Gray Southon wrote:
> Could you expand a little on what you mean by incentives and incentivising?
>
> My experience is that incentives can easily become boundaries that limit
> independence.
Hello, yes, I think the recent thread on compensation and rewards
highlighted this difficulty in setting adequate incentives.
According to the classical transaction costs theory (Williamson),
rationality is too bounded for managers to fairly and accurately set
incentives that reward and reflect each and every individuals'
contribution to the organization. Hence, profit related pay seems like a
good idea in theory but turns out to be problematic to implement in
practice.
It is irrational over time for people to persist in working long hours,
serving customers excellently and so on without direct reward- be that
incentive intrinsic, extrinsic or a combination of motivational factors.
I am always surprised by people who work 60 hours a week for set pay.
They must have an intrinsic motivator such as sense of worth from working,
but this does not always come across as passionate caring about business
in the workplace.
People seem to make an implicit or explicit bargain with themselves to
cede independence in return for regular- if pretty fixed- incentives.
Companies hold back on giving responsibilities that truly challenge people
and as such employees compromise their ability and achievement in return
for regular pay. Only by rewarding directly for effort- which turns out to
be almost impossible within organizations- can we expect the individuals
to perform to the highest of their abilities, serve customers excellently
and so on.
As such the whole notion of providing adequate and accurate incentives
within organization strikes me as inherently problematic.
When I talk about incentives, what I really mean is those incentives
conferred by market forces. I believe that the best way to incentivize
people to learn, collaborate, create, achieve excellence and all of those
other positive constructs associated with work, is within a market-based
dynamic organizations such as a collapsible corporations in which members
voluntarily cooperate and collaborate to meet customer requirements. If
its my customer, as opposed to my company's customer- if they are ringing
me and not my company- then I am directly motivated and rewarded for
responding with excellence.
Under the transaction costs paradim (Coase) economic activity can be
carried out within markets or firms. Firms as we know them today- office
based, permanent staff, integrated arose because the transaction costs
from organizing using the market were higher than those from using the
firm for the same amount of production. But now enabling technologies are
reducing transaction costs and thereby facilitating collaboration within
markets- partnering, outsourcing, teleworking and so on and we ae stuck
with our outmoded office and organizations.
It has been my own personal discovery that it is within such dynamic,
positive constructs that true incentives are to be found- some of them
compelled by the need to bring in an income but most of them motivated
because direction and course are not being set by someone else or confined
with static structures.
regards sincerely Simon Buckingham
http://www.unorg.com/teleworking.htm/
--Simon Buckingham <go57@dial.pipex.com>
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>