A serious majority of managers make one equally serious mistake in management. On one hand, they directly link employee compensation to productivity, trying to ensure that workers are always thinking about how to work more efficiently. On the other hand, they constantly ask employees about results, the reasons for not meeting targets, and what employees plan to do to meet or exceed those targets.
However, it is believed that the bonus or incentive portion of the salary already serves its purpose, and if an employee is not meeting the assigned task, it is either due to a lack of qualifications or because the task cannot be completed due to certain external factors beyond the employee’s control.
Both of these options fall under the manager’s responsibility, not the employee’s. The manager must either acknowledge their mistake in hiring someone who is underqualified or realize that it is unreasonable to ask the employee about their ability to counter uncontrolled external factors. In any case, if an employee’s productivity directly affects their well-being, any plans that the employee is expected to execute are not the employee’s plans, but the manager’s plans. The employee is already eager to do everything possible. “Top-down” plans are the metrics that the manager relies on, assuming that the employee is already highly motivated. Asking the employee “how long” makes sense only after it is clear whether the manager has done everything necessary to ensure that the “machine is running,” whether they have provided the employee with all the necessary resources, tools, and conditions. Have they helped the employee improve their skills? Have they figured out where the employee’s goals align with the company’s goals, and so on?
Or should we admit that bonuses and incentives don’t really motivate at all, and in cases of setting unrealistic targets, they can even demotivate? Wouldn’t it be better to give all employees a fair fixed salary and then, fairly, hold them accountable for meeting the set targets? So, should we choose between plans or monetary incentives? Just because most managers confuse motivation with stimulation doesn’t mean they’re wrong. After all, they are the majority, and we… democracy 🙂 And the majority is always right. Or not always? We have many managers who have received specialized “managerial” education, and if they did, did they manage to build their careers before actually becoming managers without absorbing the management culture as it is, with its bonuses and plans?
Even if there is a bonus system in place, it doesn’t mean it works as intended. It might be inadequate. Perhaps people don’t believe in it? Maybe the employees are not motivated by salary alone? Maybe, in addition to bonuses, there are other ways to help employees achieve their goals? Managers often mistakenly think that they just need to set up a bonus incentive system once and then step back, believing that plans will somehow take care of themselves. And if they don’t get accomplished, they think they just need to replace the employee. Yes, bonuses do provide motivation. But there are at least a dozen other factors involved in motivation alongside bonuses. Moreover, employee motivation accounts for only about 30% of overall business success. Bonuses should not be fundamentally included as tools for motivation. Bonuses are at most a component of the concept of “fair compensation”—essential for certain jobs, but not a motivator in and of themselves. Furthermore, purely bonus-based systems are rare. Usually, it’s a fixed salary plus a bonus. And for the fixed salary, you need to set a plan, because otherwise, there’s no point 😉. The manager should be the one calculating the bonus. Most importantly, the calculations should ensure that the bonus is paid out in some form. Otherwise, it means there was a mistake with the plans, the people, or other resources.
Most Ukrainian managers, who typically lack competent and experienced mentors—who, as we know, are usually representatives of Western culture—believe that people come in two types: motivated idiots with shining eyes and misfits who need to be kicked. They think that the main function of a manager is to… де. …find idiots and shout “let’s go.” The fact that the burning eyes fade over time with such an approach, and that the shouts of “let’s go” do not build a team, but… herd. Such “theorists” don’t even think about it. And yes, motivation is 30% of a manager’s job. Yes, a third of their tasks, along with dozens of others, ranging from administration and control to strategic management and public relations. Not everyone actually dedicates thirty percent of their time to this, relying solely on “automatic” systems, like bonuses.
(written in collaboration with G. Andreasyan)