Incentives, Culture and Engagement

For a moment, imagine any group of people faced with great change, disruption or transformation -- a corporation, university, health system, department, family. Now here is a rhetorical question. You have a choice of joining one of two groups. In one, team members are aligned around a common mission and purpose; a diverse group of great brains are all working together in an environment of trust and collaboration to address fundamental and existential questions. In the second, the environment is best described as "every man for himself."  The members of this team are equally bright, equally talented, but not aligned behind any common mission.  To which team would you want to belong?

The answer is obvious, but begs the additional question: how do you create an engaged, aligned organization? Part of this effort often involves alignment of incentives. But how effective are incentives in driving a culture of engagement? There is significant evidence to support the answer -- not very.

The Daniel Pink YouTube posting The Surprising Truth About What Motivates Us is worth a six minute investment in time to begin to understand the nature of incentives. The contention of the piece is two fold. First, economic incentives may be effective in increasing the production of highly repetitive tasks, although the effect may be perishable and require ongoing escalation of the incentive to maintain the desired effect. Second, incentives directed at highly complex cognitive tasks have the paradoxical effect of decreasing the desired behavior.

Given the entertaining format of the Pink piece (stop motion white board cartooning), it is tempting to dismiss this as pop psychology. However, there is ample evidence to back up the conclusion.

The origin of this area of behavioral psychology has its roots back in the 1960s. Hertzberg published a study recently reprinted as a classic article in The Harvard Business Review, One More Time: How Do You Motivate Employees?.  Based on qualitative research from a variety of blue collar and professional groups, a common and persistent theme emerged. Groups were asked to identify factors in the workplace that, when present, drove extreme satisfaction and engagement; conversely, they also ranked factors that drove disengagement. Hertzberg's parlance, hygiene factors (e.g. compensation, company policies, relations with coworkers, etc.), when absent, or when present in the negative, where liable to create dissatisfaction and disengagement. However, when present in the positive, these factors do not drive extreme engagement. Pay someone poorly, they are likely to be dissatisfied. Pay them extraordinarily well, you are unlikely to buy their satisfaction or engagement.

Hertzberg went on to describe intrinsic motivators -- items like achievement, recognition and doing meaningful and important work. The results were exactly the opposite. Intrinsic factors, when absent, do not drive extreme dissatisfaction. However, when present in the positive they do drive rabid organizational fans. Similar observations have been made with groups of physicians. ¹

 

Intuitively this makes sense. Imagine a highly competent, experienced and motivated school teacher standing in front of a room full of students, and committed to bringing out the best in each of them. The teacher feels a responsibility to develop and challenge the best and the brightest, to help them reach their potential.  The teacher also feels a responsibility to lift up those who are lagging behind.  At the end of the day, satisfaction comes from making a positive impact on as many students as possible, and satisfaction emanates from a sense of professionalism. The teacher is motivated to constantly explore new and innovative methods of reaching the students, and these efforts are celebrated and rewarded.

Now let us introduce a hypothetical incentive. A bonus will be paid based on the number of students passing a standardized end-of-year examination, compared to a statistical peer group comparison. Let us further assume the unobtainable -- that this metric is perfect. That is, it is risk adjusted based on the characteristics of the class. Socioeconomic factors, school resources, strength of the family unit, local crime rates, etc. are all controlled. The incentive will be applied on a level playing field.

What is the likely impact? We may very well see increase in pass rates; but at what cost to our star teacher? To earn the incentive, the teacher could well ignore the gifted in the class --they are assured of passing. Similarly, the less academically successful could be written off -- they will not pass even with Herculean effort. The incentive is designed to bring more marginal students up to a common baseline, which by its nature is probably below typical expectations for the average student. The teacher will be celebrated by the organization and recognized by peers for generating better numbers; not for innovative techniques. Perhaps the teacher will deliberately change the approach in the classroom to maximize performance; that is, teaching to the test. Perhaps the teacher is so firmly rooted in a sense of professionalism that the commitment to all students will not be abandoned, even though the organization does not seem to value the effort. In either case, the teacher viewed to be more successful in the new incentive system, but less satisfied, and less engaged.

It is not difficult to imagine analogous dynamics in healthcare or medical education. We can develop incentives to drive specific, measurable clinical outcomes. We can measure success of educational efforts based on certification exam scores. But we need to pause and reflect what could be lost in the process.

The quote "Culture eats strategy for breakfast" has been attributed to management guru Peter Drucker. I would amend this: A culture of professionalism eats incentives for breakfast. There is certainly an important role for metric driven organizational goals. However, there is pernicious danger in placing blind faith our ability to create culture through perfect alignment of incentives. 

¹ Cassel CK, Jain, SH. Assessing individual physician performance: does measurement suppress motivation? JAMA. 307(24):2595-6, 2012 Jun 27.