Employer Incentives

Failure to Perform: Part 2

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Reach a goal concept with businessman running on a treadmill for money
Who is Danny/Shutterstock

What are the researchers saying about performance incentive plans?

Daniel Pink is a world-renowned leading author on workplace motivation and performance. He has done some compelling research and has developed some very interesting insights on what really motivates us to perform. His studies were well-designed and replicated in North America and in other countries.

The research is very interesting and at times confusing. Sometimes money is a motivator and improves performance, but there are times money is not a motivator and actually leads to poorer performance. Many organizations, managers and HR departments do not truly understand the complex interaction of money as an incentive to employee’s behaviours. Here is a short video clip that does a great job at summarizing his motivational research.

Click here to find out want Daniel Pink’s money motivation secrets are.

Daniel Pink also provides us with three key insights on how to truly motivate individual performance. Some companies have one insight, some have two, but very few companies use all three of Daniel Pink’s insights to get the best performance out of their employees. How can HR lead the way and bring this type of research into business operations?

Discussion Questions

  1. After watching the video clip explain when money is a good motivator for individual performance and when is it not?
  2. What are the three key insights to motivation? Why is it so difficult for organizations to implement these key insights to obtain greater employee performance?

Creating Strategy With Criteria

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Wooden stool
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As we have learned through our studies, affordability, legality and employee attraction are three criteria which must be met in order for any compensation strategy to be successful. If a compensation strategy is developed which is not affordable, it will not work. If it is based on shaky legal principles, it will not work. If it is not attractive to the employee marketplace, it will not work. Like the three legged stool, each of these elements must be in place in order to create and support a sustainable system for future success.

Of these three criteria, affordability must be considered in the context of the employer’s overall financial obligations and opportunities. The compensation plan is one piece of a monetary puzzle that the employer must piece together as part its overall revenue and expenditure plan. Financial obligations on the part of many employers include significant loans from financial institutions to cover items such as start-up costs and on-going operational requirements.

With this in mind, Social Capital Partners in Ontario have implemented a ‘Rate Drop Rebate’ program that supports the development of affordable compensation, by providing a rebate on the interest rates for employer loans or lines of credit. This program is only available in three Ontario municipalities at this time.

Click here to see a CBC interview with Bill Young explaining the benefits of the ‘Rate Drop Rebate’ program.

Click here to see how the program works for employers.

This program also addresses the second criteria, legality, by ensuring that appropriate recruitment and selection procedures are in place when making hiring decisions. As for the third criteria, employee attraction, this seems to be the strongest focal point for this program. The targeted employee marketplace for hiring through this program includes students with limited work experience, long-term and older unemployed persons, people with disabilities, newcomers to Canada and unemployed indigenous people.

This program offers evidence that a sustainable compensation strategy can be implemented by ensuring that each one of these three criteria is taken into account.

It also provides evidence that these criteria can support employers in the creation of social good.

Discussion Questions:

  1. After reviewing the link for the Rate Drop Rebate program, what types of recruitment strategies are in place that support employers?
  2. Why do you think the Rate Drop Rebate program should be used in other municipalities?
  3. As a Compensation Specialist, what are the risks and rewards that this program could offer your current workplace?