A blend of push and pull tools works best to motivate a team and shape behavior . Push tools, such as compensation plans, performance measurement systems, annual budgets, and the like, motivate people through authority, loyalty, fear, and expectation of reward for productive work. Pull tools, such as a compelling vision, inspire people by invoking a positive and exciting image of the future.
The particular mix of tools you use will depend on your assessment of how people on your team prefer to be motivated. Your high-energy go-getters will probably respond most enthusiastically to pull incentives. With more methodical and risk-averse folks, push tools may prove more effective.
How do you go about combining these two types of incentives? You have several options. A baseline question to ask yourself is how you will want to reward team members for achieving goals. What mix of monetary and nonmonetary rewards will you employ?
It is equally important to decide whether to base rewards on individual or collective performance. Do you need a high-performing team, or is a high-performing group enough? The distinction is an important one. If your direct reports work essentially independently, and the group’s success hinges chiefly on individual achievement, you don’t need to promote teamwork and should consider an individual incentive system. If success depends largely on cooperation among your direct reports and integration of their expertise, true teamwork is essential and you should use group goals and incentives to gain alignment.
Usually, you will want to create incentives for both individual excellence (when your direct reports undertake independent tasks) and for team excellence (when they undertake interdependent tasks). The correct mix of individual and group rewards depends on the relative importance of independent and interdependent activity for the overall success of your unit. (See “The Incentive Equation.”)
Designing incentive systems is a challenge, but the dangers of incentive misalignment are great. You need your direct reports to act as agents for you, whether they are undertaking individual responsibilities or collective ones. You don’t want to give them incentives to pursue individual goals when true teamwork is necessary, or vice versa.