Rewarding people without destroying their motivation has been one of the top management challenges in companies employing knowledge workers. Unfortunately, the reward systems used by these organizations incentivize recognition through imaginary performance rather than real merits, causing an extremely negative impact on employee motivation.
A Case Study by Tadeu Marinho
As a company that believes in experimentation and provides a safe environment for us to validate our hypotheses, Knowledge21 has decided to bring the Merit Money practice in-house, enabling our Agile Coaches team to experience how it works and draw their own conclusions.
For nine months, from April to December 2017, 1,000 meritecas was deposited each month in the “account” of each coach so that we could distribute them within our team in whatever way we thought was the fairest. The only restriction was that no meriteca deposited by the company could remain in the coach’s account, all should be distributed.
Each transaction was documented in a “donor, value and justification” format and we used a one-to-one conversion rate, where each meriteca corresponded to R$1.00 (Brazilian Reais) which should be redeemed after disclosure of the result.
Initially, we adopted a format where there was only one person responsible for consolidating all transactions and sending to each coach only those referring to his account. In the very first round we felt the impact of centralization, as our schedules were full, and we decided to let any member of the team take on that responsibility.
After a new short period of time we implemented a second improvement. We made all of the transactions carried out by the team public. Because we are geographically distributed throughout Brazil, after each cycle the results were shared in a Google Drive spreadsheet, allowing each coach to visualize the details of every transaction made on his account as well as on accounts of the others in a transparent way.
Among the main lessons learned, our team of coaches and founders emphasized that:
- The model is a great way to incentivize the culture of positive feedback and recognition of work well done.
- Autonomy added to the collective intelligence of the group avoided abuse and mitigated injustices.
- We improved our systemic vision as all coaches began to look at the work of the whole team to provide feedback.
- It reinforced aspects such as that of those who have more visibility, strengthening the culture of exposing the work done for the whole team.
- It showed evidence of the maturity of the team: Deciding to make values and feedbacks open for the whole group, strengthening a safe work environment and mutual aid.
- If you have a fair salary, where no one bothers you how much you earn monthly, a variable bonus system will hardly bring negative consequences.
- In a system composed of knowledge workers, it is possible to generate healthy peer pressure and self-organization using extrinsic factors.
- The culture can be positively shaped, following #TrueAgile values even with some money being used as fuel.
- Evaluating behavior rather than outcome has immense value because it helps create a collaborative culture rather than self-serving behavior.
- The model application allows exposing pains that are often hidden from our daily routines, allowing the company culture to have great opportunities for improvement.
- There is nothing more powerful than the “behaviour drives results” to design exponential organizations and high-performance teams. The right behaviour brings the result that the company needs.