You might think that people work hard to get something right, and once they do their efforts decrease.
In truth, people who work hard to get something right tend to keep working hard to get it even better.
For Karen Rogers, the revelation occurred as she implemented an incentive pay program at the property management firm she runs.
An off-par year for the company forced her to seek alternatives to a yearly across-the-board salary increase for her employees. She devised an incentive plan that would be based on a combination of overall profit and personal productivity.
To see what effect the incentives had, she carefully, and for the first time, charted the output of every employee before the plan was announced. “The investment in time was immense, which is the great hidden cost of incentive plans.”
When she compared productivity before and after the plan was introduced, she was somewhat surprised to see that nearly one-third of her employees did not increase their output. When she broke the results down further, it became clear that the employees who had not improved were generally the most productive to begin with.
Two years later, when Karen scrapped the incentive plan, she dug out the numbers again. Sure enough, she found a group of workers whose productivity had not meaningfully changed. And it was the same group.
Karen is quick to share what the experience taught her: “The definition of a good employee is someone who already does what you think you might need an incentive plan to get other people to do.”
Managers of production facilities who are meeting their quality targets actually invest 20 percent more time in improving their practices than mangers of facilities that are falling short of their goals. In other words, the better off work harder to get even better.
Coulthard 1998