June 30, 2010

Higher pay hurts performance, & other interesting ideas

Posted by John Nack at 3:29 PM on June 30, 2010

Comments

  • Noah — 5:50 PM on June 30, 2010

    It’s a great video, but it’s not “higher pay hurts performance,” it’s “bonus incentives actually decrease performance.”

    [Good point. --J.]

    Higher pay is often what is necessary for what the video says actually works — paying people enough so that worries about money are off the table, and off their mind.

    (Bonus incentives are usually what people put in place when they won’t/can’t pay everyone the salary they need to be paid.)

  • imajez — 3:41 AM on July 01, 2010

    Very timely post. A friend and I were discussing motivations, money and incentives only last night and in particular how people are so very motivated by passion and interest in what they are doing, where financial rewards, incentives made no
    diference.
    The animation of the talk is simply wonderful as well. Shame it didn’t pull out to show entire piece at end.

    The problem with the approach suggested in the talk, as Noah has also pointed out, is paying people enough for money not to matter. That is actually quite a lot of money in most cases, so this may only work in companies where the people involved are already well paid [relatively speaking]. But then jobs that require higher the cognitive skills where this approach works best, should be better paid than the norm.

  • Todd — 10:06 AM on July 01, 2010

    I agree with Noah. It’s not the higher pay it’s the competing for a finite bonus. In engineering we should be working for a common goal not trying to undermine each other to get the carrot.

  • Sandi — 2:47 PM on July 01, 2010

    I agree with Todd. Although I’m not an engineer, I feel all of us should be working for a common goal and not trying to undermine each other to get the carrot. Management should encourage all it’s members to work for a common goal even if it is just in their part of the organizational department. I don’t like being undermined by a co-worker just so they can get more money.

    • imajez — 4:21 PM on July 01, 2010

      The well regarded UK store chain John Lewis, does not have staff/employees, it has partners, so when the company does well, then ALL the partners get rewarded, not just the very few at the top. I also seem to recall that they get more say in company decisions than is usual too.

  • Justin — 3:08 PM on July 01, 2010

    I think Daniel Pink has solved the five year funk. Most new engineers have the “mastery” thing going for them, but maybe not much in the other degrees of freedom. After five years, you don’t have as much mastery going on, so unless your company throws autonomy your way, your are bound to be in a rut.

    (But maybe that is just me, but I can’t stand how little say I have in anything, when i used to not care at all)

  • Madan — 2:54 AM on July 08, 2010

    John,

    WHO SAID MADURAI IS ‘RURAL INDIA LIKE’??

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