Pat O'Toole's Dos and Don'ts of Process Improvement: DO Align the Reward System
#4: DO Align the Reward System
As the annual meeting is called to order, the entire software development staff settles into their auditorium seats. The Vice President of Software Engineering covers both the quarterly and annual results, and the need for continued process improvement becomes evident - although project results are more positive than those attained last quarter, they are still below competitors' levels and well below "world class". The VP stresses the need for continued reduction of field-reported defects as the next quarter's stretch goals are presented.
A hush falls over the crowd as the VP prepares to announce the winner of the quarterly achievement award. The prestige associated with winning this award is legendary, and the $5000 check that accompanies the plaque doesn't hurt either. Although many of the projects met their committed dates, two project teams worked incredibly long hours to accomplish their respective missions. The only remaining question was upon which project team would management bestow the award.
As the honored recipient is named, the crowd utters a collective gasp. Their minds emerge from the fog of stunned disbelief to hear the VP saying, "... having analyzed the project's historical peer review data to determine an expected range of defect density, she then piloted an approach to re-inspect work products when an insufficient number of defects had been detected. By identifying and resolving more of the defects in the same phase in which they were inserted, the project was able to meet the committed ship date without incurring significant overtime. Let's all show our appreciation for a job well done!"
It could happen! Senior management could actually change the reward system to be more closely aligned with the behavior they say they would like people to exhibit. After all, anything is possible!
Unfortunately for many organizations, it hasn't happened yet. Think back on the last few achievement awards presented in your organization. Who received them and why? More importantly, why do people perceive they were bestowed on the recipients? Forget what senior management says about the importance of process improvement, what messages do they send through the recognition and reward system?
There are two critically important lessons buried in here somewhere. An archeological dig would uncover:
Perception IS reality to the perceiver; and
The behavior you reward is the behavior you're gonna get!
The reward system provides the most tangible evidence of what senior management wants the organization to be when it grows up. If senior management truly wants to transform the organization, they have to take a hard look at the existing reward system and ensure that it is rewarding the desired behavior, and disincentivizing the behavior they are trying to eliminate. Until they do that, their mouths and their money are misaligned.