Individual Blog Week 2

I feel that the bottom line of this week was financial incentives are not always the answer. We tend to think that people will respond to money. It is as if money is the answer to all problems, when in reality it is not. Financial incentives can create a motivational effect, informational effect, and selection effect if used correctly. These can be achieved by offering a pay-for-performance schemes, which motivates their employees to work harder in order to achieve higher financial rewards, providing people with information about the priorities and values of the company, letting the true mission shine through, then there is the selection effect which is the idea that motivated people who are motivated to work harder will chose a workplace that will give them more money for their efforts. This makes workplace feel like financial incentives are the way to go, however there are implications to this idea, which could backfire on a company. For instance, the motivation could cause more problems or costs to the company. For example, “Hard Facts Dangerous Half-Truths & Total Non-Sense” illustrates how garbage truck drivers were given the incentive that if they finished their eight hour shift early, they could go home, and be paid for a full days work. However, this led to many issues such as a decrease in the quality of their work, illegal practices as well as safety issues such as driving unfit trucks. The drivers were motivated to finish their job early, however the quality of work decreases greatly. There were cases in which garbage was not even picked up. These financial incentives can also attract the wrong kind of talent. For instance, would you rather have someone would work hard but could only be motivated by money? Or would you rather have an employee who is wired to work hard all the time, and be promoted to more senior positions, which in turn have a higher paycheck? This helps in proving Jame Treybigs theory “if they come for money, they will leave for money.” In management it is extremely important to look at the big picture to try to determine if a financial incentive will be helpful or hurtful. For instance in my experience at Nordstrom having a base pay plus commission  as well as cash for every credit card opened attracts individuals who are motivated, and confident, it made everyone more focused on customer service, and helps to let Nordstrom’s mission and desire to serve the customer shine through. This company made an excellent choice by choosing this style. As a manager it is important to know what kind of people your system will attract and if it is right for the company, a lot of research and time will have to be put in to determine if incentives are for you. I agree with the idea that incentives are a great way to motivate employees, but financial incentives are not the only option. We have to begin to understand that there are intrinsic values that are important to individuals, motivation through these values, will help to eliminate the implications of financial incentives. What kinds of incentives have been successful in your work place? Is it a company wide incentive or just in your department? Do you feel that incentives would motivate you to work hard, or do you work to your full potential at all times?

I enjoyed Dan Ariely’s videos on decision-making. “Are we in control of our decisions?” video intrigued me the most. What he means by this is, are we making a decision or is the picture or preconceived notion we have making the decision. He had some great points that I feel need to be showcased. One being his idea of illusions. He felt as if people made decisions based on illusions not on a realistic situation. For example, he shows a picture of a vertical table, which to the eye looks longer than a horizontal table next to it. He asks the question, which table is longer? Most people would answer the vertical table, he then draws lines across both tables, and puts the lines together to show that the horizontal was actually the right answer, to show that we were not in fact in control of our decisions the illusion was. Being able to be in control of your decision is a must have skill. A manager needs to be able to look at infomation and determine if something is an illusion to the eye, or straightforward  evidence to back up a decision. The manager needs to find a happy medium in-between evidence, and their own wisdom, to determine what decision needs to be made to benefit the company/team as a whole. I think this concept should be examined more. We need to know how we can test managers to see what drives their decision making skills. Do you feel that most managers are in control of their decisions? If not, what do you think drives their decisions?

The blog on Harvard Business Review titled, “The Power of Meeting Your Employees’ Needs” by Tony Schwartz, found that there are ways to increase performs other than financial incentives. If you meet four basic needs. The needs are renewal, value, focus and purpose. Once these are met the quality of work improves. A survey was done, that shows how meeting these needs correlates with the variables that influence performance. It was found that when one of an employees needs are met, they report a 30% higher capacity to focus, are more engaged  and have a higher retention rate. This is a good example of research and proven data. There was a meta-analysis of 263 studies across 192 companies and employers with the most engaged employees were 22% more successful. This was not based off of personal opinion, or experience. It was a major undertaking to gather and sort through this data. There seems to be scientific reasoning behind this study. There was a clear goal, framework, and hypothesis. There was an experiment, that yielded data, that was then evaluated. This provides great evidence. As a manager you could look at this study and determine if you wanted to instate a system to help meet the needs of the employees to become a more successful company.

This course in my opinion is very rewarding. I take away warning signs and what to look out for. I found that I am able to look at situations and decipher what is evidence based and what isn’t. Having this ability and then the ability to form recommendations is a great skill to have, and I am excited to watch that skill mature.