If you only have time for the punch line: Drive by Daniel Pink - READ IT
and figure out how it is going to change your business starting
tomorrow.
For everyone else, a little more detail. Last November at
our People Report Best Practices Conference (#PRBPC) we started the
conversation about Capitalism 2.0 and the new workplace. Based on
what we are learning through our research and our quest to move
beyond metrics to predictive analytics, we are more convinced than
ever that the key to transforming our workplaces will be rooted in
big change - not incremental tweaks of existing policies,
processes, and practices - but in completely rethinking the
workplace - and perhaps even the "work".
We all know that there are countless human resource practices
and policies that are relics of the post WWII industrial age, that
have become part of our corporate mythology and have gone for years
without examination or analysis: pay for performance, bonus
plans, job descriptions, 360 reviews, vacation policies---there are
dozens of policies, processes and practices that need to be
reconsidered.
Compensation practices, particularly in large organizations, are
likely to be the hardest and most difficult to even consider
changing. However, revisiting these practices could
potentially yield the most benefit.
People Report research tells us that compensation is broken at
all levels of the organization, benefits are commoditized, and we
are not really paying for performance.
This is an analysis of our total cash compensation for general
managers, the bellwether position in our industry for predicting
the success of the business. It compares their compensation
to comparable store sales---the holy grail of retail benchmarks.
Theoretically, if pay is highly correlated to performance we would
see a pattern like the graph below.
We don't. Instead, we see a pattern like this graph,
utterly random, with no correlation, a pattern that has held for
almost five years, before and after the downturn.
This is where Mr. Pink
comes in, and his brilliant work begins to tee up the
solutions.
Conventional wisdom (remember what Freakanomics taught us about
that) tells us that if we give people incentive compensation
to perform - they will. But these extrinsic motivators - the
carrot on the end of the stick - are not working the way they used
to - or the way they should . Pink's book clearly outlines
that extrinsic motivators such as bonuses and
compensation can be effective - but only in a very narrow
band - typically for hourly employees or candidly for widget work -
like Lucy and Ethel in the candy factory. The
conventional wisdom of the industrial age, which is so hard to
leave behind, is in fact, leading us astray in the information
age.
Pink carefully lays out the science behind the case for changing
our approach to motivating and rewarding workers in the
21st century. His presentation at T.E.D. last
November is a great snapshot of his work.
http://www.ted.com/talks/dan_pink_on_motivation.html
I love this book for a lot of reasons; it is well researched, it
asks some pretty important questions about how we make a difference
- in our workplaces, our families, and our own lives - and then it
goes about answering those questions. There is a great
toolkit at the end of the book, to help jump start practical
applications.
Tackling corporate conventional wisdom that has flourished for
decades, especially in the big buckets of motivation and
compensation does not promise to be easy. But to borrow a
line from Apple, it's time to "think different." A new year
and a new decade is the perfect opportunity to start reassessing
how we create flourishing workplaces that can grow and be
profitable. Read Drive,
pass it along, buy a copy for your boss, talk about it here.
Dan Pink will tell you, "Change is created one conversation at a
time". Let's get this new workplace party started.