Your outcomes directly correlate with your reward systems, meaning you get what you reward with your team and customers. In this post, you’ll learn why and how to create strategic reward structures so you get the outcomes you want.
A Lesson from Swedish Tax Law
Here’s a quick example of what I mean by, “You get what you reward.” In the movie On the Basis of Sex (highly recommend!) Martin Ginsburg (Ruth Ginsburg’s late husband) explains how the government changed tax laws in post-WWII Sweden, taxing people that were married at a higher rate than if they were single. To avoid additional taxes, people changed marriage and living status completely changing social behaviour. They’d go so far as to add separation walls to their homes to satisfy the tax rule that couples living “separately” would be taxed at a lower rate.
The people adapted their behavior based on the reward.
For the government, this was a good lesson in getting what they reward. Changing tax law to increase taxes caused significant cultural change.
Getting What You Reward With Your Team
So, how does this translate into business and your relationship with your team? In short, you want to reward the behavior, action, and outcomes you desire. If you reward behavior that doesn’t align with your objectives, you’ll get undesirable and sometimes surprising results.
There are three key components to set your team up to win:
- First, they know the standards for their role and understand what it looks like to WIN.
- Second, they experience good, regular communication and know priorities.
- Finally, they get regular feedback on how well they’re doing.
Your team’s reward doesn’t always have to be money. It can and should be attention, emphasis, acknowledgment, and/or positive reinforcement. A big mistake entrepreneurs make is throwing money (as incentives or bonuses) at their problems before foundational expectations are set. Bonuses should be the icing on the cake, not the cake itself.
The reward is inherently tied with the outcome. And when you’re strategic about rewards, you’ll create the best results for your business and your team.
A pharmacy owner I know is committed to giving ten positive reinforcements for every corrective feedback. By acknowledging what’s working at a greater scale than what isn’t, he inspires his team to continue outstanding work while making tweaks to the actions that need improvement.
Many business owners get this wrong.
They tunnel vision only into what’s wrong and stop rewarding or acknowledging good behavior. Multiply that by all the corrections they focus on, and the team can go weeks if not months without feeling rewarded for the good they do. Without inspiration, encouragement, or appreciation for good work, is it any wonder teams eventually lose steam and slip into destructive, hard-to-fix patterns?
You get what you reward.
So, dole out appreciation and acknowledgement handsomely! If you see a stellar interaction between a team member and a customer, you overhear a team member resolving an issue, or you notice someone’s always a few minutes early to work, say something! Make your team feel good, and watch how they reciprocate with more good!
There‘s an opportunity to reward even when you have to provide constructive feedback.
My method for providing feedback has three steps:
- Share specifics about what’s working
- Share specifics about what’s not working
- Set clear expectations
Step number one is prime time for dishing out the reward in the form of appreciation and acknowledgment. Share what the team member is doing well, why they’re so crucial to the business, and why you value and appreciate them. By first acknowledging what is working, the team member can hear what’s not working without it being personal.
Be as specific as possible both in what is working so it feels authentic, and in what’s not working so it’s clear what needs to be improved. This will make all the difference in your company culture and that person’s productivity and behavior down the line.
Steps two and three are where you share the specifics of what’s not working and open up the conversation to learn why they’re having the challenge and what can be done about it. Finally, you’ll finish the conversation by setting a clear expectation and getting a verbal commitment of what they will do to meet that expectation moving forward, and if appropriate, what you will do to support them.
Cracking the Code on Rewards for Your Team
It takes some testing to discover what to measure and reward to get the outcome you need.
If you see success in what you are measuring or rewarding but still don’t see the outcome you want, you haven’t cracked the code. What this means is that you aren’t measuring or rewarding the correct variables.
There’s an effort-reward equation.
Many entrepreneurs find that they’ll put money as a reward but still aren’t getting the action or effort they seek from their team. But, again, this is because the money isn’t rewarding the desired action.
To crack the code, first, get clear on the outcome you want, then identify the series of actions that will be the stepping stones to get you there.
That way, you can reward the actions that are on track while re-directing the ones that aren’t. In turn, your reward for cracking this code will be engagement and a core understanding of what generates the outcome with your team because you will have tapped into their sense of purpose and motivation.
It’s a structure problem, not a people problem.
Your team is simply responding to the structures you’ve created inside your business. So, if you’re not getting the outcome you want, look at your reward structures first.
- How are you rewarding your team?
- What and how are you tracking, measuring, and sharing?
Getting What You Reward With Your Customers
It’s the same idea with your customers. If you aren’t getting the outcome you want, your rewards are misaligned. That could mean promotions that aren’t compelling (the reward isn’t seen as a reward), marketing that isn’t reaching your ideal market (you’re trying to reward the wrong people), or missing the mark on what people want altogether. Like your team, you want to understand your customer’s purpose and motivation, build that trust, and create rewards systems from that.
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