Feature Article - March/April 2010

Shifting Gears

Managing Change Using Motivation, Rewards and Incentives

By Kellye Whitney

Winston Churchill once said, "There is nothing wrong with change, if it is in the right direction."

The author and former prime minister likely wasn't speaking specifically of the business environment, but he could have been. Change in modern business is as inevitable as the tides, and reinforcing behavioral change is an ongoing activity in an employee's performance management process. If managers are to promote and sustain positive behavioral change, alongside goal setting and various feedback and coaching mechanisms, rewards and incentives can be handy tools.

"Most managers and people working in organizations would probably say they're always in a state of change," said Tom McMullen, North American reward practice leader, Hay Group. "If you want to get results you need to have the behaviors to get results, and rewards and incentives are reinforcers of behaviors. I don't think rewards and incentives drive behavior, but they definitely reinforce what's important in the organization."

McMullen said using rewards and incentives not only helps to ensure goals are perceived as important, they can help managers ensure that goals are achieved the right way.

The Psychological Element

Speed in the business arena is increasing rapidly thanks to technology and its flattening of the global marketplace. Faced with the need to battle more competitors than ever before, organizations are struggling to differentiate themselves, and one misstep could literally mean the difference between mere survival and major success. It's critical for employees to execute on strategic objectives immediately.

Unfortunately, the nature of change, however constant, can be uncomfortable. Employees may resist complying with a new way of doing things whether they are dealing with increased workloads due to layoffs, a new system integration, or mergers or acquisitions. Mistakes are common, as is backsliding. Management may demonstrate the new behaviors, and employees may imitate them in the short-term, but without the behavioral reinforcers McMullen spoke of, the tried, true and familiar will win out in the long-term performance pool.

"It's human nature for folks to want to be rewarded, and subconsciously those rewards help to solidify the change," said Joseph DiMisa, senior vice president, Sibson Consulting. "Rewards and incentives help to smooth over any fears, doubts or uncertainties caused by the unknown, and when you use different motivational vehicles it shows there's some awareness on the organization's part that there will be discomfort."