When a Win-Win…Is Not
Special thanks to Noelle who participated in a Being a Trusted Advisor program Charlie and I led recently. Noelle told a similar story in class that was the inspiration for this post.
I had an experience with US Airways recently that shed light on the difference between what I’ll call a Sears Win-Win* and a Real Win-Win. In short, the difference boils down to incentives.
The Story of an On-Time Departure
It seems that US Airways is placing a lot of emphasis on on-time departures these days. Works for me! As I was getting settled on a recent flight, I noticed that the flight attendant working my section was particularly smiley and up-beat, urging everyone to get buckled up and ready to go in a most effervescent way.
I acknowledged her demeanor as she paused near my row. "We’re working hard for an on-time departure today and it looks like we’re going to make it!" she beamed.
"Wow," I said, a bit taken aback by the commitment and the positivity.
Then she added, "And there’s $50 in it for me if we leave the gate on time!"
(Apparently, US Airways implemented a new program in 2009 where employees below the director level can earn up to $150 per month in incentive pay when they achieve top-three rankings for on-time performance, mishandled baggage reports or customer complaint numbers.)
"Oh," I said.
And then we left on time…and arrived on time.
Why Motives Matter
On the surface, this sure looks like a win-win: I won because we left and arrived on time; the flight attendant won because she got her bonus. The corporate incentive program worked! Or did it?
I say it didn’t. Not really. It clearly achieved a desirable result (me arriving on time). And that result came with–what’s the word I’m looking for–baggage (me feeling like chopped liver). Which is why I call this a Sears Win-Win, not a Real Win-Win. If we look throught the lens of the Trust Equation, my friendly flight attendant’s Self Orientation was sky high. And therein lies the problem: the source of her interest was her own benefit, not mine.
How Do We Make the Ending Happy?
Here are some conclusions I draw from this story:
- Incentives are great. And they’re not enough
- When one or more parties in a business transaction leaves that transaction without feeling cared about, it’s a loss, not a win.
- Motives aren’t only spoken; they’re exuded
- Real Win-Win’s are motivated by caring, not by numbers.
Which begs the question, how do you incent–and incite–someone to care?
Any answers out there?
*Reference courtesy of Frank Zappa
My reaction to the US Airways event is very different from Andrea’s. This is a business transaction that worked well. If I were the passenger, my reaction would go like this: I’m paying for the flight. It looks like part of my fare is being used to pay people to do things that benefit me. What a concept! Maybe others (the gate crew? that baggage handlers?) are also being incented to act in my best interests. If they are, that’s corporate culture at its best. Knowing that the corporation cares enough to provide a direct incentive to the customer-facing employees to care for MY interests would give me a warm, fuzzy feeling!
Andrea,
What a great example and a tough question. It seems that since there became an empahsis on the science of management, we have been trying to lead and manage with things we can quantify, (money, units, time). I mean how do you measure employee engagement with a customer? How do you track an orientation to service?
I think it goes to the culture of an organization. What do the leaders of the organization talk about? What do they measure? How do they talk about it? Who do they recognize? It’s about the things that are hard to measure. It’s things like service orientation, reliability, communication, the why that we are in business for.
I have encountered a similar experience with my auto repair shop. They send a survey home with you at the end of each encounter to determine how the Service Rep managed the encounter. And before I leave the dealership the Service Rep always asks, "is there anything else I need to do?" And then she says, "If I am anything less than a 5 on the survey it comes back on my record."
The intent of the survey is right, measure client satisfaction. Tieing rewards to the survey is also a good intent. Perhaps it is just human nature to want to maximize the cash return and minimize the pain of poor performance against the measurement. And that gets us back to culture, and values.
Thanks for the post.
Andrea,
I loved your post, but I think you’re equating the flight attendant’s enthusiasm with the financial reward only. Did she give terrible service during the flight or was she engaging and enjoying it? To your points …
(Which begs the question, how do you incent–and incite–someone to care?) You can’t motivate someone to "care" … it’s a value that they have or they don’t. First, you only hire people who fit your culture of ‘caring’ by using a profile that measures a persons values. We call it ‘social valuing’ … "giving of yourself to help others". Second, you measure and reward the activities that lead to the end result you want (i.e. customer survey results, supervisor visual audits, mystery shop results, etc.) It’s that simple which really isn’t that simple.
I didn’t mean for this to be so long … sorry. Great post … I love following the work that you and Chuck do.
Andrea,
If I read you correctly, I think you picked up that the flight attendant allowed her self-interest to overshadow her role in servicing your interests.
Do you think that it’s OK to have a different measure for "task workers" than for "knowledge workers" or "relationship workers"? Meaning: if you have a relationship with a travel agent, and she forgoes some incentive in order to get you a better fare, then she has demonstrated that her relationship with you (by virtue of wanting to save you money) is more important than the incentive she may receive. But if she gets you a great fare and says "well I like using this airline, they are usually cheaper but I always get a better incentive." Then you might feel differently. But in either case – a travel agent can be someone you have a business relationship with, someone who knows you and what you care about.
In the case of a flight attendant, one might view her relationship to you very differently from the start. That she has incentives may very well be the motivation for her actions (sorry for the tautology), but given that you are not developing a relationship with her that involved her making too many out-of-the box choices, maybe it’s ok for her to be motivated by self-interest? Perhaps her real error was revealing it.
Do you think it’s OK to evaluate different types of workers using different measures of relationship-trust? And in this case, the flight attendant role is primarily task-focused (assuming a normal flight)?
Actually, maybe her biggest mistake was that she is also a "brand ambassador" for her airline — and she was shortchanging her company by not showing it in the best light. In other words, her self-interest should not have overshadowed her loyalty to her brand (moreso than it overshadowed her service to you).
What do you think?
Hi Andrea,
I am going to tag along with Steve’s comment becasue I thuink he is right on target. To continue his thiought let me play Devil’s Advocate and answer your questyon with a question, "Why does it matter?" Both parties had a need that was satisfied and both got what they wanted. It was win-win; move on to the next transaction. Who cares if it was real win-win. And, therein lies part of the answer for me. Flights leaving on time is a esentially a commodized transaction. Such transactions simply don’t, imho, require a personal relationship.
In my business – sales of financial products – I get paid (incented) when I close a deal. I also get penalized if that relationship leaves the organization in the next year or in 25 years. I can’t close the deal in the first instance, nor can I retain the relationship unless there is a hugh amount of trust and genuine caring that is developed and nurtured over time. I also have to be prepared to direct business to some other provider if that is the best solution for the client. This "real win-win" relationship is satisfying and profitable for both sides (I collect a fee and the client has peace of mind and security). We both feel good about the relationship and there is a bottomless well of trust – to the point that I have a number of surrogate mothers and fathers. These are not commodity relationships (like leaving on time). I don’t know how you incent someone to care about a person as a human being first, foremost and last and secondarily as a client/revenue source. It seems to me that you just have to have that desire inbred. It is my experience that this desire to care, to trust and be trusted, can be refined, expanded, deepened, whatever, but it cannot blossom if the seed is not there.
Make it a great day.
Jim.
When did incentivize become a word and the verb of choice in business…oh yeah, probably right about the time Gordon Gecko came into out lives.
Why should employers/customers/clients have to pay people extra for workers to do their job properly??? I have been a bonus eligible EE for most of my working life but your comments speak to non-bonus eligible workers so lets stick w/ that. I’ve always disliked the idea that waiters/waitresses/bartenders/ hair dressers/ barbers/cab drivers, etc. only obtain a decent "take home" if the customer pays additional $$$, in the form of tips. Why can’t the employer just pay a decent wage to a qualified EE to begin with…and if the business’ bottom line is profitable, then provide EEs w/ some element of profit sharing that everyone shares in. The key words here are profitable bottom-line & sharing…something many knowledge workers & currently the large banks don’t seem to understand but that’s another blog topic.
Airline personnel used to be hired/trained to provide exceptional safety & customer service. They were very selective in the folks they hired because they wanted customer satisfaction that would come back as loyalty and additional revenue. Then the airlines started treating EEs like a commodity to be hired and laid off & fired at will. Point of fact, they were fair about it, they treated customers like a commodity as well. I can almost understand why the airlines now have to incent them to do their jobs properly…almost. The employers are now getting what they deserve …they didn’t care about the EEs that took pride in a job well done, so now they have to pay for that effort. Unfortunately, so do we (the customers), in many, many ways.
Great comments, thanks to all.
I want to touch on a topic raised by Gil and Jim, the notion of commodity vs. trust-based relationships, and whether they should be treated differently.
I agree with Jim that there are "commodity" transactions, and one could include "flight leaving on time" in that category. I would certainly include getting coffee at the local convenience store, and a customer service rep at a phone company in that category.
But if those relationships are treated with the kind of extrinsic-rewards-first approach that Andrea wrote about, they can be excruciatingly painful, and damaging for the customer and the company alike. Consider the customer service rep whose script calls for them to ask for a customer rating–"May I say that I provided you with excellent service today?"
If that doesn’t feel like begging, try saying ‘no’ sometime. In my case, the response was an immediate, ‘but sir, my rating depends on you giving me a good rating, won’t you reconsider?’ This is worse than being accosted by a beggar on the street: I may resent the intrusion, but I can also decide on my own whether to show compassion or to walk on by.
When a CSR whines at me for a better rating, the stakes are raised: now they are begging me to intervene in a system that I want nothing to do with, to manipulate the game rules for this person, from whom all I wanted was to fix a billing error. It makes me feel like the MAD magazine cover, "Buy this magazine or we’ll shoot this dog," with a person pointing a pistol at Fido.
Incentives driven? To the max. Transactional interaction? You betcha. But don’t say it doesn’t matter–that kind of system is horrible for everyone.
On the other hand, transactional relationships can be accompanied by great triumphs; I wrote about one such instance (also on US Air) a few weeks ago http://trustedadvisor.com/blog/715. Or, see Jim’s own example directly above.
I think everyone in this comment stream agrees that intrinsic motivation is a good thing in complex, intangible, trust-based interactions. I’m suggesting that the same is true in commodity interactions–just not every time. The really customer-focused waiter at my favorite Saturday morning coffee shop knows that I value my privacy, and his respectful distance. Except every once in a while, when intrinsic-value behavior can suddenly become critical.
Psychologist/educator Alfie Kohn had it right (see "Punished by Rewards"). Incentives do work. They incent people to get more incentives.
I agree with all here who say you can’t incent people to have intrinsic motivations if they don’t already have them. But you can surely nurture those motivations, insofar as they exist; and you can even more surely stomp them out by over-doing the extrinsic incentives route.
"Which begs the question, how do you incent–and incite–someone to care?"
As a passenger: care for the flight atendant. Give and you shall receive.
I always get excited whenever I am dealing with an individual in an organization whose interests (incentives) are lined up with my interests. And I watch them like a hawk when they don’t. For example, real estate agents get compensated when the deal closes. Their incentive is to close deals. Therefore, they are not overly enthusiastic about finding problems with a house I want to buy. I can’t rely on them to fight for me to get the best deal, just to get the deal closed.
In the flight attendent example, I think that is a positive for the traveler. I want everyone on the plane motivated to get the flight off on time. And we don’t have to worry about them skipping safety procedures, because they are on the flight with us. 🙂
I am sure there are other more intrinsic motivators that may be more effective, but I have to applaud the airline for taking this step. If you want to see the opposite scenario, go to the DMV or other government agency. It is a wonderful example of how employees act when they can’t be fired and there is no correlation between their service levels and incentives!
John, I find myself very much in agreement with the feelings you express in your first two paragraphs above. But when you talk about the DMV as an example of bad behavior being due to lack of incentives, I really must disagree with a personal counter-example.
I wrote a blog post back in March 2008 about customer service at Comcast versus the DMV, and I have highlighted the link here. Briefly, I have always had the same view of the DMV as you’ve expressed. However, visiting the main branch in Morristown New Jersey, after having not seen it for a year or two, I was amazed.
The same employees were still there. The boss was new. The customer service was shockingly excellent. The boss was out talking to customers, the employees were managing the lines to ensure the shortest possible visit, they were giving constructive suggestions, they were digging beneath the problem to discover the real problem, and they were taking time to understand customers’ unique situations–even when they weren’t strictly DMV issues–and help them improve their situations and address their problems. All in all they were going out of their way to provide excellent customer service.
My guess is that the State of New Jersey made absolutely zero changes in incentives. My further guess is that 100% of the difference was due to a new manager. It is simply false, flat-out false, to ascribe all customer focused behavior (or its absence) to the presence or absence of extrinsic incentives. This is simply one counter example that disproves the generalization.
I don’t disagree with you that incentives generally play a role, that the rule can be very powerful, and that systemic absence of incentives can contribute to a boring, complacent, bureaucratic workplace. But it does not have to be that way, and I think we way too often over-estimate the value of extrinsic incentives.
A good manager–one who inspires, who leads by example, focuses on pride and intrinsic motivation, and appeals to our better sides, can achieve miraculous results–and make for a better customer experience.
Charlie that is an interesting counterpoint. I do agree a manager can have a tremendous impact on motivation. I think I was a little too simplistic in my reference to the generic example of government service, via the "DMV." First, I would love for Virginia to be able to recruit your New Jersey DMV manager! 🙂
In a government work environment, all the intrinsic motivations exist that exist in the private sector in regard to doing a good job, earning your money, helping others, etc. Also, as you pointed out, a governmental organization can do a lot through improvements in management or organizational structural changes. In many areas of government, they are able to provide small, evenly distributed bonuses to employees as well. All those levers exist in the private sector too. However, what doesn’t exist in the public sector, is the extrinsic motivator of capitalism. Yes, it may be a lower form of motivation and it may not be as effective, but in my experience it is usually enough to make the difference in service.
If there was going to be a competition between two service organization on their ability to provide service, I would definitely want the ability to provide incentives, though I will concede that good leadership would be a stronger advantage (if one is able to find good leaders). I think that the NJ DMV is on to something, which is a good manager can really make the difference. However, as other blogs on this site have pointed out, we have a deficiency of good leaders and managers. Actually, I think there are a lot of good leaders in society, they just aren’t in leadership roles. How do organizations get the right people in the right seats on the bus?
Organizations get the ‘right people" in the "right seats of the bus" when the very senior folks determine & the model the appropriate behavior and then set the expectations for their direct reports, and demand they do the same for the cascading staff down the line.
They reward the appropriate behavior (not w/ $$$ – there are way too many culture change examples (good & bad) to illustrate & prove that $$ only goes so far & for so long) and they punish and don’t reward inappropriate behavior.
They expect & require each & every mgr to model & provide the appropriate behavior/service etc. and actually supervise their direct reports & staff to be doing the same. That means they provide immediate constructive feedback to the EEs (positive & negative).
When will we ever learn (I feel a song coming on)…EEs aren’t stupid, they don’t respect & want to work enthusiastically for mgr & org that say one thing & do another. Once the recession crisis is over, there is going to be a huge exodus of talent.
Many thanks to all for such incredibly thoughtful and thought-provoking comments.
Some key themes I heard in the comments:
– You’ve either got the caring gene or you don’t (hire well)
– Leadership is at least as important as incentives, if not more important (lead well)
– Different types of workers (task/knowledge/relationship) justify different types of relationship measures (adjust expectations accordingly)
– The Sears Win-Win is a perfectly acceptable business outcome
Some additional thoughts/key learnings for me from this discussion:
– I am, without a doubt, a “touchy-feely” type – a “Feeler” on the Myers-Briggs, “Networker” on the Trust Styles™ (http://trustsuite.trustedadvisor.com/test/toplink), Influential on DISC, etc.. This means I view and evaluate all transactions through this natural orientation. I’m also the youngest in my family by 15 years so I am accustomed to a lot of attention and *expect* it, even from “task workers” (rightly or wrongly). There’s a bias there. (Side note: some of your clients are like me.)
– I feel no over-riding ill will towards US Airways and will not hesitate to fly with them again as a result of this experience. That said, there was an opportunity cost. While they may not have lost my business, they also lost an opportunity to gain my life-long loyalty (and forgiveness for future mistakes) by enabling an on-time arrival while simultaneously leaving me feeling truly cared for. (And as a “touchy-feely” type, one such experience is enough to earn my life-long loyalty and forgiveness.)
– Why should we lower our expectations for “task workers”? Doesn’t that do *them* a disservice in some way? Charlie and I were batting this around and he reminded me of the story of Johnny the Grocery Bagger, a 19-year-old with Downs Syndrome who now has a leading role in a book by Ken Blanchard on customer service (http://www.stservicemovie.com/) because he chose not to see his work as a commoditized transaction.
– Perhaps the flight attendant’s error *was* in revealing her reason for caring about leaving the gate on time. Except I’d assert that if you have to hide the truth about your motives or your incentive program, then something’s out of whack. Transparency is a differentiator.
Special thanks to Fred who took the conversation to a whole different level, and invited me to get off my own “S,” with the simple suggestion that we incite others to care by caring for them. Beautifully said.