Strategy Time to think creatively about worker engagement - Financial Post

Strategy Time to think creatively about worker engagement

Mitchell Osak
Jan 24, 2012 – 8:52 AM ET

EXCERPTS:


Companies need to more deeply consider the important role of peer comparison when designing compensation and measurement plans.

You don’t have to be a psychologist to know that people instinctively measure their own standing, satisfaction and performance relative to others. In a variety of studies, Harvard Business School professor Ian Larkin found this trait is the most powerful workplace motivator.

According to Prof. Larkin, when it comes to “deciding how hard we work and how well we think we’re performing, social comparisons matter just as much [as financial incentives].”

Comparing themselves with their peers incites employees to work harder in order to be recognized or to maintain prestige. Absolute compensation does matter, but only to a point.

This research has significant ramifications for talent management. Companies need to more deeply consider the important role of peer comparison – now supercharged thanks to social networking – when designing compensation and measurement plans.


Mitchell Osak is managing director of Quanta Consulting Inc. and can be reached at mosak@quantaconsulting.com.


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