Barry's SuperBlog » Alfie Kohn

Unintended Consequences? What do Very Large Bonuses Attract?

Barry Mapp — Sun, 04 Oct 2009 12:28:46 +0000

It would appear that Very Large Bonuses Attract – Very Greedy People. Now if experience tells us this is so (and certainly Alfie Kohn’s research showed that one thing that bonuses and other rewards don’t do is to lead to long-term improvement) how should we read the statements that have been made by the top British Institutions that if they don’t pay large bonuses their top earners will go and work for European or American Companies. Put these two ideas together (Greedy People and Go Elsewhere) and a super strategy for British Companies would be to – wait for it – stop paying bonuses. Bonuses might attract top earners but experience (with the credit crunch etc) is telling us that these top earners do not benefit their organisations IN THE LONG TERM (and therefore do not benefit any of their stakeholders in the long term either).So are there some British Companies out there brave enough to stop paying ‘performance related’ bonuses and to see what happens? The consequences could be very good! Not a loss at all but a gain. All the greedy earners who don’t care a stuff about the customers, will go to the competitors (hooray I hear from all those people who have suffered from all this miss-selling), leaving space for a new type of entrepreneur to take up these jobs within companies – (those with an innerpreneur mindset). Would not it be good for the long-term success of financial institutions for example if all the work was done by employees wanting to do the very best they can to give good service for past, current and future customers. Unfortunately as Kohn showed many years ago, big ‘carrots’ move the focus away from the service. The focus in the bonus culture is “what do I need to do today to make my carrot bigger (and also give me bragging rights to the biggest carrot)”. The focus should be of course be “what do I need to do today to really help my customer?”So should not our politicians be suggesting that bonuses simply STOP in order to make our Institutions better? This then leaves one question. If such an organisation goes on to make increased profit in a ‘no bonus for performance’ model, how do all the employees get to share in this success as an intended consequence? (Answers not on a postcard, but please post your suggestions here) What is a fair way to keep the focus on customer service, and to share in the benefits that accrue from being a truly long-term customer-focussed (as opposed to a bonus-focussed) company?

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How Rewards Sabotage Creativity

Barry Mapp — Sat, 29 Aug 2009 13:24:29 +0000

The best creativity arises from intrinsically motivated individuals – those who are doing something for the satisfaction within the task itself or for the satisfaction from the completion of a task. Intrinsic motivation is driven by curiosity and the desire to make a difference. Extrinsic motivation is driven by the temptation of a carrot or the fear from a stick.Intrinsic motivation is sabotaged by rewards. It’s almost that simple.With rewards, the focus is on the reward not on the desire to complete a task or to make a difference. People start to do the tasks for the reward rather than the satisfaction of doing something of value.Old Psychology demonstrated that animals do things for reward or to get away from pain (the carrot or stick approach). Old Psychology holds when the animal has survival needs unsatisfied (the hungry cat can be tempted but the satisfied cat can’t) and the theory of manipulation by carrot or stick holds true (Skinner’s original work with animals actually only worked when they were frightened and half-starved).New Psychology is different. Creation Companies are those that are becoming more and more tuned in to New Psychology and New Thinking Principles. A Creation Company will recognise that when a human being has most of their basic needs met, carrot and stick is not as effective as Old Psychology predicts (thought those that would say they are ‘hungry’ for success can be tempted by the really big rewards).But as Alfie Kohn and now Daniel Pink have affirmed there is very little evidence that rewards improve human performance in the long-term. And the main reason is that extrinsic motivators sabotage intrinsic motivation. Linking pay to performance therefore sabotages long-term performance. The Banking Crisis is an example that partially arose when companies, and individuals, focussed on the carrots and not on the service. Lose sight of the task and you lose sight of the potential disastrous consequences of doing things for the wrong reasons. Thus it is not therefore a question of moderating the bonus culture, with legislation if necessary, (as Politicians and Business Leaders would suggest) rather the question is how can we abolish the bonus culture.We need to find mechanisms whereby people benefit from the long-term success of an organisation rather than rewarded for the profit they make on behalf of the company as individuals. We need this for companies to become Creation Companies that produce goods and services for the general good and well-being of people, life and the planet. That do things for the seventh-generation long term and not next year’s wage packet.If you are a leader and you are not convinced by the idea that rewards sabotage intrinsic motivation (and thus also sabotage creativity and creative thought) then read Alfie Kohn’s “Punishment by Reward” or view Dan Pink’s video on the surprising science of motivation here Now is the time for leaders to wake up to the fact that much of what we do in the guise of ‘management’ is detrimental to improvement (see here the Seven Deadly Diseases of Management)

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Creation Companies: Apply the principles of New Psychology to Business

Barry Mapp — Thu, 30 Jul 2009 22:21:33 +0000

Applying the principles of “New Psychology” to BusinessBoth New Psychology and New Science are underlying themes in this Superblog. Let’s just take a first brief look at what we mean by the terms New Psychology and Old Psychology and next time we’ll look at “New Science”.

The following is adapted from a Paper presented by Barry Mapp in 1994 at the ERIK Network European Conference “Regional Successes in Creating and Connecting Companies – European Union Perspectives”

Psychology has always been important in BusinessIn Business, psychology (i.e. our understanding of, or beliefs about, human behaviour) has always been an important factor in “how we do things around here”. Psychology thus underpins the workings of both the old and new style company paradigms. The Psychology of Compliant Companies is “Old Psychology” (behaviour that is predicted primarily from studies on starving animals or unhappy or sick human beings). The Psychology that underpins successful Creation Companies is “New Psychology” where people behaviour is predicted from the studies of animals that were happy and cared for, or from research on human beings that are living happy and fulfilled lives. Note that nearly all textbook psychology is “Old Psychology” – so you won’t find much about new psychology from standard psychology books.It is interesting to note that most of our business advisory groups (like Business Link in the UK) still promote business systems based on old psychology and indeed their own organisational structures and processes are rooted in old psychology. Most Government strategy around influencing business and services is based on old psychology and even most business consultants (including those who profess to be thinking outside the box) are often using “old psychology” techniques and theories. The following table shows some of the fundamental differences between Old Psychology and New Psychology approaches.Old Psychology Principles (this includes):

(extensive use of) Extrinsic Motivators (Carrot and Stick)
People Treated like children (heavy on rules and regulations)
External Targets set from above (nearly all are arbitrary!)
Blame culture. Whose fault? Whose head must roll?
Visible are many of the Seven Deadly Diseases of Management

New Psychology Principles (this includes):

(Mostly) Intrinsic Motivation (very reduced use of punishment or rewards, work not bonus driven)
People Treated like adults (owning the work principles)
Goal setting by the people (seeking alignment with the leaders goals)
A ‘No Blame’ culture. What happened? What can we learn?
Cured, or nearly cured, of the Seven Deadly Diseases of Management

In many ways the Old Psychology is the Psychology of the exceptions – the study of the minority studied under unusual or poor conditions.

New Psychology is based upon understanding how the majority will behave under good conditions. So Old Psychology does hold true under stressful or fear conditions, and likewise New Psychology holds true under joyful and happy conditions.

The New Psychologies embrace ideas like those of Glasser (Choice Theory), Kelly (Constructive Alternativism) and Griffin and Tyrell (Human Givens approach). New Psychology is congruent with Kohn’s research on Co-operation and Motivation, with Dweck’s research on “Self-Theories” and with Deming’s ideas on the transformation of management. (More about each of these Psychologies in later blogs)Coming Next: New Science, New Thinking and Creation Companies

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