Financial Incentives – do they work?

Revisit an Important Topic – a repeat posting from 2013

It is accepted wisdom in human resource management practice that financial incentives, wages and bonuses, drive work performance((1)). This is a part of our business and political culture.((2)) Though studies and surveys have shown for decades that people find many other factors (growth of skills, engagement, sense of purpose, social connection, and many others) to be important in their work, the key to every human resource management strategy has been the compensation plan. Increasingly over the past couple of decades human resource management professionals have devised ever more complex methods for connecting various performance metrics to compensation plans. 

Do Financial Incentives Work? Continue reading

Footnotes:
  1. Note that we are talking about individuals here. Organizations, for profit, non-profits and government, definitely react positively to financial incentives and disincentives []
  2. In fact the notion that people make “rational” decisions based in part on financial rewards is a central pillar of our “if we only let markets work, everything will run smoothly” culture. []

Are You Worrying? Stress Management on the Job

scared-cat-free-clips

Worrying is a most unfortunate state, generally unproductive, tiring, and otherwise annoying. The human mind seems to have a special gift for generating worries. Thus, the whole field of stress management. A recent conversation with a client about new procedures in his business generated the following comment: “Now that I have these new processes in place I feel more relaxed.”
 
This made me sit right up. How had this happened? What stress management technique had he applied?((1)) Continue reading
Footnotes:
  1. Keep in mind that he did not start out to manage stress, rather improve customer service. The stress management came as a side effect. []

Prospects and Networking – build success at the end of a conversation

The Critical Moment

The Conversation by William McElcheran, Calgary Canada

Many people struggle with how to open a business conversation with a new person or prospects. Lets assume for the moment that you have solved that puzzle and are now actually engaged in a conversation, whether in person, on the phone or via email. Typically little thought is given to how to close a business conversation. Yet, this is a critical moment. Done with a little thought you set up the next conversation and deepen your business relationships with prospects and networking contacts. Before you say, “Thank you for taking so much time to speak with me.”(or whatever phrase you use to close a conversation), you must set up the next conversation with your prospects and networking contacts.

Continue reading

Product Obsolescence – an end of life process

The Human Body’s End of Life Process

Avram-Hershko-NYTs-06192012On June 19, 2012 the New York Times published an article, “The Body’s Protein Cleaning Machine” about the Nobel Prize winning chemist Dr. Avram Hershko. His life work has been on understanding how the body’s cells rid themselves of old, defective proteins. Every cell has a protein ubiquitin that tags old and degenerated proteins for destruction. “Maybe you’ve heard of Parkinson’s disease and Alzheimer’s? There we have bad proteins accumulating in the brain and destroying brain cells. The reason we don’t get Alzheimer’s when we are 10 is that when we are young, the bad proteins are disposed of quickly. With age, the cell’s machinery may lose the ability to do that.”

This very interesting notion that the body has a built-in mechanism to rid itself of bad proteins reminded me of old lessons about the need for our businesses to have a similar mechanism. Product obsolescence is a terrible drag on sales and gross margins. A better strategy is to have an end of life process to drive out product obsolescence. Peter Drucker ((Peter Drucker, The Effective Executive, Harper Colophon Books, p.108)) put it this way:

Systematic sloughing off of the old is the one and only way to force the new. There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.

Are you persuaded that your business needs An End Of Life Policy? Continue reading

Perfection through Subtraction – The Little Prince

“Perfection is attained not when there is nothing more to add, rather when there is nothing more to subtract.”

Le Petit Prince book cover

Le Petit Prince book cover borrowed from GoodReads.com

Listening to an interview with an author about his writing process brought this wonderful quote from Saint-Exupery.((1))

Simple, clear, direct, user-friendly, straightforward, honest, classic, understated. These are some of the attributes that flow from thinking about your business with Saint-Euxupery’s aphorism in mind. In philosophy, science, and engineering Saint-Exupery’s aphorism is best expressed by Occam’s Razor where the razor shaves away the unnecessary assumptions.

Then, of course in the day-to-day world we have KISS – keep it simple stupid – that stands in for these more elegant formulations. The general lesson here is to beware of complex explanations, strategies, and plans.

Footnotes:
  1. He is the author of The Little Prince (Le Petit Prince if you got to third year French in high school), though the quote come from Terre des hommes []

Drucker on Concentration, Performance, Results – The Effective Executive – 6

“It is more productive to convert an opportunity into results than to solve a problem – which only restores the equilibrium of yesterday.”

In earlier posts in this series on Peter Drucker’s book The Effective Executive: the definitive guide to getting the right things done, we reviewed his list of basic practices:

Effective managers:

  1. “….know where their time goes.” 
  2. “….focus on outward contribution”
  3. “….build on strengths….” 
  4. “….concentrate on the few major areas where superior performance will produce outstanding results.”
  5. “…. make effective decisions.”

Peter Drucker's The Effective Executive

This posting is devoted to the fourth practice, concentrate where it counts.((1)) 

If there is any one “secret” of effectiveness, it is concentration. Effective executives do first things first and they do one thing at a time.((2)) Continue reading

Footnotes:
  1. All quotes in this posting come from pages 100-112 in Peter Drucker The Effective Executive: The Definitive Guide to Getting the Right Things Done. Revised. Collins Business, 2006. []
  2. Note that decades before the controversies over so-called “multi-tasking” Drucker notes the singular importance that people can only effectively do one task at a time. I have written about this earlier in “Multitasking, Too Much Information, Interruptions, and High Performance”  []