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11/22/2011 04:43 PM
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http://www.industryweek.com/ar...26065.aspx?cid=NLIWCI
The above link will take you to Lonnie's article. I know the opinions are on both sides of the fence on this, but this article articulates well an opinion that I agree with.
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11/28/2011 03:42 PM
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Ken,
I agree with you here. I've seen countless programs like this very carefully planned and rolled out - only to have little or no lasting effect.
As to the suggestion that "meaningful intrinsic rewards are better than extrinsic rewards such as gift cards and small sums of money," that gets a little more interesting. The trick here is knowing your people well enough to know what a "meaningful intrinsic reward" actually is. You see it's far easier to just hand out gift cards and small sums of money - especially if you don't really know your people.
Maybe this would be another reason to go to Gemba?
Tom
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11/28/2011 03:42 PM
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I also concur.
At a bigger level, Dan Pink has made a fairly compelling case about higher-level incentives as well.
This is his TED video:
http://theleanthinker.com/2010...erformance-indicators/
This is a "sketch cast" that covers mostly the same ground:
http://theleanthinker.com/2011...-pink-on-motivation-2/
I also recommend his book "Drive."
In synopsis - If you want to motivate creativity, financial incentives have the opposite effect.
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11/28/2011 03:46 PM
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I'm on the same side of the fence as you. So is any scientist that has ever studied the matter. Read Dan Pink's "Drive" if you want an entertaining synopsis on some of the most interesting studies ever done on the subject. Look him up on TED.com if you want a great video on the topic.
In fact, I wonder if Industry Week could actually find someone with a "strong opinion" on the other side of this debate?
The only way to find someone on the other side of the debate is if you scale it up immensely and start talking about executive bonus packages.
If I could find a mutual fund that invested solely in businesses that did NOT reward their executives monetarily based upon performance. I would invest in that mutual fund immediately. Think of the increased valuation of the stocks if the company execs would simply run their businesses efficiently and not race to meet the quarterly objectives. Think of the millions of dollars that would be saved in each of those companies. I'm not saying the executives shouldn't make large sums of money. I'm saying the bonuses do WAY more harm than good.
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11/28/2011 03:46 PM
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Ken, this article sounds like a re-hash of information that's been around for many years. It's been known for a long time that people are mostly motivated by the recognition they receive for doing an excellent job and not necessarily for any cash awards. Exceptions obviously do occur.
Motivation is further enhanced when the recognition a worker receives is broadcasted to other employees, either to co-workers directly or to all employees attending a monthly or quarterly communications meeting for example.
Tomas
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06/05/2012 08:40 AM
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Thank you for sharing Mark. A couple of key points Dan brings up: Pay people so that money is no longer an issue and management was invented.
What if we did research and paid people at 120% of prevailing wages? Obviously snapshots because eventually everyone would require this practice if it became the new shiny thing but follow the thinking. People would be lining up to work and employees would truly value their job. Deming talked about the mobility of management, what about the entire workforce experiencing atrophy due to the carrot beat down! People would bring their A game every day and be more open to trying new things/contributing new ideas.
Then and only then, send all of our managers back to school to become certified coaches and facilitators (apologies to all of us Sloan Grads). Their new job (paid at 120% market rate) is to coach this newly empowered workforce through achieving excellence as defined by the customer needs and business goals. The more time they save accomplishing the same tasks, the more they get to work on "other stuff" like wellness, development, community service, training/exploring new jobs, etc.
Instead of on boarding and managing the old culture, training would be earned and valued by employee and the business mutually. People would be far more productive trying to earn time (as fixed a resource as you can get!) and challenging themselves while they grow professionally. Most importantly, people would grow. Everyone benefits.
I believe we fail to recognize the impact of our selections regarding pay for performance. "A" performers will usually find some form of work life balance and become B players at some level once they have achieved financial stability in a role where they are happy to level off. We use a normal curve to evaluate and manage pay for performance and motivating with a little fear where the bottom 10% are out, top 10% rewarded and rest looking for another job knowing their compensation is actually declining due to the rate of inflation.
Well done Mr. Pink. Case well thought out, presented and properly challenges us to re think the structure use to confine our Human Resources.
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06/08/2012 05:17 PM
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Why would people truely value their jobs?
By most accounts the UAW employees in the auto factories are well compensated; so well paid that they can't hope to go anywhere else and make that kind of money (at least before the two-scale wage systems, etc).
Did this cause them to value or love their jobs? Did this cause them to "be more open to trying new things/contributing new ideas"? NO. In fact many hate their jobs and felt trapped in "golden handcuffs". I have been in many plants that have 25% absenteeism every day and more after and before holidays, etc.
Conversely, look at Toyota executives. By any accounting they make 1/2 to 1/10 the comparable salaries and benefits of their contempories in the American competitors. Example: when Jim Press retired from Toyota and went to Chrysler he had a ten fold increase in salary.
Reality is that if you have a place where people are paid fairly (NOT 120% of fair) and given respect and the opportunity to master their jobs, have autonomy, and a sense of purpose (yes, that's Pink's line of thought), then they will give more to their jobs and to their company. See "One Team at All Levels" for stories about employees that give 110% at work (Toyota Goergetown) not for money, but because they feel trusted and respected.
Money is a very short term motivator and no way to acheive success. I have left companies to go make less money but make a difference and I have stayed at companies that paid poorly because I liked my boss and the people I worked with and because I felt that what I was doing was important.
I have served in the Army and loved it, but I wasn't there for the money.
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06/11/2012 11:01 AM
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Robert
Points you make are very good. .
Having worked at both G.M. and Toyota it was clear that the work environment/culture set by Sr. Management made a huge difference for motivating all employees. Toyota, being a union free company as determined by the team members, had a true team focus and strong support from everyone for the value adder. In U.S. companies if you asked people who they supported the answer was "the Boss or the Plant Manager". Employees were trained well and given lots of support to contribute. Thousands of people contributing their ideas are more effective than input by a few from the top.
Toyota made sure there was a consistent application of good management behavior across all departments and shifts. Managing in a union free environment was actually more difficult than in a UAW environment since there was not a contract with the "rules" and operating behavior agreed up in writing.
Toyota Georgetown Team Members only spent five years after start up to wage parity for the auto industry. Managers and executives, on the other hand, did not reach parity for many years and never reached parity at the Sr. management level.
Ron Turkett
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06/15/2012 12:10 PM
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Just to be clear: The reason Toyota's work environment works so well without unions is that the employees do not need to be unionized because of all the reasons you and Robert Simonis cited. However, American management is not as enlightened as Toyota's -- and for Detroit employees (for example) to be without collective bargaining would be suicidal!
I have worked in both unionized and non-unionized situations and felt better in non-unionized because I was treated as a valuable contributor to something important for society -- but I would not have continued to work a second day in the unionized job without a union to protect me.
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06/25/2012 12:37 PM
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Robert,
Good points indeed. 2 assumptions to challenge: 1-prevailaing wages are fair and 2-executives aren't fairly paid at 1/10 of contemporaries.
I was talking about the people that do the work and the barriers they face to pride in workmanship. Eliminate the pay compression and un balanced compensation amongst the team by paying all fairly well. In most companies we are talking about a brownfield and need a plan to overcome existing issues.
I agree money is a very short term motivator hence the mobility of management and said executives.
I also served (Army and Navy) and loved it. Learned more before 8am...
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06/25/2012 02:12 PM
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One long lasting theory of motivation is Maslow's Hierarchy of Needs. It's a theory in psychology, proposed by Abraham Maslow in his 1943 paper "A Theory of Human Motivation." To the best of my knowledge it is stil being taught in human relations and management courses. It represents a starting point on ununderstanding what motivates individuals.
Sam Tomas
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06/25/2012 04:14 PM
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Hello All
Thanks Ken for sharing a great article with everyone, and thank you to Mark for bring Dan Pinks comments to more people attention.
Firstly I agree with both Lonnie and Dan, if people are paid fairly and treated properly money has absolutely no motivational factor to it. The unfortunate reality is that we have far to few companies out there that pay their worker forces well enough to take money off the table, and second those same companies rarely treat their workers fairly.
Take a western success story in the business world, Southwest Airlines, they pay a fair wage to all their staff, yet it is in fact below the industry average, to make up for that they share a high percentage of their profit with all their emplyees fairly across the board this makes up for the lower pay scale, and helps protect Southwest in tough times. But their system had an additional benefit, by respect and treating their employees fairly they have the lowest management to worker ratios in the industry. Empowered, and respected workers, in turn respect and power their organization, thus far fewer managers are needed to run an operation, when you know workers do their jobs managers can focus on helping their worker solve problems, when you stop wasting time getting people to do work, it is amazing how many more people you can manage to help solve problems in a day. Southwest's managers for the most part manage and support their workers by helping them, not by checking up and pushing them.
There are hundreds of examples of small companies that succeed for the very same reason they treat their people fairly, and people in turn give them their best. Yet we have dozens of the opposite examples that think all you do is dangle carrots in front of people and beat them with a stick. Sooner or later they fail as people stop caring about the beating and they realize the real carrot is unreachable.
But changing the system won't happen till the stock market stops demanding nothing more than short-term results. Toyota, Honda, Hyundai. Southwest, Virgin Group, and any company owned by Berkshire Hathaway, all have the benefit of strong long-term focussed ownership, something few medium and large companies have the benefit of, instead they have owners that care about nothing more than this weeks return. You cannot build a solid growing enterprise when you have to focus on short-term performance.
GM and many other western companies executives are compensated so highly because their owners got what they wanted short-term results, and when it dries up someone gets axed and the next player gets his shot at the big dollars as do the next bunch of owners.
Until we as a society put an end to, speculation as a way to make a living, the only thing most company owners understand or care about is money, so the only thing they will ever believe is a motivator is the only thing that motivates them MONEY. Science doesn't matter one bit to human perception, unless it backs up that perception.
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07/16/2012 10:11 AM
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Thanks all for this discussion, I am greatly relieved to see that I can agree to almost all of your statements.
Concerning Maslow: A psychologist friend of mine told me once that Maslows pyramid is outdated in modern psychology - As far as I understood it's because they found out that people sometimes intentionally do not keep to the sequence that the pyramid suggests. But still he's a classic and a good entry to understand human needs.
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