Saturday, March 28, 2009


"Incentives and rewards are some of the most powerful management tools available" (Cited from "Making innovation Work", written by Davila, Epstein & Shelton).

People work against some compensation. We do not expect people to come to work day after day if s/he does not receive anything in return. Yet, when we deal with rewarding, we redefine the scope, speaking not only about salary (or self-contentment in case of volunteers). People expect to be rewarded; they expect a system that will encourage those who do well and punish those who do not).

A close examination of what I written above, can teach about two objectives in rewarding:
The first sentence was cited from an excellent book I read on innovation. Innovation deals with changing the organization; leaving the current situation and replacing it by another one. Rewarding, as to the authors, is an essential tool for aiding this change and help it turning into organizational reality. If you want to change peoples' behavior, give them incentives before and while changing, and reward them after.
The second objective of rewarding is somewhat different. It deals with the daily routine, motivating us to continually work and perform better. It resembles the gasoline, which every car needs a steady supply in order to continue driving. This need is part of our genes as people, and it only grows with us being knowledge workers, choosing whether to stay and how well can we perform.

It is obvious why rewarding is so important: To help maintaining and to help changing.
The problem starts as rewarding is not as simple as we would wish.
It is not simple to reward, as, due to researches, to much rewarding, leads to poor performance. I think the reason is twofold: First, people get used to the rewards, and the level of rewarding required grows higher. The second reason has to do, with the fact that people understand that less is required from them in order to actually win the reward, and they naturally will tend to make fewer efforts.
It is not simple to reward as no company lives in a vacuum: The employees have expectations regarding what they were use to in previous places of work; towards what they hear from friends and family; and towards what happens in the market in which the company works. It is very easy to be drawn after others and build some rewarding system that does not serve us as a specific organization. Acting otherwise and not answering employees' expectations, and un-satisfaction and de-moralization can follow.
It is not simple to reward, as rewarding should be proportional to the phenomenon or behavior which we want to encourage. As already I have written in previous posts, measuring is difficult. In many cases, it is complicated to estimate how much each individual contributed to some success.

However, the main question is not why rewarding is not simple, yet how should it be done.
First, an organization has to conduct its own rewarding system, based on its unique organizational culture; I recommend not following others, not to be drawn after the industry, nor neighbors or friends. The saying "we are unique" can lead to a positive implementation, if communicated properly. Of course, expectations should be leveled with new employees, before they are hired, and as part of the interviewing process. In case of an existing organization, wishing to change its current rewarding system, things are more complicated. I read a study, conducted by Kaplan, claiming that people tend to become fixated on existing incentive and rewarding systems and resist the change. Such a change has to be managed, according to all well-known change management methodologies.

Second, any rewarding system has to be based both on organization needs as well as on the individual needs. In general, organizational needs are in high congruence with achievements and results, while individual needs are more connected to efforts. Both need to be rewarded. Rewarding can be "hard", mainly money in all formats, starting with higher salary, bonuses, stock options, etc. Rewarding can be "soft", examples including recognition, promotion, publication, compliments, professional course, etc. Using Maslow's needs pyramid can help in designing the rewarding system. What I find important is to balance between the two, being sensitive and wise.

Any rewarding system, no matter how designed, should answer some principles in order to be effective:

  • Fairness. Living in a situation where other employees do understand why their colleague was rewarded and not them. Any rewarding system should aspire to reward individuals when the organization was rewarded significantly.
  • Answering the individuals' needs. No matter if the rewarding is for a team or for the individual, s/he has to be touched and motivated.
  • Balanced in scope. Too generous rewarding systems are not considered effective, and in some cases harm. To little yet communicated rewarding, will have cynical interpretations.
  • Flexible. Never pre-define everything. Always there are unexpected situations in which an employee should be rewarded. The rewarding system has to be flexible enough to answer these situations as well.
  • Stable. Do not change to often the rewarding system.

And most important-

  • Suitable. Fitting the organization's spirit.

I hope we all succeed rewarding our employees and motivate them to work properly and change when appropriate. At the end of the day, we have to remember, that rewarding is one of the most powerful management tools available.


To the Hebrew version

Thursday, March 12, 2009


Places of work are formal organizations; places in which there are importance and significance to authority. In the mid 50th, when classic management theories developed, the source of authority was clear and loud: Authority derived from organizational position. Every position had its status, and granted authority. IT was clear to each employee what is permitted and where boundaries stand.
Today, in the 21st century, terms of work have changed. The relation between the worker and in particular the knowledge worker and his/her manager turned more complicated and less definite. Also today, we are not speaking about a symmetrical relation, yet it is clear that the authority of managers is not as it was, and for sure does not derive from status and position alone.

Discussing authority includes discussion on two complementary aspects: Discussing source of authority, and discussing delegation of authority.

Delegation of authority, or delegation of power, is not the same as transferring responsibility. When I delegate the authority to decide or act to any subordinate manager or worker, they get the operational responsibility, but the managerial responsibility remains mine. One can delegate authority for permanent, for a temporary period, or as a one-time act, all affecting the responsibility of the employee. In all cases, however, the manager remains responsible.

Many managers find it difficult to delegate authority. In some cases, they literally do not pass any authority to take decisions, or even to act, that could be delegated, to their subordinates. In other cases, they do, yet continue to ask and interfere, not giving up control.
The difficulty in delegating authority can derive from several reasons:
Sometimes, we start working on a mission that indeed is part of our job, and continue on, even though it was correct to stop and pass the next stages on to one of our subordinates. This is the easier case, as awareness to this situation solves the problem.
Another reason has to do with the fact that we as managers, are usually more senior, more experienced, and hence, we feel that if we complete the task by ourselves, not passing it to others, it will be completed, faster, or maybe even better. I admit that from time to time, I also find myself in this situation.
A similar reason has to do with the energy we have to invest in explaining someone else what we want to achieve, how and why, and in being sure that we get that. We feel, that we prefer to complete the job by ourselves. In some cases, this may be the right solution, but the decision, has to be made, considering all aspects.
Sometimes, it is a task that we find more pleasant, and we wish to do it by ourselves.
In addition, sometimes, we are afraid. This has to do with the synonym of delegation of authority- delegation of power. This also has to do with the second part of this post, source of authority. We are afraid, that if we delegate authority, we loose power and loose source of authority. At the end of the day, we too, the managers, are human beings, and we wish to protect ourselves, whether consciously or non-consciously.

I can continue and add more reasons why delegation of authority is not as easy as one could expect. Yet, this is not the main issue. The main issue is that delegation of authority is important.
It is important to reduce our burden and navigate workload better;
It is important in order to develop the professionalism of our subordinates;
Moreover, it is important, in order to build trust between us and our subordinates, and let them know that we are willing to trust them and rely on them.

A few tips to do with delegation of authorities:
When you delegate authority, you must leave the employee who is in charge, some free hand, both freedom of choice and freedom of action. Do not guide him/her down to the last point and leave them to follow only.
When you delegate authority, do not totally let go. Remember that some guidance is required, and some control is requested. Remember that responsibility stays in our hands.
When you delegate authority, communicate it in the organization. Also, to ease on the operational level, but much more important, as a way to respect the person who is in charge. Soft rewards are critic in motivating employees.

The discussion on authority is not completed without examining the sources of authority. As I already wrote in the beginning of this post, the source of authority is changing as the concept of work and workers is changing. In general, the source of authority depends significantly on the manager's knowledge. Employees respect managers who know. This, of course, is not the only parameter to take in mind; employees will value a manager and accept his or her authority, if they understand what is required, and if the request and demands correlate with the organization's values as well as with their own ones.

How do these influence managers and their behavior? I am not sure.
However, in order to improve we all have to be aware of the changes in source of authority. Moreover, we have to understand that authority delegation and knowledge sharing strengthen us as well as our subordinates.

Plato, who lived many years before we started working in formal organizations, spoke about authority. He said: "The wisest have the most authority". Those who are smart, know, and have good judgment and keen discernment (definition of wise), are those who turn to be a source of authority.

It took us many years and various organizations' formats in order to go back to roots, and deeply understand his saying. There are probably good reasons, why this Greek philosopher, the student of Socrates, was one of the greater influencers on our Western philosophy.
Seeing how wise he was, he certainly was a source of authority.