Posted by Boris Pluskowski on October 31, 2002 at 14:51:22:

In Reply to: Re: Dangers of Rewarding Employees posted by Akhil Shahani on October 31, 2002 at 13:25:01:

Hi Akhil

Absolutely - It's fast emerging as best practice to use mainly intrinsic (ie non-financial) rewards rather than extrinsic rewards as the basis for motivating and rewarding employees.

Unfortunately, in the case of Idea Management, which is frequently seen as the evolution of the old suggestion box, most legacy systems seem to have used cash (usually as a % of cost-savings) as the main motivating force - which has led to "gaming" of the systems and an unhealthy competitive nature including jealousy amongst employees which is obviously bad for the knowledge sharing and collaborative aspects.

As companies have become more aware of these problems, they have been abandoning this approach, choosing instead to reward via more indirect methods. For example, one of our clients, in consumer goods, awards "points" for every contribution to the system - for each idea 100, for each comment 50, etc. - as well as a bigger "points" prize for the top idea as decided upon by the evaluators.

Over time, as people collect these points, they can then redeem them against various things such as company mugs, $100 gift vouchers, with the top prize being 1 vacation day.

They have achieved phenomenal results - from the perspective of number of ideas submitted, particpation rate (which was over 70%!), and collaborative aspects.

There are also numerous other companies who have also done similar things - including awards dinners, web site mentions, and of course, the classic plaque and picture by the door.

The big problem going forward is how to culturally manage the migration of a company that has used monetary motivation techniques in the past to a non-monetary technique now. One a worker is used to getting a % of the cost-savings / new revenue he's brought to the company, it's hard for them to accept getting "virtual points" afterwards. They no longer see it as part of their job to help the company succeed through these ideas, and instead expect to be financially rewarded substantially. In fact, even amogst companies that do give %'s, you frequently have the issue of employees not being happy with the amounts given and wanting more.

It's a really interesting dilemma - and one I'm still trying to solve. Any ideas?

• Imaginatik - Idea Management

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Follow Ups:

• Re: Dangers of Rewarding Employees Akhil Shahani 23:48:53 10/31/02 (5)
  • Re: Dangers of Rewarding Employees Boris Pluskowski 10:29:20 11/01/02 (4)
    • Re: Dangers of Rewarding Employees Reilly Atkinson 18:08:16 11/01/02 (3)
      • Re: Dangers of Rewarding Employees Jack Vinson 10:32:24 11/05/02 (0)
      • Re: Dangers of Rewarding Employees Boris Pluskowski 13:03:44 11/04/02 (1)
        • reward and promotion Matthew Nti 14:28:00 03/07/03 (0)

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