Trust, Culture and Incentives

Many companies use incentives and recognition to fix a problem.

Slow sales – run an incentive program.
High turnover – run a recognition program.
Low morale – run an internal sweepstakes.

But the real problem isn’t any of the stated issues above.  The
problem isn’t the lack of a program but something different.  Usually,
something much deeper.  And if you don’t address the root cause of a
problem you can’t motivate and reinforce the appropriate behaviors that
will drive performance.

And many times the root cause is the company culture.  A bad culture will pervert any incentive and recognition program.

I was reminded of this when reading a post on Business Week:  Fixing a Damaged Corporate Culture.

The post described the negative fallout from an employee recruiting
incentive – a referral program.  The program paid $500 for each
candidate referred and ultimately hired.  The gist of the post was that
the program failed because the employees were taking advantage of the
referral program and trolling for candidates and hoping they "hit" with
a person who got hired.  The company was inundated with referrals (the
one thing the employee could control) – yet the spirit of the program
was violated.  The author’s point:

"If the environment isn’t healthy, then all the best-intentioned schemes and
mechanisms will falter or fail. Employee-referral bonus programs, like so many
other management practices ranging from old-fashioned suggestion boxes to
cross-training initiatives to flextime mandates, rely on two critical elements:
communication and trust."

I couldn’t have said it better myself.

Programs and initiatives can only be successful when driven by
honest people for honest people and communicated effectively.  As the
article points out – the employees weren’t the problem.  The culture of
the company was. 

If it is okay to scam a program – then one of two things is wrong.
One – you hired the wrong people or two – somehow, within the culture,
scamming the system isn’t seen as a negative.  Why else would anyone
hurt their own organization by "stuffing the ballot box."  Don’t they
realize it increases workload, decreases candidate quality?  Don’t they
realize they will suffer in the long run for poor hires caused by
sending in bogus referrals?  They probably just don’t care – and that’s
when you know you have a culture problem.

Now, every company has a few employees that will take advantage of
these things.  But overall they should be in the minority.  Knowing you
will have a couple of folks who will try to scam the system, one thing
you can do within the program rules is spell out the process you
"expect" people to go through.  Include a discussion of what you don’t
want. 

Would the program highlighted in the Business Week article have
worked better if there was as discussion about "not sending in any ole’
name" and why it is a bad idea for the employee and the company?  Would
that have communicated better what the real goal was?  Would that help
communicate the "culture" better?  Probably.

In addition, Business Week did an interview with former Southwest CEO James Parker  on culture. 

Here are some interesting selected quotes from the interview…

"The next thing is to create the culture where people feel like they are using
their brains, they’re using their creativity, they’re allowed to be themselves
and have a sense of humor, and they understand what the mission of the company
is."
 
"If people get the idea that this is all one organization with one mission, not
individuals on a bunch of individual missions, then it’s a lot easier."
 
"One of themes of my book is that in any large organization, you have to have
greater leaders at every level. The reality is, when you have 30,000 employees
spread out all across the country, most of those employees are never going to
meet the CEO. They’ll probably never read the company’s mission statement. If
they don’t see the kind of culture that you want to exist in your organization,
if they don’t see it right there on their shift and in their workforce, if they
don’t see leadership from their leaders right there, they’re going to think all
that other stuff is just a bunch of corporate propaganda, just a bunch of b.s."

Notice a pattern here?  Trust is a huge part of each of these quotes.
Trust that employees will use their heads, trust that employees, once
they understand the mission will perform, trust that everyone is seeing
the same culture throughout the organization. 

Same with the referral program.  Trust you won’t scam the system, trust you will only recommend people you want to work with.

You can’t trust a program to fix a problem with trust.  Trust me.