Real business outcomes of simple incentives
This article has caught my eye.
It’s a short article, but it, very casually, showcases the success of simple incentives.
An excerpt from the article:
A major reason is the company maximises efficiency by paying staff extra for correctly filled orders.
“He was able to eliminate many supervisors because the line workers know their business best,” Mr DeLong said.
Former C&S president Edward Albertian told Bloomberg less than two per cent of company orders have errors, efficiency that’s “unheard of” in the industry.
What an insight into how a targeted behaviour tied to a reward can make long term behavioural change that ultimately impacts on the bottom line.
And add to that that they used the data collected to make smart business decisions based on factual output.
I do not advocate or ever advise our clients to have a disincentive component as part of their strategy. So I do not support their strategy of cutting people’s pay for not performing a job well. In our experience having a positive outcome due to the desired changed behaviour makes people work smarter and harder. You should not remove something – that’s the whip… not the carrot.
But the disincentive aside, I think this sends a clear message of how a simple incentive structure with a clear output can produce large results.
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