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It's one of the thorniest management problems around: dealing with unmotivated, low-performing employees. It's easy to point the finger of blame at them. But in most companies, it's the reward system, not the workforce, that's causing poor attitudes and performance: many reward systems actually discourage desired behaviors while rewarding the very actions that drive executives crazy.
In Reward Systems: Does Yours Deliver? Steve Kerr describes the steps you must take to create an effective reward system:
- Clarify what you mean by "performance" -- in ways that help employees understand how they can support what you're trying to accomplish
- Devise an effective performance-measurement system that distinguishes between metrics used for control and those used for employees' development
- Design a reward system that motivates people to do what you want them to do while also meeting their needs
To get the most from employees, you don't need to add headcount, upgrade your IT capabilities, or hire consultants. You do need to develop the right reward system. This book shows you how.
From our new Memo to the CEO series -- solutions-focused advice from today's leading practitioners.
- Sales Rank: #906962 in Books
- Brand: Brand: Harvard Business Review Press
- Model: 4049027
- Published on: 2008-12-01
- Original language: English
- Number of items: 1
- Dimensions: 7.20" h x .70" w x 4.60" l, .45 pounds
- Binding: Hardcover
- 136 pages
- Used Book in Good Condition
About the Author
Steve Kerr is the former Chief Learning Officer of Goldman Sachs and General Electric. He is a former professor of management and has served on the faculties of the University of Michigan business school, Ohio State University, and the University of Southern California, where he was faculty dean. He has authored numerous academic articles and coauthored the bestselling business books The Boundaryless Organization and The GE Work-Out.
Most helpful customer reviews
0 of 1 people found the following review helpful.
Doing Rewards the Right Way
By Dennis Doverspike
Steve Kerr, former chief learning officer for General Electric and Goldman Sachs, has written a short book on Reward Systems: Does Yours Measure Up? The book is in the Harvard Business Press Memo to the CEO series. However, any employee at any level can learn valuable lessons from the enjoyable book.
I find a lot of short, popular books like this -- it clocks in at less than 136 pages -- are relatively short on content. Many can be summarized in a couple of pages or paragraphs. But not this book by Steve Kerr. Kerr has had a long career in acadame and industry; he is also an excellent story teller. As a result, the book provides a wealth of information on what goes wrong, and what can go right, with reward and compensation systems.
The book contains a number of checklists and guiding principles. The major organizational principles are:
1. Define performance in actionable terms
2. Measure the right things
3. Reward the right things
This may sound simple. Of course, the devil is in the details. The book provides a great deal of information on how you can attempt to follow the three principles.
11 of 11 people found the following review helpful.
Do reward systems work? It depends on who you ask...
By Greg Ehrbar
After over forty years of experience in large and small organizations, I have been on both sides of rewards, both receiving them and being passed over for them. If there is anything this experience has taught me, it is that in general, corporate rewards offer little on the positive side and a lot on the negative side.
There are several issues missing - or at least not fully realized, in this book, though it does contain some very true insight into failed rewards systems, such as those that start out claiming to reward outstanding performance but degenerate into mere attendance contests (a sure sign that management is either too busy, lazy or out of touch with its employees on a personal level).
One of the missing issues is favoritism. People are human, whether they are CEOs or the custodial staff and they respond more positively to those who make them feel good about themselves. They also cannot help but become somewhat biased toward those they know over those they don't know. That is why the first people in a large organization to receive awards are those in their immediate field of vision -- a phenomenon I have witnessed time and time again. Kerr does allude to the fact that, even in a quantifiable reward system, it must be taken into consideration that the playing field is not always level for the candidates -- but what also factors in is that the "favorites", or to put it more charitably, the "high-profile" persons, are often going to get the better chances?
That is not to say that this book does not have value. Kerr does acknowledge flawed systems and, most importantly, points out that there are employees being rewarded for the wrong behavior. There will always be people who figure out how to work the system. That is absolutely true. Some terribly horrendous people who make life miserable for those around them and are a drain on both morale and company resources are given awards, making those awards mockeries of their actual intent.
Another very important point Kerr makes is that saying "No" is punished and saying "yes" without question is rewarded, even if the directive is going to be damaging to the company, the client, or the future. I can't help but wonder how many "less than excellent" employees could see the current problems coming for the fall of the banks or the auto companies but were considered "negative" and "not excellent" while those who carried out the flawed orders of those above them were called "outstanding?"
So Kerr's book is valuable if only that it re-opens the subject and hopefully institutes improvement, if not perfection. You can't expect awards to always be fair, just look at the Oscars or the Emmys. But they're probably here to stay because they're a cheaper alternative to raises and bonuses in these lean times.
That said, the most important part of the issue of whether rewards work is this -- what happens to the people who DON'T get them? They may never speak about it, not wanting to be "poor sports," but for all his quantifying, Kerr can't possibly account for all the hurt and possible bitterness that giving public awards to a select few incurs on the mass of losers. Who is really getting "rewarded" ultimately? The employees or the management who can rest a little easier now that they have rewarded "the best people?"
How can you tell a crowd of employees that they're all valued and they're great, but a few are even greater? Shades of Animal Farm -- some are more equal than others. Such events not only cause deep wounds but also shove wedges between co-workers who are being told there's no "I" in "team." You can't give awards to everybody either, because obviously they lose their meaning. You might want to tailor specific awards for each individual contribution, which is time consuming, or -- heavens to betsy -- visit your people more often to let them know how valued they are. I have seen, too often, that citing the contributions of some while ignoring those of so many others causes hurts, the depths of which you may never be aware.
It's not an easy issue to solve and Kerr, to his credit, doesn't pretend to have all the answers, nor do the companies he served become magically transformed. But again, in these economically challenging times, it might do well to find more ways to do more than just create a blanket reward policy without taking the variables of the human factor into account.
2 of 3 people found the following review helpful.
Good Overview but Not a List of Reward Ideas
By Lisa Shea
Reward Systems by Steve Kerr is a very short book - and it is also a high level book. I have several books on practical reward systems, but that is not what this book provides. Instead, it is more meant for a CEO to think about overall company-wide systems that will help create a productive environment. In that sense I think the title is not quite helpful. Most people who are getting a book on reward systems want to actually create reward systems and get help with them. This book is more about how to decide who gets what raises, and how to get management to implement that well.
To begin with, the book talks about a scientist working with rats. He literally yells at the rats for "not doing what he wanted." Finally he realized his EXPERIMENT was flawed - that he was not rewarding the rats well, so they naturally were not doing the desired behavior. Once he gave them good rewards, they went for them. So for example imagine a maze with pieces of chalk at the end (assuming rats hate chalk ;) ). The rats would not make any attempt to go for it. If instead you had a really lovely cheese at the end, the rat would now try to get it. The book is saying that humans are the same way. If you have "rewards" that nobody wants, you cannot be surprised when the employees do not even try to get them. You need rewards they really do want in order to movtivate them.
The book launches into a long discussion about mission statements and then metrics of how to measure which employees should get a reward. It points out that measurements should be about improving performance. It talks about rating vs ranking - i.e. giving each employee an independent quality level, or putting them all into a long line from top to bottom. Steve points out that ranking systems only really works if every single job has the same skill set and warns that ranking discourages teamwork. He says it is much better to have standards that everyone meets or doesn't meet, vs trying to compare humans with each other to rank them.
As an example, the book cites how people sometimes talk about porpoises being wonderfully helpful and pushing sailors to safety. However, studies show that porpoises like to push all objects in all directions. The sailors that are pushed to land are able to tell their story - but the sailors pushed out to sea drown and don't tell their stories. Therefore we only hear half of the story.
All people in a system need to get treated equally. In many systems the high performers get rewards but no feedback - while the low performers get no rewards and lots of feedback. All people should get feedback so they can get better. Rewards should be quickly, so that it reinforces the behavior, rather than months or years later. You want to change rewards frequently so that they stay "special" and not "expected". Also, you should only rarely punish. People respond far better striving towards a reward than fearing a damaging activity.
The book does reasonably well as a high-end overview of what a reward system should aim for - but it is definitely NOT an actual, practical "how to think up rewards your employees will like" type of book. If you don't have a mission statement or a pay raise system in place yet - or if you are dissatisfied with either - this is a book to take a look at. If you want actual reward system designs and ideas, you will need to look elsewhere.
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