The principle of foreign exchange – 6 mistakes motivators make

foreign exchangeIn the first article in my Flipping the Switch series, I wrote about a sales manager frustrated with a top performer on his team (article here). The problem came about because the sales manager and the salesperson in question were after two different things.

The article immediately before this one (the Principle of Positive Balance) I likened a working relationship to that of a bank account. Leaders and managers build a positive balance in their associates and employees by what they do. I admit, a prime objective of this is so we will have a reserve to draw down  in the event of a problem, emergency, or crisis. Too many of us try to function with a near zero balance, always at risk of overdrawing, which places undue and unnecessary stress on the relationship.

The Principle of Currency of the Domain means that you are making investments in things that are of perceived value to the associate, staff member, and employee. The operative word here is perceived. It is simply not enough that we offer incentives, rewards, inducements, values, or anything else intended to incentivize the people who work for us.

It is their perception that matters, not just yours. Oh sure, you can mandate that someone respond to something we offer, but don’t be deceived that they will feel the same way about it just because you say they should. Trying to do that is tantamount to announcing that the beatings will continue until morale improves.the-beatings-will-continue-until-the-morale-improves

In 2012, Lowe’s Home Improvement Centers suddenly eliminated spiffs and commissions for their sales specialists. Especially hard hit were the appliance people. For most of them  their take home income dropped by tens of thousands of dollars. The store explained the sudden change like this:

We know that having an irregular income can be challenging for you to manage because you do not know what each pay check will be. So, to make it better for you we’re eliminating those pesky spiffs and commissions. We will take the total spiffs and commissions you earned for the past 12 months, divide that amount in half, then divide the sum by 26 and add that amount to your pay. After all, we all have to sacrifice for the good of the enterprise.

When the new wage structure was explained to the sales specialists, the manager of more than one store said it was “a positive move going forward.” Large numbers of experienced, productive sales specialists summarily left the company. Why? They did not perceive it as a positive move going forward.

You must reward people in the currency of their domain. It must be something they value, something they can understand and appreciate. In one episode of MASH, the American TV series about a mobile army hospital in Korea, Dr. Charles Emerson Winchester tried to pay a debt with a porcelain vase. The good doctor saw it as a valuable antique piece from an ancient dynasty. The man he owed the money to saw it as a simple dime store pot. What one placed a high value upon the other saw as virtually worthless.

When people work for us, we are indebted to them. They work BEFORE they get paid so we are always in arrears to them. But the curious thing about working is that workers put in more than time. They invest talent, skill, personal worth, and long-term viability with us. When we motivate them we can never forget he sovereignty of THEIR domain and the need to conduct transactions in “currency” acceptable as a medium of exchange in their kingdom.

We have given a lot of thought and written millions of words on the subject of empowerment. It became a corporate mantra for a while with managers and leaders falling all over themselves to assure everyone that they were committed to empowering their people. Sadly, few considered the currency of the domain. FYI – This is a major problem with marketing too. We package and present products we think the customer ought to like. Manipulative people are really, really guilty of this and resort to a number of devices to get people to do what they want those people to do, all along chanting that this is being done for the good of those people. Politicians are particularly inclined to this.

So, what and where are the pitfalls? I have listed below 6 mistakes we make to remember when setting up a foreign exchange bank in your head.

  1. Assuming education equals ability. You may have an advanced degree but that does not make you smart enough to manage people. If we are not careful, advanced years of formal education can blind us with an intellectual elitism. We tend to think of employees, associates, and staff as less intelligent, less perceptive, less understanding. We tend to expect them to allow us to determine what’s really best for them. We must replace that with a higher degree of respect for those who work with us. If we do not we can never understand why they are not as motivated as we think they should be if only they would listen to us. We might then be genuinely convinced that “this is a positive move going forward” when we’ve instead seriously impacted their health and well-being.
  2. Ask people to sacrifice their advantage for your benefit. Sacrifices are for real battles fought for country or for noble causes in charity, religion, and non-profits. Even then the individual must perceive some value and reward. For most of us, the people we employ need a job. They’ve probably believe they’ve made enough sacrifices and are looking to a positive cash flow.
  3. Assume they are stupid. They aren’t and can see through it. When Lowe’s made its decision they apparently never assumed that people could readily and cynically see through the gloss to the bitter reality that while the suits in North Carolina would get more, they were going to get less.
  4. Try to rationalize. See #1. It only makes us look stupid when we try to do so. Just tell it like it is, empathize with those for whom our actions will have an impact, and do the best you can to fix it.
  5. Forget that the reward or incentive must mean something and continue to mean something. Never be guilty of neglecting to build the future on the foundations of the past. If you have a top performer, it does not hurt to continually laud achievement. Too many managers and leaders neglect that communicating instead that “I know you had a good week last week but what have you done for me today.” This does not motivate to do more. It communicates that one has never done enough. Our associates and employees will not keep reaching for the carrot just out of reach inconsequentially. At some point they need a bite.
  6. Failure to personalize everything. They are not going to do things “for you” for very long. Eventually they will personalize everything. Americans are particularly independent. Call it self-centered if you want, but it is human nature to seek out personal advantage. Remember WIIFM – What’s In It For Me. Associates must know that somewhere there is a personal benefit. If not, your efforts are only attempts to manipulate.
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