The Semco Style 5 Principles to transform the way we work
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Points For Impact

Incentives and positive peer pressure improve employee engagement and performance.

For a company to excel, employees must be reassured that self-interest, not the company’s, is their foremost priority. We believe an employee who puts himself first will be motivated to perform. – Ricardo Semler


IN A NUTSHELL

The practice of organizations offering monetary incentives to improve employee performance has been around for quite some time. Although there is a marked improvement in performance, thanks to the incentive, the practice has been ineffective in bringing about lasting changes in behavior.

In other words, people do work towards attaining a set target in the hopes of reaping a reward, but once they receive the reward they tend to revert to old habits. In a study published in the Harvard Business Review, Susanna Gallani studied the relationship between incentives, peer pressure and long-lasting change and found that peer pressure was a more powerful agent of change than monetary incentives.

So, although people people are motivated to varying extents by cash rewards, it’s peer pressure that helps them sustain their new ways of working. Teams that hold each other accountable and develop a single-minded focus towards achieving the monetary reward, it’s bound to be much more effective than people individually striving towards goals and rewards.

Such an outlook helps people to not just improve their efficiency at work, but to also stick to those new found ways of working. Much like the dynamics in a group fitness class, work groups that have positive peer pressure tend to achieve more with less management; they learn how to optimize their resources to improve efficiency; and they encourage each other to stick with it.

 
 

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