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Win As Much As You Can

A recent study from Hewitt Associates and WorldatWork indicates that companies are placing a greater emphasis on performance-based pay. However, 83 percent of the organizations surveyed say their pay-for-performance programs are only somewhat successful or not working at all.

According to Paul Shafer, a business leader for Hewitt Associates, "The good news is that companies are trying to motivate through performance. The bad news is that few organizations do enough to motivate this way, so in many cases, employers are unintentionally reinforcing an entitlement mentality among employees."

In The Leading from the Heart Workshop, participants play a game called "Win As Much As You Can." Four teams are given one card with an "X" and another with a "Y." In each of ten rounds, teams simultaneously hold up either the X or Y. Teams win or lose money depending on the combination of cards held up by the four teams. For instance, if one team holds up an X and three teams hold up a Y, the X team wins $3 and the Y teams each lose $1. If all four teams hold up a Y, each team wins $1. The teams can only communicate with other teams in three of the rounds. The only stated objective is to "win as much as you can."

The results are not surprising. Rather than working as single unit to win as a whole, teams compete to beat the others. Why? The instructions fail to adequately explain the goals and how the results will be determined.

Hewitt and WorldatWork suggest that lack of communication, as demonstrated in the Win As Much As You Can game, is the main reason for poor pay-for-performance results. "It's futile to try to establish a pay-for-performance culture without openly discussing goals, how to accomplish them and what it means to an employee's pocketbook," said Shafer. "Pay-for-performance programs without proper communication lead to a culture of employees who are confused about company priorities and don't know what to focus on to maximize performance dollars."

Leaders must Have a Vision and Convince Others To Share It. Only by effectively communicating the organization"s vision, and each individual's role in achieving that vision, will leaders realize the desired results of pay-for-performance initiatives.
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