The FASTForward Blog » The problem of incentives in knowledge work: Enterprise 2.0 Blog: News, Coverage, and Commentary

The problem of incentives in knowledge work

by Jim McGee

March 18, 2010 at 11:42 am · Filed under FASTforward'09

Image by The Value Web Photo Gallery via Flickr

I’m struggling with the issue of incentives in organizations trying to promote improved knowledge management and more effective use of new collaboration tools such as blogs, wikis, and the like. Invariably, after an early spurt of activity and experimentation with the new systems, usage plateaus and talk turns to devising incentive systems to promote more participation. Behind the talk is the assumption that we can treat knowledge workers as rational economic actors and that the proper incentives will produce the desired behaviors.

The problem is the raft of research demonstrating that we are anything but rational economic actors. Spend any time digesting the insights in such work as Dan Ariely’s Predictably Irrational or Daniel Pink’s Drive: The Surprising Truth About What Motivates Us, to pick two recent examples, and you conclude that most organizational incentive systems are naively designed at best and actively harmful at worst. While carrots and sticks might be marginally useful if you need to crank out widgets or insurance claims, they aren’t for any work requiring significant creativity or discretion. Yet, we keep trying to devise simple reward systems and wondering why they fail.

The underlying issue is that focusing on designing incentives feels safer and easier than dealing with the hard managerial work of sitting down one-on-one with the individuals and planning out how to integrate these new tools into the day-to-day execution of knowledge work tasks. As Tom Davenport put it so pithily in Thinking for a Living the default managerial approach to knowledge workers is to “hire smart people and leave them alone.” If the quality of knowledge work done by an organization is, in fact, a key differentiator in overall success, then this laissez-faire approach to managing knowledge work isn’t likely to be sustainable.

Behavioral complexities of knowledge work

There are actually two problems to be solved. The first is to get a handle on the behaviors that contribute to more effective knowledge work. The second is to understand what kinds of feedback will influence whether knowledge workers engage in the desired behaviors.

Consider the kinds of behaviors that you might see in an organization using its existing knowledge more effectively than average. Activities you might expect to see include:

Seeking out and finding experts elsewhere in the organization who can answer your questions
Experts in the organization making time to respond to questions they receive
Experts recognizing when repeated questions signal an opportunity for a new service or a deeper problem to address
Project teams experimenting with and adopting new practices such as After Action Reviews as part of their standard project plans
Individual knowledge workers revising their work practices to more easily find and incorporate previous work into new work

Multiplying examples would only reinforce the point that these behaviors are significantly more subtle and complex than those that find their way into typical incentive systems.

Rewarding something because it happens to be measurable isn’t going to help, even if that is the all too common response in organizations that have fallen hostage to empty dictums that “you manage what you measure.” You manage what you talk about. If that conversation can be boiled down to where the needle is pointing on one or two dials, then you live in a much simpler world than I do and I envy you.

In my world, there is a complicated and often mysterious relationship between what people do and what happens sometime later. You invest in getting to know the key people at a small software vendor. They get an email inquiry from a company interested in updating their approach to knowledge management that the software vendor forwards to you. You reply to the email, have a brief phone conversation, develop and submit a proposal over the weekend, and, three days later, land a substantial contract with someone you still haven’t met face-to-face. How do you map that into a performance measurement system?

Consider another example. A consulting firm is encouraging experts to submit their best work to a central document repository. Your call center expert responds and contributes an Excel spreadsheet used to analyze operating performance in an outbound call center. One of your smartest consultants (with an Ivy League Ph.D. in Applied Mathematics) grabs the spreadsheet for another call center project. Unfortunately, the Ph.D. mathematician doesn’t have time to discuss the document with the resident expert and proceeds to employ it incorrectly. Client damage control ensues. Is this a design flaw in the knowledge management system? A training problem? A developmental opportunity? Was it a staffing problem when our Ph.D was originally assigned to the project? What measurement system would signal this problem before it occurred? What measurement system would reveal the problem after the fact?

Focus on better feedback systems instead of incentives

You certainly want feedback systems that provide a picture of how knowledge workers in your organization are interacting with the tools and information you make available to them. Better yet, these feedback systems ought to let you detect and deconstruct patterns of practice over time. What you can’t get is a manageably small set of measures that you can reliably link to performance. You can’t operate on autopilot.

Two approaches come to mind. Both assume that individual knowledge workers have primary responsibility for figuring out how they contribute to creating value for the organization. Secondary responsibility for coaching knowledge workers through this effort lies with their immediate supervisors.

The first approach is to look for successful patterns of use within the existing knowledge sharing system. Use After Action Reviews or other techniques to examine and evaluate how a particular knowledge sharing opportunity played out.

The second approach is to add some basic instrumentation to the knowledge sharing system. Make it simple to count things like blog posts made, comments made, documents contributed, documents consulted, and pointers shared. Use that data to distill and identify patterns of practice worth emulating. For example, some knowledge workers might be adding value by connecting and integrating materials in the system to create new knowledge. Others might be helping by weeding out obsolete information or adding important caveats. There won’t be a single pattern of successful usage that all should emulate. It is much more likely that there will be multiple patterns. The managerial task is to help knowledge workers identify the patterns that they are most adept at, helping them refine their usage patterns over time, and monitoring the system as a whole to ensure that there is a good balance among usage patterns.

This is clearly a more complex and judgmental task than simply rewarding everyone for contributing more content. But it feels more suited to the actual complexities of doing and managing knowledge work in today’s environment.

Share and Enjoy:

Permalink

71 Tweets

82 Comments »

Jim AdamsMarch 18th, 2010 at 12:23 pm

I read with interest this post. I too struggle with how to implement appropriate “encouragement” in a knowledge worker situation (a large urban public health department). One tool that has worked wonders is the use of an After Action Review. In the disaster preparedness world this has become a required tool for all preparedness planning, training and exercising. It provides a way to objectively evaluate the “work” provided by a diverse group of individuals or agencies on an issue. A key feature is a written action plan to correct or address any issues that were identified in the review. While the emergency response format of an after action review may not have full applicability outside of an emergency or response environment, I do feel that it would help in evaluating situations as you pointed out in your post. More information on the Homeland Security program is here: http://hseep.dhs.gov

Jim McGeeMarch 18th, 2010 at 2:08 pm

I’m a big fan of AARs as a central feedback mechanism in complex knowledge work settings.. It’s rich enough to capture the nuances and the opportunities for change that follow on completing a project or other initiative.

Nick BoothMarch 18th, 2010 at 6:06 pm

Measure input to – count questions, because they drive knowledge sharing.

Jon HusbandMarch 18th, 2010 at 8:41 pm

Very well laid out. I think that the concept of rewarding people is very tenacious, and all too often serves as a proxy for ‘managing’. The questions and examples you have set in front of us are a good signpost to a way forward.

Jim McGeeMarch 19th, 2010 at 7:15 am

Nick – I like the notion of tracking questions as part of the feedback system. You’re absolutely right that it’s one of the drivers of effective knowledge sharing.

Steve ArdireMarch 19th, 2010 at 8:01 am

Terrific post Jim !

You nailed issue here i.e. “there is a complicated and often mysterious relationship between what people do and what happens sometime later…How do you map that into a performance measurement system? ”

Managing knowledge work in today’s environment is indeed a complex issue so my proposed solution would be add more proactive critical thinking http://bit.ly/5iLSTA to knowledge sharing + better feedback systems that perhaps could foster a better incentives system.

Jim McGeeMarch 19th, 2010 at 8:53 am

Thanks for the pointer Steve. Very helpful. How do you integrate the emotional element into your model? The more I dig into this area, the more convinced I am that we have to consciously integrate the rational and the emotional to have any real chance of success.

Joe McKendrickMarch 20th, 2010 at 4:23 pm

Great post, Jim. It brings back memories of early attempts at “sales force automation.” SFA was often imposed from above, and did more to disrupt employees’ workflows than enhance productivity. Plus, many salespeople both fiercely and tacitly resisted attempts to automate or capture what they saw as their competitive advantage. The experience with SFA provides lessons that you point to — work closely withe the knowledge workers to identify where collaboration and knowledge management systems can bring value to their jobs — and let them drive that process themselves.

Jim McGeeMarch 22nd, 2010 at 8:17 am

Joe

The sales force automation experiences are an excellent example of short-sighted thinking and design as you suggest. So little effort and attention to understanding the sales reps work and how to make it better and so much attention to command and control over a process that was poorly understood. So, how do we get to smarter efforts in the future?

Chris FoxApril 1st, 2010 at 2:25 am

Great post, Jim. You may enjoy this video from Daniel Pink if you have not already seen it: http://strategiccoffee.chriscfox.com/2010/01/incentivisation-may-harm-performance.html

Jim McGeeApril 1st, 2010 at 9:05 am

Chris,

Thanks for the pointer. it is an excellent video on Pink’s ideas