The Mystery of Incentives

Levitt & Dubner, in their book Freakonomics, have explained how the power of incentives can be used to mould or radically change the behaviour of any individual. They talk about the 3 types of incentives being Financial, Moral & Social.

Taking it from there, it is safe to say that it always takes something else to attract/motivate someone else..and that truth has a lot of relevance in the world of HR.
Contrary to popular belief it is not all about the money.

It starts at the first point of contact. Organizations, today, use various media to sell themselves to the prospective employees. Some use advertising while some use social networking. Whichever may be the media what counts is the power of the message. It is what the organization gets across in that one moment that can act as an incentive to accept/ refuse the proposal. Hence, reinforcing that first impressions count. The organization, here, needs to understand their target audience and walk the podium accordingly. The right EVP/ incentive (culture, salary, career prospects etc) need to be flaunted.

Act 2 i.e. the interview, the organization needs to set the right expectations in terms of what will matter most/ what will strike the cord with the prospective employee. So, if the cause of concern is job profile then one needs to market the profile accordingly and hence convert the employee to their religion and set of beliefs.

That was the incentive story to make him walk in to the jungle but the bigger question is what will it take to make him stay?

This is when we talk of engaging the employee to the heightened levels of excellence and commitment. By employee engagement I don’t mean the number of parties thrown in a year. The engagement process is everything that it takes to engage him and get him addicted to the organization. So you start the process when the employee walks in, ensuring an enriching induction & on-boarding experience, help him form the right relationships (friends at work), provide the required hand holding (mentoring), and most importantly acquaint him with the laws of the jungle (culture) thereby increasing familiarity. Once involved in his rich role (promised job profile), he would need time to time ego boosts to make him feel wanted. Hence, recognition plays an important role. If this is not enough then the performance reviews set the stage for career development. Even when it comes to learning & development, being learning centric is not enough. One has to know the pulse of the employees. You may conduct n*100 programs but do they work with them? You might want to equip them with the most boring of all and it can be done, it just needs to be done in the right way. Use books if they like to read, Use mobiles if they are pseudo techies, use videos if they like time pass, or use role plays if they feel they are born actors.

One could easily say that everyone has a different weakness and the organization needs to use these to their advantage. However, I feel differently.. I think that ’the organization needs to use it’s advantage to ensure that the organization in itself becomes every employee’s weakness’..

Levitt & Dubner said “people respond to incentives”.. Can we assume a scenario where the organization becomes the incentive?

An Online Date with HR

With the advent of social networking websites, HR has been blessed with an opportunity to come up with cost effective means of attracting, engaging & retaining talent. The phenomenon can prove to be a solution across sub functions of HR.

Some possible examples:

Recruitment: These websites prove to be an effective talent search tool. These not only provide with an applicant base but also allow for background verification. Fortunately or unfortunately, they also provide a window into the personal preferences and interests of the potential candidates. Hence, this helps not only in reaching hidden talent but also finding a better match as there is a better understanding of the tendencies of potential candidates. These result in a better Source Value Index Score (%New Hires/ % of recruitment budget allocated to the source).

Employer Branding: These websites can be used as a tool for effective branding. Depending on the target audience/ potential talent pool, an organization can publicize its differentiated EVP with the help of online campaigns. Word of mouth publicity on such forums also helps as these comments are generally viewed by people other than those directly targeted. Hence influencing the behavior of more than intended. As a disadvantage, one small mistake can also lead to negative publicity amongst the target audience.

On boarding & Induction: These websites provide as a platform for creating communities which could be aimed at encouraging discussions regarding the organization, culture, management, opportunities, career ladders, formal & informal norms etc. Establishing & maintaining online mentor mentee relationships not only breaks the ice but also makes it easier for the mentor to be available for all queries as per his convenience.

Learning & Development: Social Networking Websites can be used as a stage to create learning groups, discussion groups etc. This can effectively facilitate formal as well as informal discussions on the subject. Such forums can facilitate sharing of personal experiences. Also, it becomes easier of leadership team to participate regularly as they can respond to queries at their own pace. These forums can also be used to generate a positive buzz about new and upcoming learning initiatives of the company and hence encourage greater participation.

Employee Engagement: could be encouraged by creating social employee groups and activity discussion forums where all employees can participate and give their respective views on initiatives, suggestions, ideas etc. Hence ensuring all opinions are valued. Also, it allows employees across cities and countries to share to keep in touch over burning and non burning issues.

Sigining off with: "The value of a social network is defined not only by who's on it, but by who's excluded,” by Paul Saffo, a Silicon Valley forecaster

The Tipping Point for an Employer Brand

As Gladwell defines it, the “tipping point,” signals a key moment of crystallization that unifies isolated events into a significant trend. Having termed the occurrence of a trend of this nature as an Epidemic, he explains the occurrence due to the three rules of epidemic: The law of few, the stickiness factor and the power of context.

We can make an attempt to apply his logic and rules to identify a methodology for successful employer branding.

Rule #1: Law of the few-Connectors, Mavens and Salesmen

Gladwell says that a lot of these trends are spurted by the influence of Connectors, who have vast networks and are highly responsible for creating people links, Mavens, who owing to their knowledge and expertise take the onus of helping people make sound decisions and Salesmen who use their charisma to convert their sale.

Hence an organization should identify such Connectors, Mavens and Salesmen within and outside the organization and make effective use of them to achieve a strong Employer Brand. Connectors could be existing engaged employees, satisfied alumni base, etc. Mavens could be recruitment consultants and Salesmen could be the Branding team who sells the case to existing employees and is able to build a strong case with the prospective employees.

Rule #2: The Stickiness Factor

The Stickiness factor, as defined by Gladwell, refers to a Unique factor which propels the phenomenon to stick and hence influence future behaviour.

Hence, an organization should work towards creating a Unique EVP which would stick and hence convince the employee himself/ Connectors, Mavens and Salesmen who would then work towards influencing the attitude of others.

Rule #3: The Power of Context

Gladwells says that every trend should be introduced in the right environment to be able to achieve its Tipping Point.

So, the organization should make sure that the EVP they are creating is friendly to the current state of employees in the market as well as the state of the business and industry. Hence, creating an EVP which is in demand at that point of time and not just something which is feasible.

Signing off with: "Any damn fool can put on a deal, but it takes genius, faith and perseverance to create a brand." - David Ogilvy

Curse of expectations: Leading to a dive in the Blue Ocean

The dire need for talent differentiation has led to the curse of high employee expectations. The demand for excellence has allowed talent the audacity to demand an ‘out of the box’ EVP. This has led to the increasing importance of the value of innovation & creativity in HR.

A Red Ocean represents an existing market that is well defined as well as heavily populated by the competition. So, a red ocean is more like the situation of perfect competition wherein the same product/EVP is offered to the buyer/employee at the same price. So, he has little incentive to buy you and you alone. There is zero security in your investment as an employer. Hence, in this ‘War for Talent’, a red ocean strategy would only be a futile attempt.

A strategically inclined HR would hence move towards application & creation of a Blue Ocean Strategies. As defined, the aim of a Blue Ocean Strategy is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant. Blue Ocean Strategy is the simultaneous pursuit of differentiation and low cost.

HR needs to achieve such heightened levels of innovation excellence and hence be able to produce Quality Classics for an EVP that cannot be replicated.

Some Diving Blue observations in HR:

1) Use of mobile devices for a LMS
2) Virtual Learning environments
3) Informal Learning
4) Stay Interviews as a means of facilitating an effective retention action plan
5) Social Networking Arenas as a means of effective recruitment
6) Development of Unique Organizational Capabilities
7) Unique Branding
8) Unified Recruitment+ Performance Management
9) Application of Appreciative Inquiry
10) Tempting Job profiles
11) Fancy Job titles

Michael Porter: “Innovation is the central issue in economic prosperity”.