The Tale of Ed and Fred… a Story from Dan Pink

Hello PPMA members and friends

I was lucky enough to be invited last week to attend a session with Dan Pink, author of “Drive – The Surprising Truth About What Motivates Us” and more recently, a book about motivation and sales. Mr Pink challenges the orthodoxy around reward and the focus on contingent pay as a means to drive up performance in sales and elsewhere. He believes this approach to pay only works for simple transactional activities and not for complex, creative work. The main issue for people around pay is “fairness”. If you take the issue off the table by paying people enough and in a way that is perceived to be “fair”, people will then focus their creativity on the task and the organisation can focus on the factors that maximise people’s engagement with the task and the organisation they are working for.

Now, I should lay my cards on the table and say that I have never been wholly convinced by the value of having performance pay in the public sector. I am not sure the payback is worth the effort that goes into designing and managing a performance pay system, in an environment where public service remains the prime motivator and the complexity of the work can lead to considerable debate about individual contribution to success

There is now of course increased pressure to drive up productivity in the sector, to justify salary levels among senior staff and to differentiate between levels of performance. Indeed, in the press release that accompanied the publication of the CIPD’s research into employees attitudes to pay that organisation said that “Efforts to reform public services will be undermined unless public sector employees recognise that their salaries should also reflect their performance rather than simply tracking the cost of living.”

I did therefore ask Pink for his views on contingent or performance pay in the public sector and he told the story of Ed and Fred, one a high performer and the other coasting in his job. For Ed, the high flyer, his belief in “fair pay” was being challenged because it was evident that he was working far harder than Fred, but was getting nothing extra. For Dan Pink, the reality is that Ed does not necessarily need more money to sustain his higher performance. The money is symbolic; it shows that his efforts are recognised and it demonstrates that he is progressing, moving forward in his work and career. Other things may do this just as well, if not better, by actually increasing Ed’s engagement with his work. These non-monetary rewards should focus on enhancing Ed’s:

·    Autonomy – giving Ed more self-direction
·    Mastery – giving access to development opportunities
·    Sense of purpose – giving Ed clear leadership and emphasising the importance of what he is doing.

Fred, on the other hand, needs to be managed and to be seen to be managed. Explore what does motivate Fred and what the barriers are. Ensure he is working alongside a lot of Eds and is therefore encouraged to up is performance and cannot disrupt the task. Be fair but firm in taking management action against him.

There will be many that will argue with the views of Dan Pink, believing that good management and leadership is not sufficient to drive up performance and pay and reward remains a key motivational tool. Indeed Mr Pink was challenged at the meeting , not least by Wendy Cartwright , who talked about the performance element in the reward structure at the Olympic Delivery Authority, which she felt was crucial to the successful delivery of the 2012 Olympics.

Pink thinks that many organisations use contingent pay because they are in the habit of doing so and the key thing perhaps is that we consider fully the pros and cons of contingency pay schemes before as public sector organisations simply adopt it because the private sector does. The PPMA’s research currently underway with Mercer will be an important contribution to the debate.

Good leadership and management is of course crucial to the ability of both Ed and Fred to perform at their best. The PPMA is pleased to support the Strategic Leadership in Modern Local Government Programme. Below, Susie Kennedy, Senior Partner for KBA Solutions, who provide the award winning programme, sponsored by the LGA and accredited by ILM describes the programme and how they go about building leaders in local government.

KBA Strategic Leadership Programme

Martin

By | 2017-07-30T12:23:20+00:00 March 4th, 2013|Categories: Martin Rayson|6 Comments

6 Comments

  1. Leatham 5th March 2013 at 11:13 am

    Thanks for this very interesting blog Martin. I am a bif fan of Mr Pink so I cannot be controversial about his ideas or the content of your blog: the book you mention is well worth a read – the content is nothing revolutionary but the style and approach is very engaging. One of the biggest ailments of public sector leadership as I see it is the over acceptance of mediocracy of employee performance – of course there is always a reason for this and the behaviour and attitude that is displayed by employees is what leaders generate and accept. So the sooner action is taken by leaders to achieve a step change with the coasters/under performers in the organisation the better and if leaders are short of an idea on how to do this – Mr Pink’s book has some great ideas.

  2. Ali Godding (@EngagementAG) 5th March 2013 at 11:25 am

    Great blog post – thanks for sharing. Not read the new book yet so can’t comment directly although having read Drive I am generally pro the ‘Pink approach’ With that in mind I may be missing something but…

    It sounds like Pink is advocating one set of principals for the ‘good employees’ (Ed) and another for the ‘bad employees’ (Fred).

    Whilst I am in total agreement with Leatham above who suggests that acceptance of mediocracy is a big problem, for the private sector too I would add. As a nation we need to get far better at this.

    I also think it worth acknowledging that in treating Fred as a ‘bad employee’ by ‘managing him and him being seen to be managed’, depending on the approach taken could be counter productive. In fact the behaviours of leaders who attempt to do this – often do so in such a clumsy manner that they actually perpetuate the ‘parent/child’ trap that is often at the root of poor performance. We create a disempowering organisation and then wonder why employees are not as ‘proactive’ as we want them to be…

    As I say, I have not read the book and the suggestions provided may well be in the style of treating everyone as adults, creating and living by the high expectations needed to give service users / customers the experiences they deserve. I really hope so.

    Thanks again for a thought provoking post – I have sent it on the Engage for Success web content and social team as it is well worth sharing and prompting this thought in as many as possible.

  3. Martin Rayson 5th March 2013 at 1:38 pm

    Thanks for your comments. In an effort to be brief I may well have over-simplified Dan Pink’s approach, certainly in terms of improving the performance of Fred. I was also thinking about responses to staff surveys where the frustration is evident where people seeing poor performance not being effectively managed. I think there is a need to manage people out where consistent performance problems demand, but there are a whole range of actions that should be taken to re-engage Fred and deal with the issues that may be causing the under-performance. At the heart of all effective engagement is having an “Adult/Adult” relationship and that is certainly at the heart of Mr Pink’s philosophy.

  4. Teresa Wadeson 17th March 2013 at 9:20 am

    I agree that fairness in pay is top of the list for employees, certainly in the public sector. However my mantra is that reward is not just about pay. We have to look at it in the wider sense of providing recognition and opportunity through talent management. This can then lead to the ability to earn more pay via success in the workplace. Performance pay can work but it is time consuming to manage, and is prone to being poorly carried out so that we fall back into the unfairness trap, as some managers are better at spotting good performance than others. I also believe we need the Eds and Freds of this world but we need to utilise Fred well in his role and work to recognise Ed’s achievements by moving him on to more challenging roles where he can contribute to organisational success. Via this route he will potentially gain more job satisfaction and higher pay yet a sense of fairness is maintained in the workplace. Identifying talent is the challenge, particularly in large organisations and mak

  5. Teresa Wadeson 17th March 2013 at 9:22 am

    continued … making this systemic rather than a system of annual flurries of feedback and interviews is essential.

  6. Martin Rayson 20th March 2013 at 9:50 pm

    Thanks for your comments Teresa. I would agree that we need to look at reward in its broadest sense when developing a new deal for workers in the public sector. It is hard though to move the debate beyond the size of the annual pay award.

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