Wednesday, September 9, 2009

Can you Incent Your Employees to Innovate?

Over the last few days I have read two very interesting articles on the topic of innovation. The first one is from the September 2009 issue of HR Magazine, Motivating Innovation, How to Get and Grow Great Ideas. (Must be SHRM member to view) The Author, Kathy Gurchiek, discusses how HR professionals can create a culture that supports innovation. Gurchiek lists the building blocks needed for innovation to occur according to Judy Estrin.

1. Curiosity and a natural ability to question the status quo.
2. Risk taking and willingness to learn from failure.
3. Openness. Organizations with strong silos tend to be less innovative.
4. Patience, tenacity and the sense of giving an idea a chance to grow.
5. Trust, underpinning the other values.

I began to think about how you keep these ideas flowing? How do you recognize and reward new ideas, idea implementation, and the resulting new best practice or product.

Then, a blog magically appeared in my inbox, Daniel Pink and the New Building Blocks for Engagement. The 18 minute video is definitely worth the time. I thought is was very interesting that Pink discusses why the typical forms of rewards and recognition do not work for innovation. He states that creativity and innovation is a right brained activity, which is hard to put inside a box. By using typical carrot and stick rewards that focus you on some specified end result, you can limit yourself on idea generation. The traditional type rewards actually may have the opposite effect on innovation. WOW! That makes perfect sense to me, and I am a very left brained person.

The theory is that if you are engaged in your work, you are more apt to be creative and innovative. Pink discusses that what motivates people to high performance is intrinsic (from within). He discusses purpose, autonomy and mastery.

Phillip Blount, with Phillip Blount and Associates, a compensation consulting firm based in Atlanta, states, "I believe that for employees to be creative and innovative you really have to create the "right" environment for it. By that I mean you can't be too quick to "punish" mistakes if you really want employees to "take a chance" on making something better. You want to recognize and reward the "behavior" you want almost more than the actual results of the correct behavior. "

So do we as HR professionals have our rewards model all wrong? Are we rewarding the correct behaviors more than the actual results? Do we reward for taking a chance? These are all very interesting points brought up by Phil.

The question becomes how do you reward and recognize innovation?

Would love to hear your thoughts and perspectives on this topic. I will keep the conversation going in future blogs. (There will be a reward for your participation! :) )


BarbaraAHughes said...

I hate to sound like an economist but if you agree with Dan Pink's argument, rewards depend on the task. The "old school" rewards apparently don't work in the new world where innovation has to exist in order to ensure a company's survival. In this case, IF innovation is part of strategy, then people who possess the kinds of traits you mention above are selected. The opportunity to innovate, research, do "cool" things, to a large extent is its own reward for this type of person. And, that leads to a different kind of culture and a different way of leading people.
However, like most things, if you try to mix the message -- don't rewards tasks that actually benefit from traditional rewards or use traditional incentives to reward innovation -- neither approach will work as they are meant to do. So, it depends!

Unknown said...

Ok Barbara you get the "FIRST TO COMMENT" reward!!! Congratulations on your achievement:)

I believe you probably have to think like an economist on this issue. I do agree that people that innovate do not ypically value the same kind of rewards as those that are focused on routine tasks. So, what this means is that you may have to design different comp plans for innovators?? Is that a possibility?