Management Notes

Something I've suspected, that's difficult to quantify and even harder to implement. Sometimes, financial incentives cheapen and are demotivating relative to the perceived value of the work that's done. From Incentive Intelligence who pulls quotes from the book Predictably Irrational:

Money, as it turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well."

In a market where employee's loyalty to their employers if often wilting, social norms are one of the best ways to make workers loyal, as well as motivated."

Although some companies have been successful in creating social norms with their workers, the current obsession with short-term profits, outsourcing, and draconian cost-cutting threatens to undermine it all. In a social exchange, after all people believe that if something goes awry the other party will be there for them, to protect and help them.

In my limited experience, I think most people believe their work is undervalued. So while social norms can be useful, people ultimately still want to know that they are being paid fairly though there are the instances that I think we can all cite of friends who are underpaid but happily so because of the positive work environments they're in or the experience they're getting. I think part of the solution is to at least try to quantify bonuses and financial incentives as a reflection of the value each person creates.