Tuesday, 1 March 2011
Monetary rewards - a recipe for success ... or failure ?
Are monetary rewards the passport to 'success' or a recipe for 'failure' ... should a company incentivize its people to innovate?
This great 10 minute clip does a fantastic job at answering the above questions ...
The clip successfully highlights the fundamental flaws in traditional enterprises and economies, as well as the fallacy of "incentivizing" people using monetary reward too* ...
It also goes on to explain what really motivates people ... nb the idea that money is not a motivator is well known and has been for some time (well over half a century in fact) ... as Maslow, Herzberg, Deming (and myself) have all pointed out!
So why is it not prevalent in enterprises and communities all around the world today?
Is it down to ignorance? ... well partly, for instance most mainstream business schools are still teaching flawed and outdated practices!
Is it down to apathy? ... well partly, given many of those who know better chose not to do anything about it.
Whilst ignorance and apathy are partly to blame, IMHO the main reason for it is that those currently in power (and who apply Poweromics) like to use monetary reward as a way to 'control people' and to get them to do what they want them to do (whether it's best for customers/company/country or not). Politicians/bankers also deliberately use debt to control people and create compliance too (see 'debt slavery')!
So it's not hard to see why it's not prevalent yet ... it's because those abusing power like to use it to control people for their own personal gain ... despite the fact that it destroys motivation, the performance of enterprise and the long term success of the country.
* NB the City's drive to profit from speculation and their ability to profit from the buying and selling of shares are also problematic too. For instance, city bonuses drove 'fraudulent' types of 'innovation' and the creation of 'toxic' financial 'products' (e.g. C.D.O's, C.D.S's and Self-certificated mortgages). City bankers profited heavily from gambling using these products (e.g. creating pyramid schemes using other people's money) ... and left taxpayers to pick up all the losses (resulting in massive Government debt, tax rises and cuts to public services). The City also speculates with shares and profits heavily from the process of buying and selling shares too (nb with bankers again not risking any of their own money). This speculation results in the entire share stock of most publicly traded companies being bought and sold in less than a year, and results in most executives being incentivized by substantial cash bonuses for creating short-term profit/results too (at the expense of long term sustainable success) - just like the bankers themselves!