Recognize This! – Traditionally structured incentives can be too easily “gamed” to manipulate desired outcomes. “Now/That” recognition is far more effective.
The best of intentions can lead to unintended consequences in many ways, but I tend to hear more stories of this when an incentives program makes its way into the mix. Take, for example, the example of the Goldman Sachs lunch room, told in “Now I Know”:
“Having a lot of high-priced bankers (and everyone else in the company, for that matter) waiting in line for their salads and sandwiches (and cupcakes) is a pretty bad use of company time. So the cafeteria decided to incenvitize lunchers to turn into early-birds or latecomers. Show up before 11:30 or after 1:30 — that is, before or after the typical lunchtime — and you’ll get your meal (is it still called “lunch” if you eat it at 11 AM?) twenty-five percent off. Congestion pricing for soup and sushi, if you will.
“While the idea worked, it unfortunately may have worked too well. According to CNBC, ‘if you find yourself in the cafeteria sometime around 1:20 pm, you’ll notice that the lines at the pay registers are empty. So are many of the tables. But the cafeteria area between where the food is collected and where you pay is quite crowded. The Goldman lunchers are chatting with each other, waiting for the final minutes to tick down until they can save a dollar or two.’ And that makes sense. John Carney, the CNBC editor who first noted the pricing scheme, half-joked that ‘one of the things you don’t want to do as an employee at Goldman — ever — is admit you overpaid for something. How can you be trusted to trade bonds if you can’t be trusted to buy lunch at the best price?’”
The actual impact of the lunch incentive program seems to be three-fold:
- Employees take more lunch time as they waste time waiting for the incentives to kick in.
- Congestion increases as people mill around waiting for the 1:30 mark.
- The Café loses up to a quarter of potential revenue for no obvious benefit.
And this is the primary challenge with traditional “if you do X, then you’ll get Y” incentives. They are easily “gamed” by participants to manipulate desired outcomes. Rather, in most situations, desired results can be better achieved with “now/that” recognition – “Now that you’ve done X, here’s a surprise Y.” Never expected, never anticipated, recognition cannot be so easily gamed.
What behaviors are incentivized in your organization that are gamed today? How could those programs be turned into Now/That recognition instead?
