Could Your Incentive System Be Hindering Performance?

What if that carrot we offer actually slows them down?

In the effort to motivate our teammates, we are quick to offer carrots we think will incentivize them to greater efforts.  But as this story of the Soviet Union’s most prolific athlete shows, sometimes our incentive system can do the opposite of what we intend and actually inhibit greater effort.

Here’s why your incentive system may be flawed, and three ways to get the best out of your teammates.

Could Your Incentive System Be Hindering Performance?

Making it Look Easy

At the 1970 World Weightlifting Championship in Columbus, Ohio, Vasily Ivanovich Alekseyev from the Soviet Union stepped up to the platform.  On the floor in front of him was a barbell weighing just over a quarter of a ton.

Up to this moment, no one on earth had ever broken the 500-pound barrier using the “clean and jerk” technique in competition.  Alekseyev was going to try to change that.

He chalked his hands for better grip, then stood facing the hushed crowd, closing his eyes and gathering himself mentally.

After a moment, he bent over, placed his hands on the knurled steel bar, and locked his fingers around it.  The room fell deathly quiet.

Suddenly, with a smooth precision and barely a grunt, he jerked the weight off the ground and stood with it, bringing it to rest at his shoulders.  The steel plates clanged on the ends of the bar while the crowd roared it’s encouragement.

After a brief pause and a few quick breaths, he flexed his knees and  quickly straightened them again, making a little hop that started the weight further upward.  As it rose, he stepped under it, straightened his arms and stood erect.  The weight hovered steadily overhead while the crowd erupted in applause and the judge signaled a successful lift.

Alekseyev had become the first man to lift 500 pounds overhead in competition.  And he was just getting started.

Between 1970 and 1977 he went on to set a total of 80 world records. He was clearly the greatest of his generation, unbeaten, and holding the European and World Championship titles for eight years running.

With his fluid, athletic style he made breaking world records almost look easy.  At one point, a commentator even remarked that he made it appear as if he was simply lifting a broomstick over his head.

But that’s the thing: in a relative sense, for him it was easy –  in fact I’m not sure he was even giving it his best effort.

Here he is in action:

The Downside of Incentives

The truth is that he may have been able to set world records much higher than the ones he put into the record books.  How much more we’ll never know.

What was holding him back?  The incentive system he was working under.

As an encouragement for him to perform well, the Soviet Union made it policy that every time he broke a world record, he would receive a hefty bonus.

Alekseyev was no dummy; he was quick to see the problem with that system, or for him, the opportunity.

If he performed at his absolute best in competition, he would crush the record and get his bonus.   But there would be no guarantee that he could do it again the next time around, and no record meant no incentive bonus.

So instead of giving his best effort every time, he made sure that he only did just enough to win and set a new record, but no more.  He advanced the world record incrementally, about a pound at a time each time he competed, for eight years.

Is it the Right Tool?

There are many who believed that he had the ability to break the mythical 600 pound barrier.  Whether he could we’ll never know.  Age caught up to him before he had inched the world record that high, and after a poor showing at the 1980 Olympics, he retired.

If the goal of the Soviet Union was to amass as many world records as possible, they had a great system in place for doing so.  Alekseyev’s record-breaking achievements happened almost as regularly as clockwork throughout the 1970s.

But in the pursuit of those records, they lost the opportunity to find out what Alekseyev was truely capable of.  Their incentive system discouraged him from giving his very best effort, and rewarded him only for doing a little bit better each time.

A Better Incentive System

In his book Drive:  The Surprising Truth About What Motivates Us, Daniel Pink points out that in our attempts to motivate, we tend to focus on the extrinsic, or external rewards, like offering the proverbial carrot to the donkey.

But as we’ve seen, dangling carrots may only be sufficient to keep the donkey plodding along, not making him stronger or faster.  Pink even details seven ways that extrinsic rewards like money actually can make things worse, including reducing creativity, encouraging unethical behavior, fostering short term thinking, and as we’ve seen, limiting performance.

Of course, what he calls “baseline rewards” like pay and benefits need to be adequate and equitable, or there will be very little motivation at all.  Beyond that he believes that the best use of money is to pay people enough to take the issue of money off the table.  Then you can focus on where the real potential lies:  intrinsic motivation.

Three Intrinsic Motivation Areas

For your incentive system there are three areas of intrinsic motivation that have the potential to improve performance far beyond extrinsic ones.

Autonomy.  An overly controlling environment can be a motivation killer.  But when people feel that they have influence over the tasks they perform, how they manage their time, the techniques they use, and even the teams they are on, they feel in control and become more engaged with their work.

This doesn’t mean there’s no accountability.  But relaxing the controls over how the job gets done and giving people the freedom to choose the “what” and “when” can give them the motivation they need to do it well.

Mastery.  Pink found in one study that the desire for intellectual challenge and the inherent need to master something new and engaging was a top predictor of productivity.  Adding new and more absorbing challenges, and offering opportunities to improve skills and abilities can make work more interesting.

Look for what he calls “Goldilocks Tasks” for your teammates – ones that are not so simple that they become bored, but not so difficult that they fear to attempt them.  Find something “just right” that challenges them to learn and grow, and they will become more engaged even as they develop new skills and expand their capabilities.

Purpose.   Making and selling more wigits faster than the other company may be the job, but that perspective is not enough to build commitment and zeal for the work.  Connection to a greater purpose, a larger body of people, or a lasting legacy can spur them to better performance.

In the business of the day we can become overly focused on the “what.”  As leaders, we can help the team be more productive if we help everyone remain attuned to the “why.”  From your organizations’s vision, to team goals, to individual daily tasks, if you can connect their work to a greater purpose you give them greater reason to produce and an opportunity for personal fulfillment.

Incentive Systems That Hinder – The Takeaway

The Soviet incentive system under which Alekseyev competed certainly put bread on his table, but it also prevented him from reaching his true potential.

In leading the people in our own organizations, if we want to unlock their true capabilities, it’s important to take a hard look at the incentive systems we have in place.

For many, cash reward is only effective up to a point, beyond which it can actually be counter-productive.

Smart leaders dig deeper to unlock the motivation that lies within each of us.

When people feel they have autonomy, an opportunity to learn and grow, and a purpose that extends beyond them, they are more likely to be engaged and committed teammates, and you all will benefit from their efforts.

Lead on!

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