9th February, 2017

What about financial incentives?

What?  Surely financial incentives drive performance.  It can look that way, because people focus on those financial incentives and achieve the given goals related to those targets (e.g. sell more of product A instead of product B).  It can help to retain people but it doesn’t increase overall performance by as much as the factors below.

The 11 factors

Now let's go through the eleven most important factors.  It is important to note that to get the best result is sensible to address all seven factors, because one factor that is ignored may block the others from being effective.

1. Management attention

At it's most basic level, if the manager pays attention to performance, whether positive or negative, and the employees are aware of this, it actually improves performance.  If you ignore what is happening, people wonder what the point is.

2. Set clear expectations and provide regular and specific feedback on those expectations

Expectations are important in a number of facets.  Set expectations too low and people will not strive for greatness.  Set them too high and people will give up.  Expectations need to be communicated clearly and regularly in terms of both outcomes and behavioural standards.  People need to also know whether they are achieving, exceeding or falling short of those expectations.  They also need to know how they can improve.

3. Culture

They can include the values, norms, expectations, beliefs, practices, environment and other factors in an organisation.  Many people misunderstand what culture actually is when they talk about it.  "We have a great culture!" is something to be said just because you have good banter and a great social club.  It is what happens on a daily basis and often can be difficult for those within that culture to truly observe.  However, culture is incredibly influential when it comes to performance.  We have a need to fit in with those around us (see cognitive dissonance) and so if you have a culture that values and behaves in a way that supports the goals of the organisation and performance, you are more likely to retain high performers and repel non-performers.  Conversely, if your culture supports behaviours that disregard customers, prioritise socialising over getting work done, that condones offensive comments etc. then you will get those things.

4. Alignment to the leader

People want to work for something with purpose.  They want to work for someone with purpose.  If they share the values and vision with their leader, if they respect that person and want to do well to gain their approval, then they will do so.  If they don't know much about that leader, or don't agree with what they are trying to do, or frankly don't respect them, then they will do enough just to stay out of trouble (or else leave).

5. Talent 

Otherwise known as Suitability for the Role (to an extent).  One of the biggest performance management issues is that people in a role will de-prioritise the tasks they don't enjoy and spend a lot of time and effort on other activities.  They will argue until they are blue in the face as to why they are spending their time that way.  The reality is that they are spending time on the tasks that give them energy and avoiding the ones that sap their energy or make them feel uncomfortable.  People perform the best when they are suited to a role and please - don't be fooled by a resume that shows 20 years of sales experience.  They might just be throwing good years after bad years.

6. Aptitude

It is not always the case that the smarter people get, the better they perform.  It is just that on average, people who have a higher aptitude have a better chance.  Of particular importance is inductive or deductive reasoning, which is the ability to solve problems and to learn new concepts.

7. Work ethic and Values

This can often be influenced by how someone has been brought up, but also their innate personality has a lot to do with it as well.  There are just some people who are conscientious and driven, whilst other people can't really be bothered working very hard.  That's just life folks.

8. Emotional Intelligence

Emotional intelligence is the ability to understand and influence your own emotions, whilst also doing the same with others.  Not many people work in a vacuum and so the ability to interact effectively with others is essential in nearly every job.  What is just as important is understanding how our own emotions are influencing how we are behaving.  For example, to be self-aware enough that the issue listed under "Suitability for the role" in that we are procrastinating, rather than lying to ourselves that we are "prioritising" is important to success.

9. Recognition

This is one of the easiest things to do, but is so often forgotten by business owners and managers.  Gone are the days where it was enough to say "they are being paid, that's enough recognition!".  Recognition needs to be specific and authentic for it to count.  It also comes in many, many forms - some of which you might not consider.  We all like recognition, especially those who say they don't care about it.

10. Health and wellness of the individual

A lot of high powered people may scoff at this one.  "I work 16 hours a day, get by on 4 hours of sleep a night, have high blood pressure and drink too much coffee.  Yet I get a heck of a lot of work done, so health and wellness is irrelevant!"  It is true that working 16 hours a day will probably get more done than working 8 hours per day.  However, the cumulative effect of poor health will result in less productivity per hour.  It may also result in poor decisions or poor communication taking place, that can have far reaching consequences beyond just the volume of work.  Many people these days are not sleeping enough, not looking after themselves well enough in other areas of their life.  If you do not think this has an impact on performance, then best you take a nap and come back to me.

11. Technique and process

This is often overlooked for some reason and is a little bit part of the "she'll be right mate" culture in Australia.  How someone goes about their job is absolutely paramount.  Consider your golf swing.  The right technique results in hitting the ball far and straight with little effort, whilst the wrong technique results in a dreadful slice or worse - no matter hard you try.  It's amazing how many instances where I have worked with managers on the technique of their staff only to find that there were significant issues hampering performance that were easy fixes.

12. Environment and conditions

This is fairly obvious one but should not be overlooked.  If the conditions in which someone works, such as the tools they have to use, the workplace etc. are not up to standard, then this can hamper performance.  Before blaming the employee, look at what they have to work with to get the job first.


So there you have it!  You will find that if you have a performance issue, or if you simply wish to raise the standard, by looking at these twelve factors and taking the right action to address the right one, you should be on track to raise the bar in terms of employee performance.  By the way, hopefully you noticed that there were twelve factors listed and not eleven.  The culture here is that you always go beyond the expectation :)

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