Business is about outcomes. Outcomes produce products or services, which in turn produces revenue. Even revenue is an outcome. Some struggle with creating outcomes. To address this management develops incentives to drive better outcome production. The belief by management is that the incentive will satisfy the worker who in turn, will accomplish the desired outcome. In other words, management is taking advantage of their perception of the relationship between satisfaction and outcome; they believe that satisfaction drives outcomes.
Does this work?
To better understand this relationship between satisfaction and outcomes, we have to first identify what satisfies. This isn’t a beverage commercial, so all of those thoughts need to be put aside. The idea that what I believe satisfies me will satisfy others isn’t always a good idea.
I recall a time when I was redesigning an employee incentive program that was to be based on achieving specific customer satisfaction goals. The previous system was expensive and not achieving the desired results. In business terms, the Cost-Benefit Analysis showed it was failing. After a series of town hall-style meetings, questionnaires and feedback sessions, a complete revamping of the process was undertaken. What satisfied the frontline employees was recognition. They wanted to be recognized instead of receiving just money. In short order, a recognition plan was put into place that rewarded employees for behaviors that drove customer satisfaction. Managers were provided low dollar gift cards for on the spot recognition. A quarterly reward program that provided a nominal financial reward was established. Those who received the award had to be nominated by their peers. Winners of the Quarterly Reward were considered for an annual reward. In all cases, the standard was that it improved customer satisfaction. Part of its value was that it would cost 1/3rd of what the former plan did and was projected to achieve the desired outcome.
Executive leadership rejected it because the reward was too low. I was able to coach them into letting us try. To speed the story up the outcome was a huge success. Employees loved the program for a variety of reasons. It made them feel appreciated, and they valued that their views and desires were used in developing this.
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What this demonstrated was:
- Executive leadership felt that what satisfied them, satisfied everyone
- Executive Leadership was not accepting that different things motivate different people
- Executive leadership believed that money replaced the concepts of praise and recognition.
The successful outcome of the process was the direct result of accepting that:
- Asking employees what satisfied them was a critical component of the process.
- Employees believed that they would be given what they wanted because they knew it would cost less and achieve the desired result.
- Employees believed in the goal that we were trying to accomplish.
The process of Coaching executive leadership into accepting that different people are motivated by different things, while also demonstrating that the risk of not giving the employees what they wanted was that the goals would not be accomplished, solved this dilemma. Executives began to behave differently and actively participated in the process of spot recognition. Because their rewards were tied to the successful outcome of this process, it helped drive their satisfaction with this process. Their rewards were based on what was satisfying to them.
The realization that satisfaction drives outcomes is the bottom line.