Harder than most people think – News and Comment from Roy Lilley

Would it be a good idea to say to a nurse who has worked flat out; 'Well done and as our way of saying thank-you, here's a £50 voucher for Marks and Sparks...'
 
We might say to admin-staff; 'Join the lunch-time walking club, use the stairs, not the lift and we'll give you a day-off once a month.'
 
Incentives, bribery, payola, corruption... getting incentives working for you, is not as easy as it seems.
 
For people working at the bottom end of the economic ladder, the workplace is becoming harder.  Creating a workplace that encourages performance and achievement, depends entirely on the attitude and vision of the people running it.  
 
The people running the NHS get incentives wrong.  The misuse of regulation and inspection is the absolute antithesis of intelligent policies that, when they are patently sensible, become largely self-regulating and create an environment where it would be daft not to follow them.
 
Understanding the root-causes of why people don't perform in the way we want is to understand the negative incentives that are at work in large organisations; convenience, peer-pressure, dislocation, resource, engagement and lack of awareness.
 
Aligning the mindset of the people with the objectives of the organisation... what's wrong with rewarding them for doing the right thing.  We sure-as-hell beat them up when they do the wrong thing.
 
Organisational dynamics is a really interesting topic.  Some organisations work and some don't.... why?  Understanding performance is something that Charlie Munger has made a profession of.
 
Munger's legendary 'elementary worldly wisdom' as it became known.
 
Munger?  He's Warren Buffet's investment partner.  Some say the brains behind... when he speaks he is always worth listening to.
 
'...the system is responsible in proportion to the degree that the people who make the decisions bear the consequences.'
 
In our world the CQC bear no responsibility or consequence, for their decisions and cannot be challenged.  Hence they have no regard for root-cause and are free to make irresponsible judgments.  Time and time again, good people sacked because they can't recruit enough staff; that sort of thing.
 
Munger's work is at the heart of a very interesting paper on the role of incentives in organisations.  Getting the right incentive in place, to produce the right result.
 
Think of three types of work.  Freelance; paid for the work done.  Commission; paid on the success of the work done and being paid for turning up.
 
Agency staff get paid for what they do, with a freedom to come and go.  Senior managers get bonus payments, consultants, merit-awards.  Nurses get wages.  You can see where the incentives are and where they are missing. 
 
The NHS has made an art-form of negative reinforcement.  Just recently threats to social care over DTCs and fining Trusts.  
 
Punishment produces a fight or flight response; deception, gaming and lies... which inhibits the ability to learn from mistakes because people pretend they aren't making any.
 
A regulated environment, the opposite of an incentivised environment, makes people good at dealing with regulation, it does not make them good at the core purpose of the business.  
 
Hence, to avoid untrammelled criticism, Trusts are incentivised to spend time and money rehearsing for CQC inspections.
 
What are the alternatives to crude incentives?
 
Prompting and shaping.
 
We can prompt better performance by sharing best practice.  Once you have shown people what good looks like, the shaping takes place.  People take the idea, or best practice and shape it around their circumstances and the challenges faced by their organisation.
 
Once shaping begins, it becomes possible to leverage on small successes to build larger improvements.
 
If we want to improve performance and change behaviour we have to think about incentives.  They are not always money.  For professionals it is often dignity, self-belief, pride in a job-well-done, knowing they have done their best, training and 
improvement. 
 
To develop that environment, it becomes the manager's job to create the time and space for good people to do great things.
 
I'll leave you with Charlie Munger:
 
'People are trying to be smart - all I am trying to do is not to be idiotic, but it's harder than most people think...'

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