Organisations tend to base performance management approaches, and many other practices for that matter, on the assumption that human beings are innately self-interested. As such, motivational tools tend to be individually focused and based on financial incentives. For example, many roles still run along a ‘reward or punish’ line. That is to say, bring home the bacon and you’ll receive big bonuses; produce mediocrity and you’ll be sanctioned with taking home only your basic salary.
But are we really that self-interested?
Our founder Lynda Gratton has investigated the contrast between the self-interest that organisations expect from their people and what we actually see around us. She points out that many people give their time and resources to help others. Crucially, they do this without getting anything back in return except, perhaps, personal satisfaction. What gets in the way of this natural propensity to give is in fact the performance management structures that many organisations have put in place. These structures isolate personal monetary reward as the sole driver of performance, and underplay the contribution of other more complex motivational factors such as autonomy, mastery of a skill, and a sense of purpose. Therefore, despite being institutionalised in many companies, the wholesale belief in the innately self-interested human being is perhaps misguided.
Increasingly complex world, increasingly sophisticated solutions
Organisations seeking to enhance their performance management approaches must therefore look beyond traditional, hyper competitive performance management where the only motivational tool is financial reward. It is, of course, perfectly possible to manage people in this traditional style, but the outcome is usually compliance, rather than innovation or high performance. As I mentioned in a previous post, we live in a world where the work we do is increasingly complex, requiring employees to produce more sophisticated solutions. A more holistic approach to performance management, in which people are self-directed and engaged, is far more likely to achieve the sophisticated solutions required. To see how this might work in practice, I’d like to introduce you to Atlassian, an Australian enterprise software company. Every third week of the month, Atlassian gives its software developers 24 hours to work on whatever they would like and with whomever they wish. The only caveat to this is that they present what they worked on to their company. Not in a formal, boardroom-style meeting, but in an informal, party-style meeting intended to create a collaborative and innovative environment.
Through creating a more intrinsically motivated workforce, thanks to a reduction in the amount of individualized incentives, Atlassian’s once-monthly 24 hours of innovation has led to myriad improvements for existing software and ideas for new products. This shows that exactly what so many employers are nervous of, giving autonomy to people, can achieve precisely what they need: engaged people producing sophisticated solutions.
For more information about tools that give people the chance to set their own agenda, invest in the future of their organization, and create solutions to complex challenges themselves, you can read about our FoWlab Jam platform here.