Incentivising the right behaviour

I’ve recently subscribed to a podcast called HBR Ideacast where luminaries from Harvard Business School talk to luminaries from elsewhere. Episode 76 which I was listening to on the drive home last night featured John Boudreau, the co-author of a book called Beyond HR, the new science of human capital. Mostly it was all just common sense – one of the "big ideas" was that you should incentivise things which are "pivotal". He uses the example of Disney Land – there’s not much point in incentivising the sweepers to sweep better – as they are already pretty good and if they did a bit worse, it wouldn’t be pivotal to the success of the enterprise. But if they did something about the queuing – that would be a different matter. Bonuses and performance management should be used where it really makes a difference and not in a blanket way. Simple, but not a bad conscience call.

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