In the legendary story, a farmer needed to get a donkey to pull a cart. He could either lead the donkey by dangling a carrot in front of it, or drive the donkey forward by hitting it from behind with a stick. Often, we apply this metaphor to people and simplistically conclude that all we need to do to motivate others is create appropriate “carrots” to reward good behavior and “sticks” to punish bad behavior. Although this metaphor may suggest two straightforward paths to motivating employees to comply, the use of overt incentives (carrots) and disincentives (sticks) usually induces only short-term changes. Other factors need to be taken into account. As Pulitzer Prize winning novelist Jane Smiley noted, “In my experience, there is only one motivation, and that is desire. No reasons or principle contain it or stand against it.” A chief compliance officer (CCO) seeking to guide appropriate behavior therefore needs to weigh a variety of factors as he/she designs and implements programmatic incentives and disincentives.
This post considers how companies can use “better carrots” to help cultivate an intrinsic commitment to compliance within their ranks. Think about the following ideas.
Take into account what motivates individuals, not just “employees”
You probably don’t do your job just for the money, so it would be naive to assume that your employees are primarily motivated by things like salary and bonuses. Although earning a living is an important part of working, studies consistently show that employees (especially Millennials) tend to be more motivated by having a feeling of purpose, a sense of autonomy, and an ability to meaningfully contribute. Importantly, what inspires and energizes one person will not necessarily do the same for another. Accordingly, give employees a variety of opportunities to feel like they are an essential part of your company’s commitment to compliance. For example, include employees from diverse levels on local “compliance committees” and/or issue corporate communications that emphasize the contributions of individuals from different departments and geographies to the company’s reputation of integrity.
Provide employees with the resources they need to succeed to comply
For any employee to feel successful, he or she must (a) understand what he or she is supposed to do and (b) be able to reasonably accomplish the given task. When it comes to compliance, this means providing participatory training to employees that allows them to understand their responsibilities and develop the skills needed to comply. It also means giving employees the necessary resources (including management’s time) for compliance. For example, if employees are required to obtain management approval before hiring outside agents, but managers are always too busy to review and sign approval forms, employees may become frustrated in their efforts to comply and simply cut corners.
This may appear to be a primarily extrinsic motivator, but it can also serve the important intrinsic purpose of helping individuals feel like valued and respected employees who are making a difference. The simple words “thank you” should be a liberal part of every manager’s vocabulary. For example, an employee who handled a delicate situation with customs brokers who demanded bribes, even in the face of potential business losses, would appreciate hearing, “Thank you for the extra effort you made to find a customs broker who could represent our company ethically. You helped build the reputation we want in this country.” Consider highlighting specific, positive examples in a company at team meetings, not only to express appreciation to particular employees, but also to encourage emulation by others, thus helping build a spirit and culture of compliance within your company.
Create continuous feedback loops
Committed employees want to contribute to their work community. Encourage employees to think about compliance, take initiative, and share their ideas. For example, distribute periodic surveys to employees to collect their thoughts about the compliance program and how it can be better operationalized – and then discuss the results of the survey and next steps at available opportunities, so that employees know their voices are heard. When employees individually or collectively make suggestions, react positively to the fact that they are thinking about improving compliance and participating in the dialogue (even if you are skeptical of the idea presented). Nothing will kill an employee’s desire to contribute more quickly than having his or her initiatives shut down curtly.
Use extrinsic rewards fairly, equitably, and transparently
Extrinsic rewards do have a role in motivating compliance, so long as they are directly linked to performance. Providing cash bonuses, certificates, or special perks (like an extra vacation day or a coveted parking spot) can contribute to a feeling of well-being within a company. But rewards will only motivate compliance if they are directly linked to clear criteria. Both giving excessive rewards for meager efforts and giving meager rewards for tremendous efforts can actually demotivate compliance, since the rewards mechanism will be viewed as suspect. For that reason, consider carefully what standards you use when deciding to present extrinsic rewards:
- Should rewards be offered to teams or to individuals? Rewarding an entire group may encourage teamwork, but it may also discourage individual initiative.
- Should qualitative or quantitative criteria be used? If awards are based on qualitative information (e.g., anecdotes submitted by supervisors), some teams or individuals may receive more credit than others simply because of personality differences. Quantitative criteria may appear more fair, but may be more difficult to define.
- How can “quiet compliers” be identified and rewarded? It is often easy to appreciate the efforts of individuals who – by nature of personality or job function – are more visible, but a fair reward system needs a way to identify all individuals who demonstrate a commitment to compliance.
A forthcoming blog discusses the other side of the equation (or end of the donkey…): sticks.
Ethics Connect: The value of compliance
Developing meaningful stakeholder engagement to successfully manage risk
How an Ethical Culture Can Drive Better Business Performance