being assigned more interesting projects, being part of something important or valuable or beautiful, etc.
ReplyDeleteI would submit that problems are not with incentives, but with the poor design or alignment of incentives...so there are unintended consequences.