Why So Many in HR Get Incentives Wrong

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When you think of incentives, your mind probably wanders to the same place mine does: useless crystal trophies, team building trips, and gift cards. It can be a sad little corner of the HR world.

Part of it is the way we think about incentives and a misunderstanding in how to use them effectively. In short, folks in HR have helped build it this way.

That doesn’t mean that there aren’t people or companies out there that are trying to fix it.

How to do incentives right

This week, I spoke with Paul Hebert who is an incentives expert and is the managing director of I2I (along with his popular blog Incentive Intelligence).

We discussed why incentives continue their staying power, even in the weakened economy. Hebert says that the transition from an industrial work environment to a white collar, knowledge worker one has been the primary challenge.

“We’ve reached that point where people are actually the most important asset,” argues Hebert. While leaders in the past may have worried about what kind of equipment they were buying or marketing budget, now they are thinking more about how to get the most from their people.

We also talked about how misunderstanding the roles of incentives can have a poor impact and the exact opposite effect.

“Cash isn’t emotional, it’s transactional,” Hebert said. He also argued for better hiring. Anybody can work for more money but finding someone who is already motivated for the cause and turning to them is better than having to pay out the nose. He quipped, “I’ll take patriots over mercenaries any day.”

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During our conversation, Hebert also illuminates how incentives are commonly misused and the (perhaps not-so-recent) gamification of incentive rewards. Take a listen to the entire segment below.

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