A practical question for you: “What should employers do to make their employees work harder when financial incentives [aren’t effective] anymore?”

What do you think? Let’s take a best case scenario – all of your employees are paid properly, fairly and well for their level of work, experience, contribution and cost of living needs. You’ve seen the negative fall-out from financial incentives (cash bonuses) and are looking for other methods of motivation. What are the options you would legitimately consider? Behavior-based employee recognition? Efforts to change the company culture to create a workplace employees want to engage in? Something as simple as a team lunch?

Would you consider implementing stacked ranking – as a method of motivation, I mean? A management professor at Wharton considered this, “… looking at rank as its own reward. I wanted to find out whether workers truly want to know how they rank against their peers and … if they knew how they ranked, did it cause them to adjust their effort?”

Paul Hebert over at i2i raised some interesting issues with the research and how it was constructed, not least of which the pool of workers used (recruited from Mechanical Turk, meaning they work individually on self-selected projects with no known relation to each other).

As for me, I just don’t see how the professors findings could be put to practical use.

Quotation

“A good employer knows its employees very well and should have a good idea how they will respond to the prospect of being ranked. The key is to devote more time to thinking about whether to give feedback, and how each individual will respond to it. If, as the employer, you think a worker will respond positively to a ranking and feel inspired to work harder, then by all means do it. But it’s imperative to think about it on an individual level.”

On the surface, that sounds good. I couldn’t agree more that employers/managers should know their teams well and should give them feedback in the way they prefer. But… How do you implement a ranking system in which some employees participate and some don’t? It’s like being only a little pregnant.

Every employee should be ranked against him or herself. Full stop. Did they grow, learn and improve? And yes, you must give them feedback, positive and negative. Research shows the worst thing you can do is give no feedback at all.