Incentives always get you less

Managers believe people need incentives to ‘motivate’ them to do good work. If only managers knew – incentives only motivate people to get the incentive, regardless of the impact on their organisation. Worse, incentives de-value the task. Psychologists know that if you put two groups to work, give one group an incentive and the other nothing, then call a coffee break – the group with the incentive stops work while the group with no incentive carries on with the task.

In a recent newsletter I wrote about how sales incentives for front line staff had no impact on sales; instead these incentives drove waste into the system. In many organisations we have helped managers take out incentives but first they have to understand how and why they are a primary cause of waste.

Why do managers believe in incentives? I think it is a mixture of laziness – ‘let them make their pay through meeting the numbers I want’ – and ignorance. Managers cannot see the real consequences.

Learning to ‘see’

You may know there is no evidence to support the view that leaders should have missions, values, situational sensitivity and all the other junky stuff they get taught on ‘leadership’ programmes.

I think learning to ‘see’ is the first step to being an effective leader. For example learning to see the real consequences of incentives, the adverse consequences of targets and other arbitrary, top-down actions. Learning to see waste and its causes leads quite naturally to designing work in better ways, something else that needs to be ‘seen’. When leaders have learned to see such things and talk about them with the people who do the work with a view to changing them, people follow. And that, I believe, is the best way to conceptualise leadership – do people follow you?

When leaders behave this way they ‘lead learning’ and people who follow them start solving problems the leader doesn’t even know about.

Destroying morale in the public sector

The Audit Commission has published a report warning of disillusionment with endless targets among public sector workers. The report remarks on the exodus of ‘worn out’ public sector staff.

The report showed stress was the biggest single reason for the exodus, and stress was being caused by excessive bureaucracy, paperwork and targets. Many public sector workers felt their work was increasingly driven by what could be measured instead of what mattered to their customers.

Government has got it 100% wrong. Dictating a change from the outside ensures compliance, not learning. To dictate such a change with the wrong measures is, quite simply, disastrous. Public sector workers find themselves serving a bureaucracy that provides no value to them in doing the work. As a consequence the work itself loses its value. In turn, public sector workers become demoralised. Is that the purpose of Government?

Sir Andrew Foster, head of the Audit Commission said the report pointed to the need for public sector managers to improve the way they manage their staff. Of course he and his burgeoning inspection empire are a major part of the problem. But this is something he cannot (or won’t) see.

Making targets in the health service

A reader writes:

‘My wife is a surgeon and head of service so deals with hospital managers as well as the public. She tells me this sadly believable story of the effect of government targets.

The target for elective operations is to have fewer than 1% cancelled on the day of the operation. The key point is ‘the day of the operation’.

Cancellations can of course be caused by a myriad of factors from variation in operating times to staff shortages, equipment failure and so on. Bed shortages are a main reason, slightly more predictable than others.

Managers are now guessing whether beds will be available a day ahead, and they will cancel an operation the day before so that the target figure is not affected if there is a bed shortage risk. Quite often, of course, they are wrong and a bed comes available, but by then the patient has gone away so that the productive capacity is unused. Someone stays on the six month waiting list who could have been treated.

If you have a chance to read the hospital league tables, the results are instructive. On something like 8 out of the 10 targets almost all hospitals pass, while many or most fail on the other 2. Even the misguided targets are failing to distinguish performance.’

But we know its all c**p

Waiting to speak at an NHS event, I listened to a senior civil servant tell the audience that there are ‘three star’ hospitals he would not send his children to and ‘one star’ hospitals he would be pleased to use. So we assume they know at the highest levels that the current rating system is wholly unreliable. What do they do? Carry on regardless. For the civil servants to voice the truth will be career-limiting behaviour.

He also told the audience ‘not to expect those in the Modernisation Unit to have the answers to how to improve’. So what is their purpose? I guess the answer is to impose arbitrary, opinion-based top-down edicts on the poor demoralised people who work in our NHS. Is this modernisation?

Leaders just deny and blame

This month we have seen more frightening evidence of the dysfunctional consequences of targets in the health service and education. How do ministers and their agents respond? In both cases they claimed the problems and/or miscreants are small in number and promise to root them out. It is to deny and blame. In fact the problems are ubiquitous and are natural consequences of the system – and that is the responsibility of the ministers. We live in a Stalinesque world; government has got it wrong but you cannot question government.

Review of measures avoids knowledge

This summer the targets for public sector housing were reviewed. A mole sent me the review contacts and so I sent in evidence of how different measures used in a different way had produced outstanding performance improvement in housing repairs, voids allocations and adaptations.

I didn’t hear anything. Last week I was told the reviewers are now sending out information on paper rather than e-mail as ‘Last time a consultant got hold of the document and their involvement was not welcome’.

It fascinates me. The purpose of the review is to ask which targets should we have, not ask ‘what do we know about what works’? To report that targets are not working might mean the last time the reviewer (an academic) gets a contract from government.

Lord Goldsmith gets it right!

Lord Goldsmith, the Attorney General, has run an experiment. He has been putting prosecutors to work with policemen on ‘what good looks like’. The result? Better processing of criminals (less waste) and better conviction rates where appropriate. We did this with a Scottish police force last year. It makes me wonder: are his people reading the Vanguard web site? How cool.