In theory: Incentivisation

Charities don't generally work on bonus systems, but there are plenty of other professions where you're offered a little extra something to reach management targets. Take estate agents. Those pushy types in their fancy cars who possess the gift of the gab bring home a shedload of cash at the end of each month for selling an ambitious number of over-priced penthouses.

It's long been known that incentives, such as an estate agent's bonus, motivate workers to perform to their highest potential. If the reward is viewed as desirable by your workers, they will generally perform better. Cold, hard cash usually does the trick.

All very well for the private sector, you might say, but what about us cash-strapped charities without a penny to spare? Well, time is money, so why not offer extra holiday? Offering staff extra time off can be a very effective bonus.

Where does the idea of incentivisation originate? Let's go back to the beginning of the last century. Henry Gantt was an American management theorist who published his seminal book Work, Wages and Profits in 1910. Gantt, a factory engineer, was one of the first modern thinkers to realise the potential of financial rewards to change workers' behaviour. He conjured up the 'task and bonus' system for his factory employees, who received bonuses in addition to their usual day rates if they successfully completed their tasks for the day. Gantt then offered more money to those who performed their jobs faster.

Incredibly, production often more than doubled. Not forgetting management, he also offered foremen a bonus if all their workers met the required standard of production. He wanted to encourage them to ditch their supervisory approach to their workers and assume the guise of teacher. Gantt soon realised that genuine concern for staff - albeit a financially motivated one - and increased employee morale were two of the most important factors in good management.

Maybe it's time to ditch the stick and proffer the carrot instead.

- Emma De Vita is editor of the books pages on Management Today.

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