Incentive Systems

Incentives are one of the most dangerous ideas ever to hit business and should be used with extreme caution

Eben Pagan states he has never heard of a system to quickly give people intrinsic motivation, but has heard of experimen

External rewards can destroy intrinsic motivation, making people lose interest in activities they previously enjoyed

Research experiment with children and coloring books: kids given gold stars for coloring lost interest when rewards were

Once you introduce incentives, you cannot test whether people would have performed without them, creating a permanent dependency

Eben explains that changing commission processes on salespeople 'doesn't usually go over very well' and once someone get

Incentives create 'game the system' behavior where people focus on working the system rather than achieving genuine results

Story from Wheeler's 'Understanding Variation' about a shift supervisor who moved finished products back onto the convey

People motivated by incentives are often smooth talkers who over-promise and under-deliver to meet their targets

Eben describes how incentivized salespeople talk clients into things by 'promising a little more than you can really del

Advertising can 'unsell' customers just like incentives can demotivate employees

David Ogilvy in 'Ogilvy on Advertising' talks about how advertising can unsell customers - you can spend money on ads th

Share wealth and proceeds fairly with your team while avoiding performance-based incentive traps

Eben advocates to 'share the wealth of course share the proceeds that come so that everyone looks around and says yep th