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Models that represent the fundamentals behind every incentive program.
Hierarchy of Needs
Abraham Harold Maslow (1908-1970) was an American psychologist whom many consider to be the founder of humanistic psychology. He believed that humans are controlled more by their own values and choices and less by their environment, as behaviorists think, or by unconscious drives, as psychoanalysts believe.
Maslow outlined five levels of human needs:
- The first two levels satisfy basic and monetary needs:
1) Physical comfort is our number one priority -- food, shelter and clothing
2) The need for Security is second. One must feel safe in both physical and economic security.
- The next three levels deal with our psychic income need -- our need to learn and grow as individuals, and the development of our self-esteem.
3) The third level is Social Acceptance. As a member of a group we have specific roles and responsibilities. We look for recognition from these groups.
4) Next comes the need for Personal Esteem. This level is a function of our achievements. Awards, job title and importance, and accomplishments are all examples of our personal growth.
5) At the very top of our needs is Self-Realization. This is the total fulfillment of our potential. If we are always changing and learning, theoretically we will never reach Self-Realization. BUT, we continue to aspire to greater levels of success and personal satisfaction.
Summary
- Before considering a performance improvement program, monetary or basic needs must first be met by existing compensation.
- An incentive program should be targeted at an individual's psychic income needs. Cash can be confusing because it may go to monetary needs. Select awards that are unique and relevant to the participant, so they may gain tangible evidence of their achievement and fulfill their need for acceptance, recognition and personal esteem.
THE BEHAVIORAL MODEL
Incentive programs are based upon the Behavioral Model which was derived from the work of noted psychologist B.F. Skinner. The model explains how positive consequences can dramatically impact an individual's behavior.
Antecedents communicate what you want participants to do
- Make sure you define objectives clearly
- Promote rules and awards
- Create excitement at program launch
- Provide ongoing communications
Behavior is what people do in a given situation
- Function of what they think you want them to do, what they have the skills to do and how motivated they are to do it
Consequences are the reinforcement of behavior and what determines whether it will be repeated
- Provide a wide range of positive consequences
- Recognition by management and peers
- Rewards that have value, choice and are easy to administer
Feedback encourages continuous improved performance
- Provide ongoing measurement and feedback
- Distribute consistent and timely progress reports
Summary
- Processes providing positive consequences help organizations achieve business results.
- In order to change behavior, participants must understand what it is you want them to do and what they will receive for doing it.
- Participants must also receive constant feedback to know where they stand in relation to the goal.
THE BELL CURVE
The bell curve is a graphic depiction of the normal distribution of employee performance in an organization  .
- The majority of employees are average performers
- At either end are the top and bottom performers
- Top performers (10%) will always be at the top. They have the skills and are self-motivated to consistently perform at a higher level.
- The lower-end performers (10%) will always be at the bottom. There is little anyone can do to move these people to perform at a higher level.
AWARDS COMPARISON MATRIX
Summary
- The overall goal of any incentive program is to concentrate on those who will have the greatest impact on the company's objectives.
- If an incentive program is targeted at moving the middle 80% to achieve greater results, the bell curve will shift driving more individuals toward top performance.
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