How Expectations Can Undermine Employees Incentives

My business partner in the first company I lead once said, “Employees don’t care about incentives.  Even further, a bonus or gift can upset them if they had expected more.”  Although, I learned many things from him, he had the absolute wrong attitude on this issue.  As leaders of our organizations, we must incentivize our employees. Incentives are a critical component to keeping people motivated.  However, I have found that placing an expectation on the emotional response from an employee once an incentive is provided can be a recipe for disappointment.  Of course, we must do our best to match an employees incentive with their performance to the best of our ability.  However, expecting that everyone will be happy with our choices will place unnecessary strain on the relationship between us and the employee.

I have found over the years that giving without expectation of someone’s response allows employees the freedom to express their own personal response.  Further, it releases me from managing their expectations, and it opens me up to being much more supportive to whatever their response may be.  Let’s say I give an employee a $1,000 bonus for helping on a $1 million deal.  The employee's initial response may be frustration that the magnitude of the reward was not proportional to the deal.  I could respond by being offended and upset with the employee's lack of appreciation, but this response will both shut down communication with the employee.  Once communication between us is shut down, I will have little chance of getting the employee to understand the reason for my decision.

A more appropriate response would be to embrace the employee's concern.  Let them know that you agree that $1,000 seems ridiculous when the employee helped bring in $1 million.  Then, leverage that place of understanding to explain your reasoning.  If your reasoning is truly fouled, this approach will give you a chance to change the situation for the better of both parties.  If you still feel your decision is sound, then stick with your decision.  However, continue to embrace the employees point of view.  This may sound like, "Given your view of the situation, I can see how you are frustrate.  I have made a decision I believe is in the best interest of both parties.  It is probably best that we agree to disagree on this issue.  I hope we can find a way to move forward from this disagreement."

It is important to make sound decisions regarding incentives, believe in those decisions, and leave room for others to disagree.  I have found this approach to create positive productive outcomes where all parties feel heard and appreciated.