Introduction/ Why a company set up incentive system but few have enthusiasm? Actually it is not the matter of “incentive”, but the system imperfection, besides incenting to elite staff, we need to pay more attention to the middle majority.
Many enterprises adopt incentive method which plays a role of mobilizing staff’s initiative and enthusiasm in a degree; meanwhile, it has huge limitations. The author discovered a common phenomenon: only minority awarded staff regard the incentive system as good and stimulated; while the majorities are not interested in it and even get “numbed”.
What is called “elite stimulating predicament” is in management with the original intention of incentive system to generally stimulate staffs, the result is that it only works on the minority elite; even though the others try their best, they will not be awarded attributing to their capabilities, characteristics and so on, therefore gradually they lose confidence to get award and interest in incentive method, show a phenomenon of “majority numb” in front of the incentive system.
The aim of incentive system is to stimulate all staffs to work hard and get better performances, in theory, those unawarded staffs ought to work harder and strive for the awards, but why the “elite stimulating” system numbs the majority?
In fact, long ago the reason of this phenomenon has been revealed by the expectation theory proposed by American psychologist and behavioral scientist Victor H•Vroom. The theory deems that people always inspire to be satisfied and achieve a goal. This goal performances as an inspiration before it be achieved, when this aim becomes a stimulating power to individual motivation, and the strength of the Motivation (M) depends on the product of Valence (V) times Expectancy (E), in a formula of: M = V × E.
According to this theory, although the incentive system in “elite stimulating” mode makes all staffs’ valence (V) large, the majority shows numbed because the expectancy (E) to achieve goals is too small. The aim of this system is to stimulate staffs to work hard, but the result is not all staff’s motivation (M) is the biggest.
Besides, the single performance evaluation criterion also makes the disadvantages of the present incentive system which only encourages minority elites seem more obvious. Every staff has his/her advantages, if the company measures all staffs with one single criterion, it occurs only one outstanding person; while if it measures the staff from different aspects with different criterions, the unique features of every staff can be discovered, as well as the performance evaluation.
It exists the 80/20 Rule in management that 20% of the staff create 80% of value, so the incentive emphasis should be laid on the 20% of elite staff. However, if the 80% of general staff are indifferent of incentive system, get numbed of it and become the audients in front of awarding, the achievement of enterprise strategic goal will be influenced. Thus for enterprises, the reforming direction is to stimulate not only the 20% of elites, but also the middle majority. Therefore, how to reform the present incentive system so that the managers could get rid of “elite stimulating” predicament and achieve the “all-staffs stimulating”?
According to the analysis above, we propose the manager to solve this problem in two ways： The first is improve the goal expectancy, and the second is to formulate diversified performance criteria, that is, to add incentive dimensionality.