Employee Motivation – getting it right Oak Ridge Part 2

Two weeks ago we interviewed 11 employees of Oak Ridge Conference Center in Chaska
Minnesota. We were trying to understand what Oak Ridge was doing to create such a highly
motivated work force.

Oak Ridge Part 2

The 4-Drives and motivation at Oak Ridge

A few weeks ago Susan and I spent the day interviewing 11 employees at Oak Ridge Conference
Center in Chaska, MN (see Oak Ridge Part 1 here). We had observed that Oak Ridge had
“gotten the formula right on employee motivation” and wanted to probe more to find out how.
From our original findings, we highlighted five things that stood out: 1) leadership counts, 2) It is
not about the money, 3) It is about the team, 4) Genuine recognition rejuvenates and 5) It is all
about appreciating people. I’m taking a different approach this time, looking at it from the 4-
Drive Model and seeing how each of the drives is accounted for.

Drive to Acquire & Achieve:

The lack of emphasis on this drive was a bit surprising to me. There was much less focus on
bonus and incentives than expected. Oak Ridge did have a few typical recognition programs that
were seen as being moderately motivating (Employee of the Month, Shining Stars). The one
program that focused more on Achievement and was viewed as very motivating to a lot of people
was their weekly Legendary Moments. This was seen as a significant opportunity to be
showcased for your outstanding achievement – not only by peers but also by customers.
Legendary Moments is a weekly whole company gathering in which individuals are recognized
for their outstanding service, highlights of the week are discussed, and fun updates are given.

One worker described Legendary Moments as “A weekly ‘pick-me-

up’…I feel that it is a best practice. It is energizing, re-energizing,
and positive to listen to coworkers and customers tell about a job well
done. I really enjoy it.”

Drive to Bond & Belong:

This was much higher than expected. People continually commented on how Oak Ridge felt like
a “family” or that the sense of “team” was undeniable. There was a significant lack of territorial
silos with lots of discussion on how everyone was working on the same team. People expressed
how everyone pitched in to help when it was needed regardless of title or role – if sheets needed
to be changed, everybody would be there helping out including the General Manager. The
bonding goes beyond just the employees, but it is encouraged to happen with the customers as
well. As one person said, “these aren’t just my customers, they are my friends.”
This sense of bonding and belonging started at the top with Senior Management taking the time
to get to know employees on an individual basis – knowing employees names, what is going on
in the employees family, activities that individual employees like to do at the initial interview. It
was perpetuated by daily “walk-abouts” by the management team, with a cup of tea, asking how
things are going throughout the building, what is happening in their lives, what is new or exciting
in their lives. We see this personal bonding as a significant factor in the overall motivation and
satisfaction level at Oak Ridge.

One story that exemplifies this was how that when an employee’s young
child was sick and in the hospital, the General Manager sent a care
package that included a stuffed hamster. From his frequent informal
discussions with this employee, he knew that her child loved hamsters and
that it would be a special gift.

One person stated this about how they feel about their bond with the
guests, “The guests are my family and it is my job that I take care of them.
I keep them fed during break and take care of them. It makes me happy
when they are happy.”

Drive to Challenge & Comprehend:

Being a service organization, people commented on how they were constantly being challenged
by the various situations that occur naturally when dealing with customers. This was seen by
most interviewees as keeping their job interesting. They relished the opportunity to “solve”
peoples issues. As one worker stated, “the attitude here is that we need to do everything possible
to serve the customer and make them happy.” That provides an opportunity for employees to
have a sense of autonomy as they are empowered to solve those issues. They are given free rein
to “serve the customer and make them happy.”

This is translated into not only doing this reactively, but looking for opportunities to shine.
Every customer that comes in is an opportunity to seek out what it is that really drives them and
what they need. Stories abound about how a Server overheard that a client liked a soda not
provided and went out and got that for them, or how the Housekeeper realized that a client was
using a lot of this product and brought in extra. Not as obvious but also very important was the
constant sharing that occurs. Legendary Moments is a structured communication tool, but all
levels of management also have meetings daily to review what is going on, and the informal
communication that happens between teams and levels is constant. Management encourages this
and helps it with their daily walk-abouts.

One customer from Australia came into Oakridge very distraught and
upset that all her luggage had been lost. The front desk immediately
started to “solve” her issue, even though Oak Ridge had nothing to do
with it. The customer was given money from petty cash to go and buy
some new clothes, transportation was provided to her to do this, the GM
ok’d phone calls back to Australia to talk with her family at no cost and
the IT person came in to configure her computer that wasn’t working so
 she could e-mail. All of this happened without reviews or meetings –
much of it undertaken by front-line employees. By the end of her three
days, the customer had converted from being upset to being so grateful
and happy that she provided flowers for the staff as a thank you.

Drive to Define & Defend:

Oak Ridge’s reputation is outstanding. This brought a lot of pride and satisfaction to the
employees. They felt proud to tell their friends where they worked. One person said, “I like
going to parties and talking to people about [working here] because someone always tells me
about their great experience with us.” The environment that Oak Ridge is situated in helps as
well as the building design which brings the outside in – with lots of windows and natural light.
It is enhanced by the service that is provided to their guests and the constant focus on “serving.”
This is key to understanding the overall motivation of the employees. Psychologically they
identified working at Oak Ridge as a part of who they were and they felt good about it. They

Oak Ridge Part 1

Susan and I just had the wonderful pleasure of spending a day interviewing 11 people at Oak
Ridge Conference Center to try to uncover their secret - because they have gotten the formula
right on employee motivation.  Anyone who has ever stepped into their facility outside of
Minneapolis can attest to the customer service mentality that every employee exhibits - from the
front desk, to housekeeping, to the chefs, groundskeepers, and even in accounting.  There is a
definite difference in how the majority of these employees "show up" at their job everyday and
how they view and take care of their "guests".  They are truly a company that is doing something
right.  While we haven't had time to fully analyze the interviews (we will in the upcoming
weeks), there are a few things that I can say definitively:

1.  Leadership counts - the one overriding conclusion that hit us in the face was how important
leadership is in this process - they need to be present, genuine, and focused on the right things. 

2.  Its not about the money - I was a little surprise to hear (actually to NOT hear) about bonus
plans or contests or other recognition that had a big dollar value.  It wasn't important.  It didn't
drive their day-to-day activities or play an integral part in their motivation.

3.  It is about the team - teamwork was an overriding theme in all of the interviews that we did. 
It wasn't ever about "my job" but instead about serving the customer.  If that means that top
managers have to change sheets, then that is what happens. 

4.  Genuine recognition rejuvenates - real, honest recognition that is done on a regular basis, in
public, helps reinvigorate and help drive the culture.  Knowing that their work is important and
recognized keeps people engaged. 
5.  Its about people - employees were seen as people first.  Management spent time getting to
know them, getting to understand who they were, spending time finding out about their families
and interests.  They care and it shows.

Over the next few weeks we will let you know more about our findings and get in depth with
some analysis.  Oakridge has been kind enough to give us access to their people and allow us to
share our insights with you.  There is something to learn here if you are interested in creating a
workforce that is motivated and engaged. 

Amazon exiting the incentive game

The end of the game

So Amazon is leaving the incentive market which they just entered three years ago.  From all
reports it isn't because the venture isn't profitable, but instead it is about ensuring that their brand
and their customer service reputation are not sullied.  Paul Hebert in his blog wrote, "the
decision was made to drop fulfillment through incentive programs due to customer service
issues.  Specifically, the recipient, if they had problems with their order, would call Amazon for
resolution but Amazon would have to refer them back to the incentive company - who in turn
would do the due diligence to fix the problem.  From Amazon's point of view this created a
negative impression of their customer service."  In a nutshell, they are taking a hit on millions of
$ to make sure there is no negative impact on the billions of $ that they do in their non-incentive
business.  In my mind, that is a pretty smart move (one that you wouldn't see a lot of businesses
making).  Now I'm sure there are other factors (i.e., tax issues, not controlling the customer
relationship, etc...).  Nothing is ever quite as black and white as it seems. 

In the short time that Amazon was in the market, they shook it up.  They offered a new way of
fulfilling incentive program offerings.  With their great number of items, their back end
processing and handling, drop ship expertise, and their low price points, Amazon was able to
provide even the smallest incentive companies with a very sophisticated e-catalog of incentive
goods.  No longer did an incentive house need to have the large capital expense of a warehouse
and stocking products.  Amazon was able to provide the back-end seamlessly for a price that
couldn't be beat. 

Playing against Amazon

I was part of a large pitch (as a partner with a traditional incentive house)  last fall to a company
that loved what we did, trusted our customer service, thought that our creative approach was the
best and liked the way we brought behavioral science into the process (i.e., The Lantern Group) -
but, ended up going with a different company because they could offer more merchandise at a
lower cost point.  How did that other company do it - they used Amazon as their fulfillment
partner.  At that point, I thought I saw the writing on the wall - that the days of making large
margins on merchandise were all but over.  How could the traditional companies compete, when
smaller, more nimble and aggressive firms could come in and under-price while having a larger
item selection and great fulfillment services.  In the debrief with the company about why we lost
the business, the purchasing agent said, "...this is the wave of the future, all [incentive]
companies should be doing this."   It was going to be a new world - and I was excited! 

Changing the game

For years the pricing model used by incentive companies has been margin based.  While there is
nothing wrong with this conceptually, it does create an interesting dynamic.  Merchandise is the
cash cow for these companies.  Without this, many of the companies will fail.  There is an
underlying need to get people "into the warehouse."  When I started my career (many eons ago) I
was naive enough to think that when I was hired on at one of these incentive companies that I
was going to work for a consulting firm that was trying to find the best way to motivate and
engage employees.  What I found out was they were all for that - as long as the way to do
motivate and engage led through the warehouse (I'm exaggerating a little here for emphasis, but
there was an underlying culture of this).  While that culture has shifted slightly over the years, it
is still present in the industry.   If Amazon was going to be able to undercut prices because of
their buying power - then incentive companies were going to be forced to change their model. 
This would mean finding other ways to make money - which would lead them to finding other
ways to increase motivation.  The benefit would have been that these companies would have
created a larger toolbox with more tools and thus not fall to the old idiom "when you only have a
hammer, every problem looks like a nail."  

The next competitor

While Amazon might be leaving, they showed that there was a desire in the marketplace for
something like this.  I don't think there is another company right now that could fill that role, but
that doesn't mean in the future there couldn't be.  So, with that in mind, it is important to think
about the next game.  What will this mean for the traditional incentive houses, for the mid or
small sized performance improvement firms?  Will someone take that bold step to change the
game and bring in a different set of tools or will they exhale a deep breathe

Delta Airlines Customer Service Failure: Motivation Observations

Recently I was in Dallas conducting focus groups. After two long days of travel and facilitating,
I raced back to DFW airport with the intent of trying to get on an earlier flight that I knew left at
3:15 PM. Admittedly, this was a crapshoot and I would be cutting it close. I was scheduled for
the 5:55 PM flight, but the 3:15 PM flight would get me home in time to see my family before
my two young children were in bed (which is pretty important to me). As luck would have it, I
was able to return the rental car, run to catch the bus to the terminal, get my ticket, and get
through security and arrive at the gate at 2:55 PM – a good 20 minutes before the flight was
scheduled to depart. Here is an approximation of the exchange that occurred between me and the
gate agent who we will call Mr. No.

Dallas, March 24th, 2:55 PM

Kurt standing at the counter said, “Hi. How’s it going? I’m on the 5:55 flight but was hoping
there might be a seat open that I could fly standby on this one.”

“Are you a gold or platinum member?” Mr. No replied.

“Not anymore.” said Kurt, wondering why that mattered, “Is there a seat available?”

“I can’t help you if you’re not a gold or platinum medallion member.”

“So there’s a seat but you can’t help me?” Kurt asks with some despondency.

“I can’t get you on now. If you had been here ten minutes earlier I might have gotten you on.”
said Mr. No.

“I don’t have any checked bags and will sit down right away. I promise.” Kurt says hoping a
little levity might help:

“I’m sorry. I can’t have you go down there - they are getting ready to leave.”

“So you won’t help me? There is 20 minutes before the flight leaves!”

“You’ll just have to take your original flight.”

“I’ll pay. What would it cost to change?” Kurt said

“$50. But I can’t do that now.” Mr. No says right before turning his back on me and checking
some paper coming out of the printer.

“Ok?” Kurt said, while pulling out his i-phone to start Twittering about this horrible experience
with Delta.

Motivation Observation

It appeared to me that the agent was concerned about the on-time status of the flight, the extra
work it would cause to put me on the flight, and the fact that I wasn’t a premium status customer
more than he was concerned about responding to my needs. I could go on and on about the
motivation (or lack thereof) of the gate agent for Delta, but I do not know that agent, or the
procedural rules or incentives that Delta employs to drive motivation – so any insight would be
conjecture.
What interests me was my response to this situation and the motivation that drove that response.
My first inclination having been denied appropriate customer service was not to ask for a
manager or send an e-mail to Delta’s customer service – it was to get on Twitter and to tell over
700 people about my “horrible” experience. I ended up tweeting about this over 15 times in the
next 3 hours either directly about the experience or responding to other people’s tweets about
this. Here are my first 4 tweets (typos and all):

“Delta airlines won't let me board plane on standby because it leaves in 20 minutes - horrible
cust service!”

“I understand why airlines get such a bad rap - counter agent too concerned about on time
deptarture and not cust service”

“Delta #fail here is plane that I can't board http://twitpic.com/1aoaj7”

“Flight leaves at 3:15 I was here at 2:52 - agent couldn't accomodate me ( not gold or platinum)
even if I paid! http://twitpic.com/1aob2q”

In terms of the four drives, which drives were activated? Clearly, my Defend drive was kicked
into high gear. The fact that I felt that my goals were being hindered by a Delta kicked that
Defense Drive into overdrive! I felt I needed to get payback and the idea of Twittering about this
provided a means of vindication. I would make Delta pay by announcing how horrible they were
to the world. Hundreds of people would hear about it in real time and who knows, it could be
passed on to hundreds or thousands more through retweeting.

Therein lies a potential second drive – the drive to Acquire. While this sounds contrary since I
wasn’t going to the manager or to customer service to ask for money or a free ticket, what I was
doing was looking for recognition. Recognition from others on how I had been wronged. I
wanted the world to know about what I was going through and to recognize me for that fact.

This leads to a third drive that was Activated – the drive to Bond. By tweeting about this I was
engaging in a conversation with other people about my experience. I was commensurating

The Lotto Game – what would you do with your life if you won?

Spock or Kirk? How do you motivate?

6 Lessons from “The Maze”

Over the past 18 years I have conducted a team building

event called the Electronic Maze® with hundreds of
companies and thousands of participants. Sometimes called
the “Magic Carpet” the Electronic Maze is extraordinary, not
because it is magic, but because of the team behaviors and
emotional responses it elicits. Those behaviors and
emotional responses are surprising similar across a wide
variety of groups: senior managers, line workers, middle
management, cohesive teams, strangers, international
audiences, men, women, and every group that we’ve ever
done this with. Those behaviors are also very insightful as to
how we perceive the world, work with each other, and get things done.

The Maze works like this - between 10 and 25 participants gather around an 8 x 6 checkered
carpet that is broken into 48 black and gray squares (like a checker board). Some of these
squares “beep” when stepped on while others do not. The facilitator begins by arbitrarily
splitting the group into two subgroups, one on each end of the carpet. The objective is then
given:

To get everyone across the “maze” as quickly as possible via a non-beeping path with as few
penalties as possible.

However there are some rules. For every rule broken, the facilitator will assess a penalty.

 Can move only to an adjacent square– forward, backwards, sideways, and diagonal
 Only one person on carpet at a time from each side
 Must keep path in your head – No marking the carpet or drawing it out
 No touching people on carpet
 After a person steps on a beeping square, they must retrace their exact path off of the carpet
 No talking - after2 minute strategy session
 Each side must determine a rotation for people to go across the maze

Over the years, six key learning’s that have surfaced from this (there are others, but these seven
are pretty universal). Here they are:

We have a compulsion to compete

When we begin the event, we separate the team into two halves and put them at opposite ends of
the maze. We specifically never say that they are individual teams – yet 99% of the time, the
two halves feel that they are competitors on different teams. Obviously the drive to compete is
very strong if this happens within seconds of being separated (research supports this see . Even
when one or more of the team members ask if they can work together (to which we always just
repeat the objective and point to the rules) they almost never do. The
\\What we found was that even as we increased the premium on cooperation, so that players
made most money by contributing 100 per cent of their money, on average people contributed
significantly less than 100 per cent,' said Professor Stuart West of Oxford University's
Department of Zoology, one of the leaders of the study. 'In fact even when full cooperation
delivered the best financial returns between 66 and 94 per cent of people still saw fellow players
as their competitors.'

We have an obsession with moving forward

The path through the maze requires that at a specific point people are required to take a step
backwards in order to proceed. At this point in the maze, every team I’ve ever worked with has
repeatedly stepped on one or more of the “beeping” squares that are forward of them. Many
teams even after repeated attempts cannot fathom that if they just step backwards they will
ultimately move forward. They step on the same beeping squares over and over and over again.
Sometimes for over 10 minutes – stepping on the same three or four squares, somehow thinking
that they will magically not “beep” this time. In fact, I’ve had teams get so frustrated that they
throw away the path they already know works up to that point, and attempt to find a new way,
convinced that the path they were on was a decoy path and that the true path forward must be
elsewhere.

Need to step
backwards

How quickly we’re let down

"I am not discouraged, because every wrong attempt discarded is another step forward."- Thomas
Edison

The strength of patterns

Strategy plans usually fail, but strategy still happens

The facilitator gives the participants their two minute strategy session and then calls for
quiet. The teams begin the process of trying to figure out how to get across the maze. Typically,
they start by having people line up by each of the rows to remember the “good” and “bad”
squares for that row. They send the first person through. The first person steps on a square and
it beeps or doesn’t. That person keeps going until they do step on a beeping square (which
always happens relatively quickly). This strategy typically falls apart as soon as one of the
people assigned to keep track of a row needs to take his or her turn on the maze.

Trust is delicate

References:

University of Oxford (2010, May 21). Mistakes can explain 'cooperative' behavior. ScienceDaily.
Retrieved May 22, 2010, from http://www.sciencedaily.com

The Motivation of Patrick Rothfuss

What is it that motivates us to perform at a level above everyone else? Why is it that some
people strive for perfection while others settle for mediocrity?

I am a huge fan of Patrick Rothfuss, the author of “The Name of the Wind”
(http://www.patrickrothfuss.com/content/index.asp). It is by far one of the best books I’ve read
in years (not just in the genre of fantasy, but one of the best books overall). Not only is the book
wonderful, but Mr. Rothfuss’ blog is fantastic. His writing is witty, fun, unabashful, honest,
evocative, approachable and completely engaging. His video interviews are also extremely
enjoyable – hearing him talk one quickly appreciates his wit and intelligence. I have often
found myself laughing out loud or having my head shake up and down in agreement with
something he is saying.
One aspect that I admire about Mr. Rothfuss is his dedication to write at a level that is as close to
perfection as he can get. That means he just doesn’t settle for “good enough” (I wish I could say
that about my writing). This also means that he has delayed the much anticipated release of his
second book much to the dismay of many fans (and I’m sure his publisher) at least a few times.

I am interested in understanding what it is that drives this motivation. Can we understand Mr.
Rothfuss’ dedication through the lens of the Four Drive Model? Is this possible? So I decided to
ask him.

What Dan Pink’s new book, Drive, Should’ve Said!

There is more to motivation than just extrinsic rewards, but they should also be part of the
mix?

There has been a lot of interest lately on the web and in other venues regarding Dan Pink’s book,
“Drive – The Surprising Truth About What Motivates Us.” The book, as he states, brings theory
into reality. Mr. Pink’s talk touched on a variety of motivational aspects and the science behind
them, but generally, the subsequent discussion has mostly revolved around the effectiveness of
extrinsic rewards in today’s new economy. The prevailing attitude, by many bloggers and to
some degree Dan Pink himself, is that incentives and rewards do not work in today’s work
environment that requires creativity, flexibility, and speed. I disagree with that premise.

First, it is important to understand the underlying motivations of people and to structure

programs and work to enhance those aspects. Second, as Dan states, Autonomy, Mastery and
Purpose are great motivators. Third, incentives are also great motivators. In other words,
incentives are not bad, they just need to be structured appropriately to tap into the key
motivational drivers and be part of a larger, holistic approach to motivation.

Dan cites Edward Deci and Richard Ryan, highlighting some of Deci’s early 1970’s research that
showed how children, when paid to play with a puzzle, did not play those puzzles on their own
time as much as children who didn’t get paid did. This seminal work in Psychology helped push
research into intrinsic motivation and was ground breaking in its time. Fast forward, to the
1980’s and 1990’s, another researcher,

There needs to be an “I” in TEAM!

How to keep yourself motivated when the world is crashing around you
Would you rather have a $5,000 bonus check or a job that was challenging your intellect?

3 tips to increase the Drive to Acquire & Achieve

The first drive in the Four Drive Model of Employee Motivation is the drive to Acquire &
Achieve. This is typically the drive that most organizations focus on when they are trying to find
a lever to influence employee motivation. However, companies often get too caught up in the
financial aspects of this drive (i.e., how much of a raise can we give, what is our targeted
incentive/bonus payout, etc…). The following are three quick tips to help you think about how
to impact this drive and increase employee motivation.

1. It’s not just about the money. This drive also includes the drive to achieve. Achievement
takes on a number of different forms. Think about this in terms of grades – there is no
monetary component to this, yet we are driven to try to get an A. In organizations,
recognition is a very powerful motivator because it recognizes individuals or group
achievement (kind of like a report card). Organizations can tap into the drive to achieve
by focusing on ensuring that recognition is done correctly (e.g., timely, relevant, and
appropriate to the effort/result). Achievement is also about setting realistic goals that can
be achieved. Short-term milestones are elements to use to help keep this drive up. One
way to think about this is to think about the need to reinforce achievement on at
minimum every 5 weeks. If you don’t have a milestones set up that fall within that
timeframe, you will tend to lose people. Make sure that you celebrate those milestones as
well, one thing that we are trying to get better at The Lantern Group is celebrating when a
project or milestone is done. We get so caught up in the next project or next event that
we don’t take the time to stop and congratulate ourselves on a job well done.

2. Perks. While we tend to focus on the big items like pay and bonuses with this drive,
some of the more powerful levers that we get to pull are smaller “perks” such as office
space, titles, parking spots, flexibility to work from home and other things that help
satisfy the Achieve drive. In addition, there are a number of small perks that also tie into
the Acquire side of the equation, such as pizza Fridays, movie days, lunch seminars,
discounts on classes, days off, foosball or pool in the office, employee of the
month/quarter/year… You will notice that a number of these also contribute to the other
three drives of Bond & Belong, Challenge & Comprehend, and Define & Defend (see
also Four Drive Model).

3. Improve your Total Rewards Communication. Too many times we’ve worked with
companies that offer fantastic total rewards – not just their base salary, but their benefits,
bonus programs, culture and recognition opportunities; however, no one at the company
knows about these programs because they are outlined in a legal terms in a five different
50 page HR documents. It is vital that you market what you are providing to people in a
way that will capture their attention and convey the big picture. That means that you
 have to overcome silos within the organization and market your Total Rewards as a
comprehensive program that highlights the offerings from across the organization. Also,
make sure that your Total Reward communications are not just a one-time effort at the
beginning of the year, but instead a campaign that highlights various aspects of your
offering throughout the year and keeps people engaged and charged up.

While the concept behind these ideas is simple, the implementation of them isn’t always as easy.
If you need help, please give us a call. We can help you work through the issues and improve
your employee’s motivation!

Kurt

3 tips to increase the Drive to Bond & Belong

The 4-Drive Model of Employee Motivation’s second drive is the drive to Bond & Belong. The
drive is defined by our innate desire to form “close, positive relationships” with people around
us. The image of the lone wolf going it alone or the inventor holed up in his workshop are
atypical – most people want to bond with others and feel they belong to a group. Here are three
tips to increase the B Drive:

1. Create a culture that encourages bonding

Many organizations frown upon the fact that employees appear to waste time and effort
by having personal conversations at work, goofing off, or having social activities going
on. Rules and regulations are put in place to limit this type of behavior or even outlaw it
altogether. The fact of the matter is, allowing or even encouraging this behavior (in a
responsible manner) helps employees bond with each other and recharge. It also leads to
creating a sense of belonging that helps drive increased motivation and engagement with
the organization and its goals. Try getting rid of those rules and building a culture that
celebrates the human side of employees.

Tip: Try not to encourage people doing working lunches at their desks – invite them to
lunch or have lunch time activities that get them to come together in the break room.

2. Promote teamwork through job design

A key way of developing increased bonding is to design it into the job. This means
putting people in small teams to work on projects, creating opportunities to engage
cross-functional workgroups on projects, encourage job sharing, create a mentoring
process, provide cross-training opportunities, and any other way you can structure jobs to
be more collaborative. This not only enhances people’s opportunities to bond, it also
enhances creativity and learning.

Tip: Form a series of small, cross-functional best practice investigation teams who are
 tasked with coming up with ideas on how to foster greater collaboration and teamwork.

3. Sponsor social activities

Corporate softball teams are more than just a way to blow off some steam, they actively
get people together and bonding. Organizations can increase the bonding drive by
sponsoring any number of social activities including: happy hours, bowling leagues, book
clubs, brown bag lunch seminars hosted by an employee (or outside person), yoga,
sessions, birthday celebrations, anniversary parties, summer picnics, winter skating
parties, and other types of social activities.

Tip: Hold a movie screening at the office. Get a projector, a conference room, bring in
some popcorn and show a movie. You can even structure it so that you have a discussion
about it afterward or make fun comments throughout like Mystery Science Theatre 3000.

Would love to hear if you have any other ideas that would help increase the drive to bond. Let
us know in the comments area!

3 tips to increase the Drive to be Challenged & Comprehend

3 tips to increase the Drive to Define & Defend

Four Drive Model of Motivation Explained

5 things Managers can do today to improve Employee Motivation

Top 3 fallacies on Employee Motivation

Children and Motivation

Walking with my child – wants to be carried, until we get closer to the playground – now he has
the energy to run. Lazy kid or motivation kicking in? Proximity effect (predictably irrational).
Behavioral Economics

This is a very interesting video (albeit a little long) about the rise of behavioral economics and its
impact on the economic and political world .  I find this topic fascinating as it helps in
understanding some motivational impacts and also the limit of some motivational theories
(including the Four Drive Model).  We can all learn from the insights here.

I want to state that while I agree with some of the comments and disagree wholeheartedly with
some others.  In particular I tend to agree with the ideas brought up by Leigh Caldwell and Mike
Savage and pretty much dismiss the conclusions made by Emre Ozendoren.   The idea that by
nudging behavior in a way that is deemed more appropriate is in some way totalitarian is utterly
preposterous.   It is indeed, in my mind, dismissing the idea that we have choice.  What Emre is
missing is that we are already constantly nudged.  The fact that changing the nudge to be
something that Is going to be more beneficial for society or individuals is not invasive - it is just
a different nudge than the one that is currently going on. 

Also, I believe there is a little bit of sophistry going on when they talk about behavioral
economists thinking people are “irrational.” The “irrational” component discussed by most
behavioral economists is not to say that we are mad or a little cracked, but that we do not always
behave in a classic economists’ rational manner. In other words, emotions come into play and
we don’t always optimize our economic well being. The fact that some of the speakers in this
are trying to position the behavioral economists as thinking people mad is a little misleading.

All in all – this video raises some good thoughts and sheds some light, I believe, on the juncture
of classic economics with the newer thoughts around behavioral economics. Watch and enjoy!

What type of short-term incentives work best?

I poised the following question to an on-line professional sales group that I’m a member of:

“What type of short term sales incentive rewards work best? I was wondering what people in the group
thought were the best types of short term incentive rewards? Research shows that most people will
tend to pick cash but that performance actually is better with non-cash rewards (trips, merchandise,
etc...). What are your experiences with this - have you seen a difference in sales results with different
types of rewards?” Within 24 hours I had received 45 responses. I summarized those 45 responses and
created the following summary that I presented back to them. I thought that this might be interesting
post for this blog as well… here is my summary:

Thanks everyone for such great input on this question. Your responses have definitely provided some
great insight into what makes an effective short-term incentive. I will attempt to summarize the 45 posts
on this so far and would love more feedback in case I’ve missed something.
In general, it appears that most respondents felt that cash is a key part of the overall compensation, but
that it is probably NOT the best medium for a short-term program. There is a strong preference for non-
cash and recognition type of rewards. As Greg D put it, “Recognition drives as much healthy sales will as
money.” As indicated in the question itself, research has shown that non-cash awards typically
outperform cash awards in the same incentive program. The general gist from the responses so far
seems to support that finding. Dick O said it best when he said, “I can't remember all of that cash that
I've won. ..I'll tell you though, that I remember each time I was recognized.”

There was also a significant emphasis on not having a “one-size fits all” approach and to create
individual incentives whenever possible. Dana W summarizes this feeling with “No one incentive is going
to work for all people.” Another aspect that was discussed was bringing in others (spouse, family) to the
reward. These types of rewards were thought by some to provide “extra” incentive to earn them.
Allowing sales person input into the actual award was also mentioned.

A key component to this all was brought up by Tim M and Tom F – that the structure of the incentive is
as important or more important than the type of reward offered. On this I would have to agree. In my
experience, how the program rules are structured, who is eligible to win (or more importantly believe
that they can win), the timing of the incentive, and how results are measured are going to make or break
any program. As Tim stated, “…the type of reward has less to do with the success or failure of a contest
or incentive than the STRUCTURE and TIMING of the incentive.”

Thanks to everyone for their input – I’d love to have more discussion on this and how incentives can be
structured to be more effective moving forward. On an end note, just some of the fun reward offerings
that I found interesting: bottle of wine and dinner, time off, give to charitable foundation, becoming a
member of a special “club.”

Kurt

Litter Motivation

I am a little dismayed with humanity right now.

I spent last Saturday morning cleaning up my neighborhood. This is an annual volunteer event that the
Whittier Neighborhood association sponsors and we’ve done it for a couple of years now. In a matter of
a little over two hours my wife, my 3 year old, and myself collected three large garbage bags full of litter.
The things that people throw out and leave on the sidewalk and street are amazing. Obviously there are
the cans and bottles, the candy wrappers, fast food wrappers, the old newspapers and magazines.
There were also expired prescription pill boxes (with pills in them), paint cans, CDs, and some items that
are used by young lovers in parked cars that get thrown out when done (ewhh….). But by far the largest
number of items I picked up were cigarette butts. There were literally thousands on the 10 blocks that
we had to clean. I felt like I was walking in an ashtray when I was done.

It all got me thinking – what motivates someone to not litter? Obviously, it is often easier to just deposit
your trash out the window of your car or drop it on the sidewalk – so what makes someone motivated
to go to the little extra effort to dispose of trash in a more proper form. I think that most of it comes
down to the “D Drive” (that is the Drive to Define and Defend). I’ve written about this before (link here)
but here is a quick refresher. The Drive to Define and Defend is about how we defend those things that
are important to us when they are in danger – our family, our business, our neighborhood. It is also
about how we define ourselves (i.e., what type of person am I) – thus, I am motivated to do behaviors
that are consistent with my personal view of myself or that match the tribe or organization I live in. Our
motivation to not litter then is based on if we believe that our neighborhoods are in danger of being
overrun by trash (not literally overrun, although after my Saturday morning experience, who knows…).
Do we look at leaving a candy wrapper or a cigarette butt on the street as not respecting our
neighborhood or our world? Think about the “Don’t Mess With Texas” slogan – did you know that was
done originally to reduce litter on the Texas highway system? And it worked – because it helped define
the problem for people and also activated their Drive to Defend. It was a great campaign that made
people realize that to feel proud about Texas, they needed to ensure that they didn’t “mess with it” by
littering. Even the terminology is ripe with defensiveness.

Now if only we could create a “Don’t Mess With Minneapolis” campaign!

While I’m dismayed at the present moment, I’m hopeful that with the revitalization of our
neighborhood, that the litter will decrease. People will feel more pride in living here and take more care
of our streets and sidewalks. That they will feel the pride necessary to defend the neighborhood from
trash and cigarette butts. So please don’t mess with Minneapolis – keep your Butts in the car!

Kurt
Let’s Get Sales incentives Right

Salespeople who are engaged in their roles, who are motivated to succeed, and who's goals are aligned
with the organizational goals have been shown to have a significant impact on helping an organization
succeed (Badovick, Hadaway, & Kaminski, 1992). Successful organizations understand this and try to
keep their sales employees motivated and engaged through a variety of motivational methods - mostly
involving extrinsic rewards. While much has been much written about how extrinsic rewards may have a
detrimental effect of on a sales person’s intrinsic motivation (Deci & Ryan, Kohn, or Pink) there is little
disagreement on the short-term impact that extrinsic rewards can have on a company’s performance.
The short-term benefit of extrinsic rewards assures us that these rewards will be used in businesses no
matter what Alfie Kohn or Dan Pink has to say on the topic.

It is important then that we get sales incentives right. We need to ensure that as leaders, we are not
limited in our thinking about how we can structure sales incentives and how they operate. We must
look at optimizing how our incentive plans are designed, the type of reward that is offered, and how
goals are set.

Extrinsic Reward Program Structure

There is a very clear framework, based on the research that suggests that extrinsic reward programs
should be designed such that the rewards are contingent on achieving increasing performance goals. By
doing this, companies not only limit the negative impact that extrinsic rewards can have an intrinsic
motivation, they also increase the actual performance that extrinsic rewards drive. This means that the
use of non-contingent incentive rewards should be limited. It means that incentive plans that are strictly
“do this – get that” are not optimal. Contests that rank people against one another also are not optimal
as they only provide feedback that the sales person did better than the others – not a

Extrinsic Reward Type

The typical reward for performance is usually cash. When surveyed, over 70% of sales people indicate
that they would prefer cash. However, there have been studies that show non-cash rewards (i.e., trips,
merchandise) have a bigger impact on performance than cash alone. This does not mean that one
would replace their annual sales incentive programs cash bonus with rewards of trips and tv’s – but it
does mean there should probably be a mix. It should also be noted, that sometimes extrinsic rewards
are based on fulfilling the drive for Achievement and as such, do not require significant outlays of dollars
– recognition of performance by senior leaders can be a significant motivator for sales people.

Goal Setting

A majority of sales incentive plans have goals that are provided to individuals. Goals are good – they
have been shown to increase performance across a myriad of environments (see Locke and Lathum).
However, we’ve seen significant backlash against goals when they are not understood or felt to be so
out of reach as to be laughable. The negative impact of this can outweigh any positive motivation that
you get from the incentives. Goals must be understood and bought into (i.e., perceived as fair) to be
effective. There are a number of ways that companies can do this, but they often require changing
systems and processes that have been in place for years. The key is to get the setting of individual sales
goals to be as close to the sales representatives as possible, while still ensuring that they align with the
company sales objectives. The science (or art) of this can be very daunting – but trust me, I’ve seen it
done. One simple way to help is to provide a means for front-level managers to effectively shift quota
from one territory to another but provide mechanisms to ensure fairness.

Sales Motivation using the Four Drive Model

Salespeople who are engaged in their roles, who are motivated to succeed, and who's goals are aligned
with the organizational goals have been shown to have a significant impact on helping an organization
succeed (Badovick, Hadaway, & Kaminski, 1992). Successful organizations understand this and try to
keep their sales employees motivated and engaged through a variety of motivational methods - mostly
involving extrinsic rewards. While much has been much written about how extrinsic rewards may have a
detrimental effect of on a sales person’s intrinsic motivation (Deci & Ryan, Kohn, or Pink) there is little
disagreement on the short-term impact that extrinsic rewards can have on a company’s performance.
The short-term benefit of extrinsic rewards assures us that these rewards will be used in businesses no
matter what Dan Pink has to say on the topic.

Successful organizations and leaders of the future not only need to focus on the optimization of extrinsic
reward programs but also on moving other levers within the organization that can drive sales
motivation. Using the Four-Drive Model of Employee Motivation (Lawrence and Nohria, 2002) provides
a clear framework for how to do this.

First, the Drive to Acquire or Achieve must be met. Thus, not only do the extrinsic incentive programs
need to be optimized, but other forms of Achievement need to be focused on as well. Therefore, the
way that outstanding performance is recognized, the type of perks that are provided, the career path
that is provided must be looked at in terms of their overall motivational value. The standard “pay them
more and get more performance” mantra doesn’t apply – it means that sometimes a written letter of
appreciation generates more motivation than a thousand dollar check (see ).

The Drive to Bond and Belong is also key to driving motivation. Leaders need to understand that sales
representatives thrive on building relationships – both inside the company and with their clients.
However, systems, processes and rules that are put in place have a way of getting in the way of this.
Today’s clients often don’t allow for your sales people to take them out on the golf course or to a fancy
dinner. Sales representatives often work out of their home office with little interaction with other
employees. Successful leaders will look for new and unique opportunities for their sales people to
interact and form social connections. Social media is a new tool that holds a huge potential for building
these relationships (see ).

The Drive to Comprehend or be Challenged motivates many sales representatives to higher

performance. For years it has been known that setting stretch goals can greatly impact sales
performance. The focus that new leaders will

The impact that this insight can have on the bottom line for an organization is significant.

More Pay ≠ More Motivation

How do you increase employee motivation? For many companies, it appears that they think it is
done by just changing their reward systems. In their worldview, “more money equals more
motivation.” I had one Regional Sales Manager tell me in an interview, “…if I could just get
more dollars down to my reps, they would be fully motivated.” It often seems that companies
view their pay plans as the only lever they have to use to impact employee motivation. This
simply isn’t true.

Dan Pink, in the TED presentation he gave in July of 2009 (see post below), highlights some of
the fallacies that focusing only on the pay plan can have. I agree with a lot of what he says. We
know that pay is a vital part of a comprehensive motivational strategy but that there is more to
motivation than just pay. Using the four-drive model we understand that there are other levers
that can be used to improve performance. Companies need to expand their thinking and look at
how they are creating cultures that improve employee’s ability to bond with their co-workers,
managers and customers. Leader’s need to structure work so that employees are challenged and
that they have an opportunity to learn and grow. Organizations cultures need to be enhanced so
that workers feel like they belong to something worth defending.

However, we must also think about pay. The drive to acquire is a strong motivational force. I
don’t know of many people that would do their jobs for free (however, I’m sure there are a few
out there). I also know that most people would consider leaving a job they loved if they were
offered enough money to go to a different job. That being said, more money in and by itself is
not enough to drive significantly more motivation in the long run. Pay needs to be structured so
that it is fair, it provides guidance around what the organization values (i.e., incentive pay
focused on revenue is very different than one focused on market share), provide feedback to the
individual about their performance, and allow the opportunity to satisfy the drive to acquire.
Much of Dan Pinks presentation (I’m anxiously waiting for his book) points to the negative
aspects that incentives can have on creativity and intrinsic motivation. This is true. The
alternative can also be true. Work by Eisenberger and Rhoades (2001) concluded that "how" the
extrinsic reward is perceived by the participants has a significant impact on the effect it has on
motivation. They found that when extrinsic rewards are designed to reward improvement or
quality aspects of their work, their creativity improved. The important part then is not that
incentive pay (or pay in general) is bad, but how it is structured and perceived needs to be well
thought out to ensure that you are driving the right behaviors.

Kurt

Companies get Motivation Wrong

I’ve had the wonderful opportunity to work with a number of companies on their incentive plans
and sales awards programs. While a few of these companies understand how to motivate, many
of them just get it wrong. Here is a short list that describes just a few of the more common
mistakes that I’ve seen:

1. Focus solely on the pay plan (i.e., incentive plan, bonus, base pay). We know that employees
are motivated by more than just a paycheck. Companies that do motivation right have a
comprehensive plan that emphasizes more than just pay, but also teamwork, job environment,
flexibility, work/life balance, opportunity for growth, new challenges, commitment to ideals, the
corporate identity and a broader purpose for being there.

2. Making incentives too complex. This is typically the result of companies trying to make their
incentives fair, however, if employees can’t understand their IC plan, I promise you it won’t
motivate them.

3. Reward the wrong measures. Companies often reward employees for behaviors or results
that don’t match the long-term strategy of the organization. In one company I worked with, all of
the sales awards focused solely on revenue (because that’s what they could measure). When I
talked to sales management, they needed sales people to focus on margin and conversion of
competitor business. Obviously, the behavior that was being driven by the Sales Awards did not
align with sales managements needs.
4. Focusing on the “cost” of the program, and not on the results. I’ve seen way too many
companies focus on the cost of an incentive or sales program when they really needed to be
looking at the impact it has. The cheapest solution is not always the best (not always the worst
either, but the focus should be on the impact it has and the lift it can bring).
Intrinsic versus Extrinsic – the wrong discussion

There has been a significant amount of research on the merits of intrinsic versus extrinsic motivation
(see Eisenberger, Deci, Ryan, Locke, Latham, etc…).

Both sides of the controversy claim that their favored motivational drive is best. In my opinion, they are
both barking up the wrong tree. It has been shown empirically (insert citation) that both types of
motivation drive behavior. In the real world, both types of motivations are utilized in almost all work
situations. The real discussion should be on how do you leverage both to get behavior change.

Take a minute to say thank you the “write” way

I received a hand written thank you note for a project I did a few months ago. It was not only a pleasant
surprise, but one that has maintained some impact after several months. I’m of the age that when I first
started in work, we used to give recognition through hand written cards and notes on a regular (ok,
maybe not so regular) basis. With the advent of e-mail and electronic forms of communication, the
hand written thank you has gone the way of the pay phone – not quite dead, but pretty close.

There is something very special about a letter or note or thank you that is written by hand. It has a lot
of stickiness in today’s electronic world - it stands out from the crowd. It also provides a sense of real
appreciation – one that has taken a little bit of extra effort to do.

We did work with a large med device company this spring in which we interviewed a number of their
sales people. These people were very highly compensated, had significant incentive earning
opportunities, and fantastic recognition programs (valued at $10,000s of dollars). What struck me, was
the impact that one VP of Sales had by writing hand written letters of appreciation to his top
performers. One sales person went so far as to frame the letter and had it hanging in his office (note –
he did not have the plaques or other awards that he earned up in his office). These letters had a greater
recognition value and motivational impact than some programs that cost millions of dollars to the
company.

So please excuse me, I’m going to go write a few thank you’s by hand.

Favorite Motivational Quotes

I like quotes, but often feel like they get misused. Quotes in and of themselves do not help create a
motivational workplace. I’ve been in many offices where they have the “Successories” posters hanging
all around, and the motivation level is putrid. I’ve seen managers pull out quotes to describe any
situation or provide a witty response to an employee need. Too often, I feel that quotes are a simple
way out of thinking too hard oneself.
Quotes are best used, in my opinion, for three purposes: first, when they have an intrinsic connection to
the individual and provide them with insight, reflection, or a reminder of something that is important to
them; second, when they can say something better than we can to expound on an idea, a concept or an
attitude; and third, when the words take on a different significance because of the original author.

That being said, here are just a few of my favorite motivational quotes and why.

“Never think you know” – author unknown.

This was written in a tunnel on the campus of the University of Iowa when I was a freshman there. I
copied it down on a ruled sheet of paper and had it posted to my bulletin board for years. To me it was
a way of challenging the presumptions that we all have. It touched a part of what drives me – the drive
to comprehend, to understand, to know and not just presume. In my head, I typically said, “know you
know” after reading it. Go ahead, try it.

“Become the change you want to see in the world” – Mahatma Gandhi

This quote is one that is often overused but I like it for the story behind it and the simple, clear message
it provides. Supposedly, Gandhi was approached by a woman and her son. The son was overweight.
The woman pleaded with Gandhi to tell her son to stop eating sweats, to which Gandhi answered, “I
cannot. Come back in a month.” The woman brought back her son in a month and this time Gandhi told
him to stop eating sweats. He himself had given them up – therefore he had “become the change” that
was needed.

“The important thing is to not stop questioning.” - Albert Einstein

This quote has an intrinsic appeal to me, particularly coming from the likes of one of the greatest
scientists of all time. It gets at a point that I feel is important. It reminds me to keep pushing the
boundaries and never stop asking the question “why?”

Please let me know some of your favorite quotes and more importantly why…

Bonding as Motivation

Many people think that team building is really a waste of time and that there is no real legitimate
purpose for it.
Do you really know what makes you tick? OR You think you know what motivates you – but you
really don’t

We believe we know what gets us up in the morning and rearing to go – don’t we? If someone asked
you what motivates you, you would be able to tell them – right? Our ability to reflect on our own
motivations is a belief that we all think we do well. I would argue that we are fooling ourselves and we
really aren’t as good as it as we think.

Case in point, research has continually shown that when asked what type of reward employees think
would be most motivating or that they would most want, they choose “cash.” Our own research shows
that when asked, 70% to 80% of employees typically listed cash as the top reward. However, when you
actually look at studies that show performance lift, non-cash awards have a greater impact. Dan Ariely,
the author of Predictably Irrational recently blogged about this (See
http://www.predictablyirrational.com). He cites an experiment done with Goodyear Tire company in
which non-cash rewards improved performance more than double what the cash rewards did. In fact,
there are numerous studies that support this idea.

So how can it be that if asked most people would state they prefer cash incentives but perform better
when offered non-cash incentives? Part of the reason is because we don’t really understand what drives
us? Cash is easy. We understand it. Economists point out that cash has “utility” – in other words it can
be used to purchase any number of items that we desire. Non-cash is not so simple. We might not like
the choices we have or feel limited by the selection. So what gives?

Dr. Scott Jeffrey’s has done much work on understanding this phenomena (see
http://www.incentivecentral.org/awards/whitepapers/benefits_of_tangible_non_monetary_incentives.
1830.html). Much of it comes down to how we evaluate, separate, justify and are socially reinforced.
In other words, we evaluate the value of cash and non-cash differently resulting in a higher value placed
on non-cash elements do to affective factors (we can visualize ourselves with a new 56” TV and that
gives us a good feeling – this is one step removed with cash). We also tend to lump cash bonuses in with
our paycheck and it isn’t seen a separate, special reward. We have to justify spending our cash awards
on luxury items such as the above mentioned TV instead of paying down the mortgage – not so when
we are only offered luxury items. And finally we tend to not talk about the cash we earn to our peers
and friends – but we do tend to talk about that new TV (or trip to Hawaii, or new Golf Clubs, etc…) and
are socially reinforced by the bragging rights of those conversations.

So back to the initial question of understanding our motivations – we can see that there is much more to
the story than asking people what motivates them. The fact is we don’t always consciously know what
motivates us (think Freud). So while asking your employees what they want is a good first step, make
sure it isn’t your only step. You need to dig a little deeper to get at their underlying drives.

Kurt Nelson
 Intrinsic and Extrinsic Motivation Theory

Organizations use a number of different practices to try to motivate their workforce to perform
the duties and activities required for organizational success. How these different motivational practices
impact worker motivation and thus performance has a significant impact on a company's success
(Franken, 2002). Those organizations that can enhance their motivational practices and increase worker
performance should outperform organizations that do not. The motivational impact on sales
performance is of particular concern for organizations because (a) sales is often the key driver of
revenue for the company, (b) sales often acts as the main customer liaison and representative of the
company, and (c) sales organizations have typically used a wide variety of motivational practices (i.e.,
base pay, commission, incentive pay, bonus, recognition) to drive sales performance (Churchill, Ford, &
Walker, 1985; Franken, 2002).

Much of the research on motivational theory in recent years has focused on determining the
interrelationship of intrinsic and extrinsic motivation and how they influence each other. One of the key
areas of research in this field is how earning extrinsic rewards for an activity impacts one's intrinsic
motivation to do that activity. Seminal work by Deci (1972a) suggests that the use of extrinsic motivation
on interesting tasks decreases an individual's intrinsic motivation for that same task in subsequent trials
- where intrinsic motivation is operationalized by measuring the amount of free time spent on that task
in an unstructured environment. However, subsequent research showed mixed results on this effect.
Currently there is much debate in the field as to whether extrinsic reward is detrimental to intrinsic
motivation, has a neutral effect, or can increase intrinsic motivation. This paper will explore the two
major streams of research regarding this extrinsic–intrinsic effect, analyze the relative merits of both,
and evaluate the validity and application of both to the field of sales motivation.

Intrinsic Motivation

Intrinsic motivation is defined as engaging in a task for its own sake without any apparent
reward except for doing the activity itself (Brehm, Kassin, & Fein, 2005; Deci, 1972a). This definition
takes some of its form from other concepts of motivation in the literature. Maslow's (1943) ideas of self-
actualization would be categorized as an intrinsic form of motivation. Carl Rogers (cited in Franken,
2002) discussed how individuals strive for a feeling of positive regard that comes from their activities.
McClelland's (1961) concept that people strive for achievement and have an internal desire for success
is also related to this definition of intrinsic motivation. Additionally, there are a number of biological
theories of motivation that look at how individuals biologically derive pleasure from different tasks that
are seen as exciting or challenging (Carlson, 2004). In a work environment this type of motivation is seen
as helping drive quality, performance, creativity, and dedication to the job (Wiersma, 1992).

It is important to understand the ways in which intrinsic motivation has been operationalized in
order to gain a better perspective on some of the differences in results and subsequent interpretation of
those results. Deci's (1972a) original research operationalized intrinsic motivation by measuring the
amount of free-time that a person spends on an interesting task. A typical research experiment using
this type of operationalization had people work on an interesting task (e.g., putting together a puzzle,
drawing, playing games) where one group is given an extrinsic reward for the doing the task while the
control group is not. The real experiment begins after the initial portion is completed and the
participants are led to believe that they are done but that the researcher needs to get some forms or
finish some calculations before the participants can leave. The participants are then left alone and the
amount of time that they spend on their own working on the task compared to other activities is
measured through a non-obtrusive means (i.e., one-way mirror). People who work on the task during
this time are thought to be intrinsically motivated. This free-time task work is compared for the groups
who were given the extrinsic reward to those that were not given the extrinsic reward. This method of
operationalizing intrinsic reward measures one's free-choice options and is an observable, quantifiable
measure.

Others have operationalized intrinsic motivation through the use of various task measures of
performance (Wiersma, 1992). This type of experiment seeks to elicit intrinsic motivation through
having participants engage in an interesting task and then measure their performance on that task (e.g.,
how many puzzles are completed, the time it took to complete a puzzle, or the quality of the work done)
when an external reward is introduced and compared to the free time performance. This method allows
for a quantifiable measure but it is harder to factor out the impact of the extrinsic reward effect from an
increase in intrinsic motivation (Deci, Koestner, & Ryan, 1999).

Another way of operationalizing intrinsic motivation is to ask people how they feel about doing
the activity itself, their task enjoyment (i.e., the attitude they have regarding the activity) or asking them
the likelihood of them doing the activity again for no extrinsic reward. This self-report attitudinal
approach to measuring intrinsic motivation is often used in conjunction with other types of measures
(Cameron & Pierce, 1994).

Extrinsic Motivation

Extrinsic motivation is attributed to an outside source and is defined as engaging in activity

because one is influenced by an external variable such as a reward or punishment (Brehm, Kassin, &
Fein, 2005; Cameron & Pierce, 1994). Extrinsic motivation has been shown to have a significant impact
on behavior. Numerous studies by behaviorists have shown that reinforcing a behavior by introducing
an extrinsic reward following that behavior can lead to an increase in that behavior when the reward is
present. Behaviorism and reinforcement theory is all about the use of extrinsic rewards to modify and
condition behavior (Franken, 2002).

One aspect of extrinsic reward is that while many behaviors seem to occur without the use of an
immediate extrinsic motivator, the behavior might indeed still be motivated by the perception that
there will be a future reward for the activity (Bandura, 1997). Thus a person might be doing an activity
that on the surface appears to be intrinsically motivated but in fact is motivated by the ideas that doing
the activity will be rewarded later (i.e., working late without pay but hoping that will help get a
promotion).
 Businesses use extrinsic reward all of the time to try to increase employee motivation and
performance. At the most basic level a sales person's salary is a form of extrinsic reward – they are being
rewarded for the work that they do. In addition, there are a number of other extrinsic reward vehicles
that organizations use to try to influence behavior and motivation, some of these include: (a) incentive
or variable pay (including performance bonuses and commissions), (b) non-cash tangible rewards (such
as trips and merchandise), (c) stock options, (d) recognition (both verbal and tangible), (e) benefits
(health insurance, vacation, pensions, and other services) and (f) symbolic rewards (i.e., title, office)
(Brehm, Kassin, & Fein, 2005; Franken, 2002).

The Debate on Extrinsic Rewards Effect on Intrinsic Motivation

The extrinsic-intrinsic debate is centered on Deci's et al. (1999) claim that, "in general, tangible
rewards had a significant negative effect on intrinsic motivation for interesting tasks" (p. 653)and
Eisenberger and Cameron's (1996) belief that "the detrimental effects of reward are greatly restricted in
kind as well as durability" (p. 1163). Understanding the validity of both lines of research is an important
aspect for sales organizations as they tend to use extrinsic rewards (e.g., commissions, bonuses, non-
cash incentives) to try to motivate higher performance by their sales personnel. If extrinsic reward has a
general negative impact on intrinsic motivation, the long-term effects of the use of these rewards might
be detrimental to the overall performance of the organization. Indeed, some researchers have argued
that all forms of incentive pay should be removed from organizations or limited in its use to reduce this
detrimental effect on intrinsic motivation (Kohn, 1993a). If on the other hand, extrinsic rewards have a
neutral effect or even a positive effect based on their design, then it is vital for organizations to utilize
this information to design the appropriate structure for rewarding their sales people.

Deci's (1972a) early experiments found that individuals who were paid to do an interesting
activity spent less time with the activity in the non-reward time than the non-paid control group did –
albeit with the significance value of p < .10 for difference between the control and paid group. This
experiment and others explored the impact of an expected reward for the completion of a task. Other
studies (see Deci, 1972b; Lepper, Greene, & Nisbett, 1973; Smith & Pittman, 1978) replicated this
decrease in intrinsic motivation as measured by free-time activity after extrinsic rewards were given.
However, some of the early research also found extrinsic reward had little or no impact on intrinsic
motivation (Rummel & Feinberg, 1988).

This is only one structure in which extrinsic rewards can be given there are a number of other
reward contingencies that have been studied with varying results. Deci et al. (1999) discuss the following
typology to describe the various extrinsic reward contingencies: (a) task-noncontingent rewards which
are given for simply participating, (b) completion-contingent rewards which are structured like the
experiment described above with the reward being contingent on completing the activity, (c)
engagement-contingent rewards in which the reward is provided when one is engaged in the activity
and (d) performance-contingent or quality contingent rewards which are given only when one meets a
set standard of performance (e.g., completing a certain number of puzzles in a set time frame).
 Each of these structures has been explored in the research to discern how they affect intrinsic
motivation. This research has been mixed, however, the detrimental effect on intrinsic motivation is
more likely and stronger in experiments that focused on completion-contingent rewards (Deci, 1972a;
Lepper et al., 1973; Lepper & Greene, 1975; Rummel & Feinberg, 1988). This has been labeled the
overjustification effect which suggests that the person attributes the reason that they are doing the
activity to the external reward instead of their internal motivation (Lepper et al., 1973). However, when
the activity is task-contingent and to some degree engagement-contingent, the detrimental effect on
intrinsic motivation is not as apparent (Cameron & Pierce, 1994; Wiersma, 1992). And findings have
been very mixed in performance-contingent structures with some finding that they typically decrease
intrinsic motivation (Deci et al., 1999; Deci & Ryan, 1985) and others finding that they can actually
increase intrinsic motivation (Eisenberger & Cameron, 1996; Eisenberger, Rhoades, & Cameron, 1999;
Wiersma, 1992). In a significant study conducted by Pierce, Cameron, Banko, and So (2003) they found
that intrinsic motivation for a task increased (as measured by time spent on the task in a non-reward
setting) when the reward for the task was awarded only when participants met increasingly strict
contingent-based performance standards over time (e.g., for this study, they had three trials to put
together a number of puzzles – a reward was earned in the first trial by completing one puzzle, in the
second trial for completing three puzzles, and in the third trial for completing five puzzles).

Cognitive Evaluation Theory Merits

Deci and Ryan (1985) attempt to explain extrinsic rewards influence on intrinsic motivation
through their development of cognitive evaluation theory and the concept of self-determination.
Cognitive evaluation theory (CET) theorizes that an individual's perceived feeling of autonomy and
competence are determinants of that individual's level of intrinsic motivation. Rewards can be
interpreted either as controlling or as recognition of competence. If rewards are seen as controlling they
tend to decrease one's sense of autonomy and the locus of control is perceived to be outside of self and
the behavior is attributed to the extrinsic reward (i.e., "I only did that because I was paid to"). The
outside locus of control reduces the perception of autonomy and thus decreases the likelihood that they
will do that same activity again without a reward. In contrast, if a reward is seen as contributing to one's
sense of competence, then the extrinsic reward increases an individual's sense of competence and
intrinsic motivation is increased. In other words, if being paid creates a sense of accomplishment and
recognition then self esteem is increased and thus increases the likelihood of the activity being
repeated.

CET states that rewards often create both a controlling and a competency effect. That this has a
conflicting affect on intrinsic motivation and depends on the strength of each effect to determine if the
extrinsic reward will have detrimental or positive effect on intrinsic motivation. Much of this strength
revolves around the "interpersonal context" of the reward which can impact the reward recipient's
perception of control (Deci & Ryan, 1985). This interpersonal context refers to the personal and social
aspects of where and how the reward is received – and to what extent they factor into the individual's
locus of control over the behavior associated with the reward. When the interpersonal style or setting of
administrating performance-contingent rewards is perceived as pressuring, they predict that rewards
will be experienced as more controlling and therefore lead to diminished intrinsic motivation.
 The implication is that the more controlling the reward is perceived to be, the larger the
decrease in intrinsic motivation. More controlling rewards lead to a perceived causality that is outside of
the individual and therefore undermining the future likelihood that the behavior will be repeated.
However they also postulate that rewards can provide information on competence and that this
information is seen to enhance intrinsic motivation (Deci et al., 1999). CET postulates that different
reward contingencies are perceived differently in terms of control and information. Task-noncontingent
rewards which require someone just to show up and not even do the task should have little or no effect
on one's sense of control or competence, thus it should have little or no effect on intrinsic motivation.
Engagement-contingent rewards, those that require at least a modicum of engagement in the task, are
more likely to be perceived as controlling without any competency information, and therefore would be
more likely to reduce intrinsic motivation. Completion-contingent rewards are given when the task is
completed, but there is no quality control, thus it doesn't matter how well one did on the task, just that
it is done. This type of reward offers little in competency information that would offset the controlling
nature of this type of reward. The prediction is that the controlling aspect would significantly outweigh
the competency aspect thus decreasing one's sense of autonomy and therefore detrimental to one's
intrinsic motivation. According to CET theory, performance-contingent rewards are the most complex
and thought to be perceived as the most controlling as individuals have to meet specific requirements
for the reward to be given however they are also thought to convey the most information on
competency. The competing influence on one's intrinsic motivation is influenced by the salience of both
the control and the competency information for the individual. Thus CET predicts in this reward
contingency that the intrinsic motivation outcome could be negative, neutral or positive.

In general CET postulates that rewards are seen by "recipients primarily as controllers of their
behavior" (Deci et al., 1999, p. 628) and thus would have a detrimental effect on their intrinsic
motivation. The implication is that extrinsic rewards, in most instances, will have a negative effect on
intrinsic motivation and only in very limited instances, when the competence or informational value of
the reward is greater than the control factor of the reward, will the extrinsic reward have any positive
effects on intrinsic motivation.

Alternative View Merits

A number of researchers have come to a different conclusion regarding the effect of extrinsic
reward on intrinsic motivation. The main points of view for this are expressed by Eisenberger and
Cameron (1996) in which they state that "detrimental effects of reward occur under highly restricted,
easily avoidable conditions" (p. 1154). While they agree with CET that if a reward is expected and given
after the task for just completing the task the typical response is a decrease in free-choice activity for
that task, they also note that this is the only structure that consistently has a detrimental effect.
Cameron and Pierce (1994) note that of the 61 studies that they reviewed 34 showed a decrease in free-
choice task engagement, 22 showed an increase, one had no effect, and four did not calculate the
results. On the other hand, the effect of performance-contingent rewards often has a neutral or even
positive effect on intrinsic motivation. The implied element is that performance-contingent rewards
provide more competency information than what CET accounts for – particularly if they are designed
appropriately to enhance this affect.
 Wiersma (1992) noted that the manner in which intrinsic motivation has been operationalized
also has a significant effect on this outcome. He notes that most of the detrimental effect findings are
based on free-choice measures while if one looks at the findings on attitudinal or performance
measures, the findings are more favorable to a neutral or positive extrinsic reward effect. Again,
Cameron and Pierce (1994) found in a review of 64 studies, 31 had a positive impact on attitude toward
the task while only 15 had a negative impact, one was neutral, and 17 didn't have enough information to
determine. The value of this concept is in understanding that the manner in which intrinsic motivation is
measured impacts the effect that an extrinsic reward has on that intrinsic motivation. It is similar to
trying to determine the effort runners exert by measuring how much liquid they drink during a race -
however that amount would be different if they were drinking water as opposed to a performance
drink; thus determining effort based on just the amount of liquid would not provide any relevant
information.

Eisenberger and Cameron (1996) indicate that if the reward contingency is based on a quality-
dependent rating (i.e., the work had to meet a certain standard before getting the reward) as opposed
to just task-dependent (i.e., getting a reward for just doing the task) there was an increase in expressed
interest in the task. Thus, the structure of how the award is given influences the impact that it has on
intrinsic motivation. They postulate that because the extrinsic reward is received only after increased
quality, that individuals have an increased feeling of self-esteem and a gain in self-efficacy. Thus
individuals actually feel more in control since it is their effort that correlates to whether they receive a
reward or not. Bandura's (1997) theory of self-efficacy is in alignment with this rationale and offers an
alternative construct to the CET position.

In addition, Eisenberger and Rhoades (2001) concluded that "how" the extrinsic reward is
perceived by the participants has a significant impact on the effect it has on motivation. If the reward is
received where there was a prior positive relationship between the reward and the activity, then the
reward would not decrease the intrinsic motivation and should be perceived as increasing self-
determination. Learned industriousness theory (Eisenberger, 1992) indicates that activities that involve
a learning component can be strengthened with the addition of a reward mechanism for increased
performance success. The theory suggests that one's the expectancy of a reward for a particular level or
type of performance can actually enhance motivation. This effect is thought to occur even when the task
itself provides no information regarding competency as people generalize from their past experiences in
similar tasks. For instance, if following APA format quality is rewarded in one paper there will be an
increase in that behavior in subsequent papers, even when there is no reward offered for achieving this
standard in the subsequent papers.

Overall evaluation

The main issue in this debate focuses around the general impact that extrinsic reward has on
intrinsic motivation. Both sides of the debate admit that in certain circumstances extrinsic rewards can
either have a detrimental or positive impact on intrinsic motivation. A key element in this debate is on
how intrinsic motivation is operationalized. If one looks at it as only being measured by free-choice
engagement, then the evidence is slightly more positive for CET. However, if one operationalizes
intrinsic motivation as including more qualitative measures such as self-report attitudes and outcome
performance, then CET might not have the same level of support in the literature.

Interestingly, much of the focus on both sides of the argument has used meta-analysis to
provide evidence for their viewpoint. Both sides of the debate can point to various meta-analysis that
support their positions (see Cameron & Pierce, 1994; Deci et al., 1999; Eisenberger & Cameron, 1996;
Wiersma, 1992). This reliance on meta-analysis can lead to issues as pointed out by Lepper, Henderlong,
and Gingras (1999) in that the analysis can result in different results based on the studies included, how
singularities are handled, how results are collapsed across opposed effects, and effect size. Thus the
quantitative nature of the meta-analysis can be subjectively impacted by how these variances are
handled. Again, one of the key elements is in the operationalization of intrinsic motivation. As always
the research should be subject to a critical review.

Application to Sales Organizations

The implications from these findings are significant for sales organizations but vary greatly based
on which side of the debate one leans towards. If one tends to lean towards CET and believe that in
general extrinsic rewards are a detriment to intrinsic reward then one would logically reduce the
amount of extrinsic rewards utilized for intrinsically rewarding activities. Indeed, Kohn (1993b) states,
"any incentive or pay-for-performance system tends to make people less enthusiastic about their work
and therefore less likely to approach it with a commitment to excellence" (p. 62). The belief is that the
best way to remunerate for the job is to pay a fair base salary that would act, to a certain degree, as a
task-noncontingent reward and not impact intrinsic motivation, thus leading to increased quality and
commitment.

This concept however presupposes that all sales activities are all intrinsically rewarding – which
is a large assumption to make. Indeed the use of extrinsic rewards by organizations is often to motivate
individuals to undertake those tasks that are required but are not well liked or pleasurable (Eisenberger,
Rhoades, & Cameron, 1999). It is also difficult to generalize across all salespeople as various personality
factors play into what one deems to be intrinsically motivating (i.e., one salesperson might be
intrinsically motivated to do analysis on competitive products while another might find that laborious).
This leads to difficulties with this approach.

Additionally, the short-term benefit of contingent extrinsic rewards on increasing performance

has been shown to be very effective across a number of studies both in the laboratory and in the field
(Churchill et al., 1985; Hiam, 1999). Stajkovic and Luthans' (2003) meta-analysis of 72 contingent based
behavior programs found that money incentives increased performance by 23%, social recognition
increased performance by 17%, and feedback increased performance by 10%. This short-term impact on
performance is often vital for a company's success and is used as a management tool to stay
competitive. Understanding that extrinsic rewards are going to be utilized in organizations then the
opportunity is to maximize their effectiveness and limit their detriment.

This perspective is more in agreement with the alternative to the CET view that believes that
extrinsic rewards, if structured correctly, can lead to an increase in intrinsic motivation. The
recommended structure would be one in which rewards are given in a performance-contingent basis so
that sales people need to meet certain performance goals before receiving a reward. This is typical of
many of the sales incentive plans that are utilized by organizations today.

Conclusion

Salespeople who are engaged in their roles, are motivated to succeed, and who's goals
are aligned with the organizational goals have been shown to help an organization succeed (Badovick,
Hadaway, & Kaminski, 1992). Successful organizations understand this and try to keep their sales
employees motivated and engaged through a variety of motivational methods mostly involving extrinsic
rewards. While the literature has conflicting information regarding this detrimental effect of extrinsic
rewards on intrinsic motivation, there is little conflict on the short-term impact that extrinsic rewards
can have. The short-term benefit of extrinsic rewards assures that they will be used in business as such
the optimization of how these rewards are implemented is a must.

Understanding the predictions of the two theories provides practioners with a very clear
framework for designing extrinsic reward programs in order to maximize their effectiveness. Based on
the research, the use of performance-contingent rewards would be preferred over other types of
reward contingencies. Providing a clear value to the rewards is also preferable so that the feedback
provided by them is clear. For instance, a sales organization would benefit from an incentive plan that
provided various levels of earnings based on a qualitative assessment of performance (e.g., sales
revenue, profit, or customer retention). Additionally, that sales organization would want to clearly
outline how the rewards are viewed as demonstrating superior performance.

The impact that this insight can have on the bottom line for an organization is significant. More
research needs to be done to obtain a more accurate picture of how various performance-contingent
rewards impact intrinsic motivation and the long-term affect they have on company performance.

Here is a problem that you can solve creatively. How would you get two people to stand face to face on
a sheet of newspaper that is placed on the floor in such a manner that they couldn't touch each other?
You can't tear or cut the paper. You cannot tie or prevent the two people from moving (Von Oech,
1990). The answer is at the end of this assignment.
We need to solve problems everyday. They are not always as tricky as the one poised above, however,
they all require a level of intelligence and creativity. Problems can be as simple as figuring out how to
get the "gunk" (a technical term) out of the crevice in the stove or developing a new easier to
understand format for presenting a training program for a group of 50 people, the next move one needs
to make in a game of chess or fixing the rattle in your car. We solve problems all of the time. We solve
these problems using creative means.

Creativity, according to Hiam (1999 p. 293) is "highly motivational." He states that creativity can be
encouraged by to do this through holding meetings using the "blue water agenda" where open-ended
questions are poised as opposed to an agenda created. In my experience, this is a great way to help
create a creative meeting. It is important however that the creativity and free flow is not stifled by
criticism or negative feedback. In addition, I have used a variety of different methods inside meetings to
spur creative thoughts and ideas. These methods include: visualizing the future through pictures (have
people work the right side of their brain), having people brainstorm ideas, then brainstorm opposite
ideas, and then opposite ideas of the opposite ideas, etc. (I know it sounds strange, but it works), blue
sky brainstorming (having no limits on budget, time or other factors), envelopes (ideas in envelopes that
get passed around and expanded upon), teaser exercises (experiential exercises that have people
expand how they think), and speed storming (coming up with as many ideas in a short time as possible).

Workplaces that foster creativity, in my belief, are ones that encourage and recognize failure from
taking risks. What I mean by this is that people are not punished for trying something new and failing at
it. This type of culture encourages people to think creatively and expand how they think. I conduct an
experiential exercise called the electronic maze that highlights this point in some of the workshops I do.
In the exercise, teams need to find their way across a 9 x 6 carpet that looks like a checker board and is
covered with 54 squares. Some of the squares beep when stepped on, while others don't. The
objective of the event is to find the way across the "maze" via the non-beeping path. There are a lot of
other rules and restrictions. One of the reactions that is common in this event is that people get
disappointed when someone steps on a beeping square. This disappointment creates an atmosphere
that causes many people to be hesitant when they are on the maze. In essence, stepping on a beeping
square is just gaining more information about the maze but people see it as a failure and react as stated
above. We debrief this aspect and point out that their hesitation on the maze is unnecessary and
detrimental to the overall objective. The difference is in how people view the beep; if they view it as a
failure it becomes a negative restricting action, if they view it as one more piece of the puzzle, then it
becomes a reason to celebrate.

Another way is to develop creativity is to give employees free reign and encourage them to develop
their own ideas. One of the best examples of this is 3M who allows all of its employees to spend 15% of
their time and using it's equipment to work on ideas of their own. Many great breakthroughs (Post-it
Notes®, reflective spray coating) have been developed through this process.

Paper on floor answer: put the paper under a door so that half of the paper is on one side and half is on
the other side. Close the door and have the two people stand on the paper on opposite sides of the
door (Von Oech, 1990).