I came across an interesting post from a couple of professors from London Business School today, the post talks about rewarding decisions not just the results they create. I’m not sure about this. I think there needs to be a mix of results and behaviour but rewarding decisions can cause a state of analysis paralysis as people pay more attention to the rationale behind every decision.
Results can be driven by luck, timing, by poor decisions by competition and by a whole host of other factors. But results are outcomes and outcomes are crucial to an organisation’s success. If you’re rewarding decisions and your results keep suffering your not going to be in business for long.
At the same time if you’re rewarding results only people can take short term views in order to make success happen in the short term rather than long term (sustainable) success.
Companies need to blend a number of different factors to make sure their rewarding the right behaviours. Decisions and results are important, but so are other factors like supporting other parts of the business, innovation and depending on the business a number of different things.
At the same time companies need to reward employees with more than just monetary rewards on performance, providing a good working environment, flexibility, and overall a strong sense of mission and vision which employees can get behind and really want to deliver. You can’t put a price tag on that.
