From Financial incentives can spur us to success—up to a point.

When the stakes get too high, performance can suffer, according to a new paper from researchers at California Institute of Technology. By studying brain-scan data of volunteers performing a basic motor task (controlling an object on a screen) for money, the Caltech team found that once the incentive for successfully completing the task hit a certain threshold, the brain's reward center began to shut down, a response tied to loss aversion.

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http://online.wsj.com/article/SB10001424052702304371504577406413713371208.html

We have found that paying around 1% to 1.5% of pay as incentives is the “Goldilocks” number and that paying 3% or more does not produce additional results.

This study shows what can happen when activities become learned and the incentive no longer is effective or participants become risk averse.  One easy way to re-engage your employees is to include “random intermittent reinforcement” (brief games of chance producing a random number of points) within an incentive program.

Summary of study: http://www.sciencedaily.com/releases/2012/05/120509140003.htm

Copies of the study can be purchased here: http://www.sciencedirect.com/science/article/pii/S0896627312002887

http://www.offcenterinsight.com/2/post/2012/05/contact-centerfold-of-the-month-may-2012-callogix.html

For those unfamiliar with the concept of “the power of small wins,” it is discussed in the Harvard Business Review article, “The Power of Small Wins” by Teresa M. Amabile and Steven J. Kramer.

READ THE ENTIRE ARTICLE AT CONNECTIONS MAGAZINE: http://www.connectionsmagazine.com/articles/2012/reduce-new-agent-turnover.html

In July of 2010, the management team of the Silver Grill Cafe located in Fort Collins, Colorado implemented a Snowfly gamification-based employee incentive program with the expectation that it would motivate participating wait staff to sell more of specific menu items (Wikipedia defines gamification as “the use of game design techniques and mechanics to solve problems and engage audiences.”) As part of the program, participants were awarded with the opportunity to play online random-point-yielding games when they sold a fresh-squeezed orange juice or a 4-pack of cinnamon rolls. Participants could then convert their points to dollars by placing them on a personal VISA® debit card. Upon comparing sales figures in months with the gamification-based employee incentives versus those months without them, it is estimated that the Silver Grill realized an ROI of 66.2%. This means that for every $1 dollar they invested in their incentive program they received an additional $1.66 in revenue due to an increase in sales of the targeted menu items.

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Here’s a heartwarming story about the human spirit that you may find hard to believe. I promise you it is true!

I have seen many management fads come and go in my 40-year career as a human resource manager for PepsiCo and Texas Instruments and as a professor of management at Southern Methodist University and the University of Wyoming.  My corporate experience has always led me to question whether or not this or that “flavor of the month” can actually have a meaningful application in the real world, while my academic background has trained me to be skeptical of everything. Peer-to-peer recognition is one of the newer management trends I have been hearing about, and I admit to a dash of dubiousness.  Then something happened that rocked my world.

Read the complete article: HERE