Target agreements: A game with fire

© Stauke –

06/2014 by Marcus Raitner

Regular readers know that I am not a great friend of motivation through monetary incentives.

I believe that people are in principle willing to perform and motivated if they consider their contribution and the overall project to be meaningful.

In order to clarify the question of how the individual motivation of the employee fits sensibly into the larger context of the project or the company and what the tasks of the employee should be derived from this, target agreements are actually a good management instrument. Like any tool, however, target agreements can and are often misused by coupled incentive systems in order to impose meaning on the employee from the outside. A game with fire.

Providing orientation is an essential task of leadership. To communicate the goals and meaning of a project to employees in dialogue is certainly a good approach. Unfortunately, many fail even before that because there is no deeper meaning than making a profit. However, profit and directly correlated measurement variables such as the workload of employees can never be the purpose of a company, but always only an indicator of the right purpose of the company. Accordingly, these parameters per se can never be an employee’s objectives, but at most a measure of the achievement of objectives.

As a kind of prosthesis of meaning, complex corporate visions are then developed. However, these empty words go unheard because they lack substance. Especially for large service companies it is a real challenge to find this deeper meaning and purpose of the company beyond capacity utilization, turnover and profit. The projects are chosen too arbitrarily and opportunistically to have a common direction. This is where real leadership begins. And this is where the art of agreeing goals begins.

The own clarity as a manager regarding the goals and the purpose are therefore a necessary condition for goal agreements with employees. The term „agreement“ is deliberately chosen: On the one hand the company, plan or project with its sense and purpose on the other hand the employee with his intrinsic motivation and his goals. The manager’s task is to mediate between these poles in the best possible way. Too often, however, such target agreements degenerate into mere targets. The basically fruitful dialogue about goals then simply turns into instructions. Self-determination and co-determination become external determination. Since autonomy is a central motivator for people, however, motivation suffers massively. To compensate for this, monetary incentives are offered. However, this kind of motivation only works with very simple manual activities and demonstrably has the opposite effect in the case of knowledge work.

The answer to the question managers so often ask of behavioral scientists “How do you motivate people?  is, You don’t.

Douglas McGregor

When used correctly, I find target agreements a good tool in principle. However, I am primarily concerned with the dialogical approach between the individual, his goals and his intrinsic motivation and the goals and purpose of the overall project. This is much more difficult and time-consuming than simply setting goals, but also much more appreciative and motivating. Objectives agreed in this way can then be provided with monetary incentives. These should, however, be designed as a bonus and not in the form of a variable salary component, which always has the effect of a mistrust retention and thus rather demotivates me.

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