Interview Tom Foster (Management Skills Blog) – Part 3 of 6

Q3 Dr Lisa: As you know we recommend against most incentive or bonus programs. How does the prevailing belief by Western management that incentives are effective relate to the “best efforts” contract?

Tom: Yes, incentives are effective. They are most effective at creating mistrust in the organization. They violate the implicit contract between the employer and employee. Incentives lay the groundwork for counterproductive relationships and sow the seeds for deceit. Incentives pit manager against employee in a game of underperformance, where the carrot rules.

Even worse, managers use incentives to abdicate their responsibility to hold people accountable for performance. Managers throw up their hands and say, "the only way I can hold my people accountable is to withhold part of their pay until they meet the performance standard." If that is the only strategy a manager has to hold people accountable, then I think I need a different manager.

...to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): December 1, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

Next Mafia Offer Boot Camp -- is December 2, 3, 4 2008 in Denver.

Interview Tom Foster (Management Skills Blog) – Part 2 of 6

Dr Lisa: Tom in your speech you mention the “best efforts” contract that exists between an employer and employee. Could you elaborate on what that is?

Tom:
There is a widely held notion that to get the best efforts from a person, management must engage in a game of trickery, using manipulation, incentives and bonuses to extract the last ounce of willingness from their employees. The notion concludes that employees are basically lazy and to get their best efforts, management must withhold some benefit or some money until that best effort is observed.

Under that notion, the contract reads like this: For your salary or standard compensation, I expect you to show up and trust that you will deliver less than your best effort. At the end, after you have delivered less than your best effort, if I can get you to deliver a little more than less your best effort, I am willing to pay you more.

How silly is that?

It does nothing more than breed mistrust and sets up an incentive system that employees will manipulate. It is a destructive game that tears at the fabric of most intentional cultures.

Now, try this contract: For your salary, or standard compensation, I expect you to show up and trust that you will do your best.

That's it, no games, no manipulation.

...to be continued.

Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.

Are you a Vistage/TEC member who would like your team to hear my speech? Here it is: NEXT Maximizing Profitability Event (no charge): December 1, 2008 in Denver from 1:00 to 5:00 pm at the Science of Business Training Center. More information at http://www.viable-vision.com/. You can register by fax or on-line.

Next Mafia Offer Boot Camp -- November 10, 11, 12 2008 in Denver.