Most of the people, when you ask them, admit that KPIs are not any useful at their organizations. They don’t motivate, they don’t change people’s behavior to any better way. In the best case KPIs are usually a formal metric, in the worst case a way how to punish people. In modern organizations, which are built on top of collaboration and teams, the need for individual metrics disappeared. So what can you do instead?
If you have a bit of courage, you may try this: ask all team members to distribute for example 100$. They can give it to any team member, but can’t keep it for themselves. In a very short time, you get a very honest feedback. If you ask people to give Kudos or appreciations together with that, it’s awesome. Problem of bonus distribution solved. There are companies which distribute the bonuses not only within one team, but across the whole organization. To the receptionist, CEO, sales, developer. Your choice. We make it very transparent, so the system will correct any weird behavior as exchanging bonus money within two people. In general this is more theoretical question. I haven’t seen it happen but it comes out anytime we talk about it with managers. I guess it indicates lack of trust.
Another way how to do it when your organization is more Agile is to give every month people some money to their bonus account, you can keep them of give some to the others. Each month the random person from your company rolls a dice and if there is a six, the money is yours and we start to build another jackpot. When it’s any other number, they just continue in moving money as appreciation. As no one knows when the money is going to be paid, they don’t game it.
Finally, I have to admit that I don’t believe in any money bonuses. They are not going to help with real motivation and the risk of side effect is higher than possible outcome. So I would kill not only individual KPIs but bonuses as well. You can achieve better motivation by giving people autonomy, responsibility and clear purpose. And you can help them grow with coaching. It takes more time and energy then do KPIs and bonuses, but it brings higher results.
Those pyramid hierarchical structures were not wrong in any way. They were the perfect solution to world industrialization and to the dynamics of business at that time. Most of the companies followed the best practices for a simple world, where problems can be classified as obvious, and applied a simple structure to address it. And it worked. Bosses got results. Companies started growing and became more successful.
The most common management tool was a carrot and a stick, because organizations believed that their employees are lazy slackers who can’t work without it. Most of the people were in a mood of tribal leadership 2 where the motto is “my life sucks”. Complaining all the time. Not happy, not motivated. Their only motivation to do something was driven by getting some bonus – a carrot, or because they were forced to – a stick.
Organizations are trying to create a process to describe everything, to have every possibility thought over. Companies create career paths and talk about motivation. They have spent months describing KPIs, but the more processes and specializations they had, the less responsibility and goal driven individuals they had. They were starving. They tried to cut on expenses, but that did not bring any long term success either.
The pressure on individuals to make themselves more successful, better, and smarter than others was huge. “What if my colleague is be better in the performance review?” “What if I am not promoted in two years?” It leads to a culture that emphasizes own goals over the organizational ones. Most of the managers and experts live in the third level of the tribal leadership model, where they believe that “I’m great, but you are not.” So they treat their employees and colleagues with little respect or trust. This leads to the leadership style of “leader-follower”, where the managers decide, and the people below them just do the job. No initiative is expected. People just follow the process and do what is ordered.
