Incentives. What are they? What is an incentive:
something that incites or tends to incite to action or greater effort
Notice that the definition of the word does not include anything, anything, that speaks to the value or quality of what it is that is acting as the incentive. No mention of the nature of the incentive. It’s doesn’t try to say that it’s something valuable or even that it’s something that other people may not have.
Nope. The key to an incentive is not the THING, but rather it’s the result it affects simply by being. In fact, some of the most powerful incentives are almost worthless:
Jimmy Johnson, coach of the Super bowl Champion Dallas Cowboys, would hand out crisp $5 bills to players that he felt played “an extraordinary game.”
$5. These players make millions of dollars a year and they would beam when handed that crisp $5 bill. Incentives are not THINGS. They are affecters.
I work for a large company, we employ thousands of people. As such, employee salaries are a significant portion of our budget. On top of that, the organization within this company that I work in is VERY dependent on human capital; we have very few other expenses. In this organization we have a need for varying range of skill levels. Much like a baseball organization, we have room for and a need of, “minor league” players. We need these people that have less experience or skills because we want to be able to teach and grow them within our own culture. Another reason is that I have work for that is not very difficult and can be done by those folks that are new or have less experience.
At my level, I see this gradient, I live it everyday. However, just a few levels of management above me that detail is lost, is blurred. At that level, all they see are people, and the number of them. And because that is an easy thing to “count”, it’s the only thing that counts. Every year or budget challenge I am asked to reduce the NUMBER OF PEOPLE.
I am incented to have fewer people. I am NOT, however, incented to have cheaper people. And so I end up with a mix of staff that may be fewer than I like but almost certainly more expensive than I would otherwise be able to complete our goals.
Incentives. Make sure you know what they are. And how to use them.