I was idling through the business pages this weekend (I know…my actions qualify me for a Millet’s overcoat!) and stumbled across a fascinating review of a new management book published by Canongate books – the title being Drive: The Surprising Truth about What Motivates Us. The author Daniel H Pink, business leader, was writing about his experience at work. This feature made me leap from my chair with a yelp and Mrs S shot me an agonised glance that said ‘Oh Lord, he’s off again!’
Daniel Pink was describing the complex problem of pay and rewards for two private sector ICT companies (from the US and UK) and, more specifically, how their sales team were motivated to increase sales. Equally complex systems had evolved in both companies where commissions were characteristic as the main means of increasing motivation to improve sales -in sales a fairly traditional mechanism to stimulate employee productivity.
The two companies (Red Gate Software from Cambridge in the UK and System Source from Baltimore in the US) had developed increasingly sophisticated means to overcome human behaviours that manipulated ‘the system’ in order to maximise commission returns. Eventually, and entirely independently of each other, they thought the unthinkable and decided to scrap the commission-based carrot and stick reward system – preferring a flat-rate, salaried approach.
The result? Improved teamwork, improved employee engagement and improved sales.
In the public sector as we contemplate total rewards and contribution pay, Daniel Pink’s work suggests to me that we need to construct and implement our reward strategies with great care. After all…we’re strapped for cash as it is.