Document(s) 6 of 13

As we developed our approach to analyzing organizations, it became apparent to us that organizations, like people, have different personalities and work in different rhythms. We were often surprised at how well some organizations seem to work under incredibly difficult circumstances, while others are continually failing to perform under much more favorable conditions. Why? And why do people in some organizations seem to throw themselves at their work with tremendous zeal, while in others, they come to work and do as little as possible? Why is it that some organizations have a vision that puts them in the forefront of innovation, while others are always lagging behind, not knowing where they are going? The ideas associated with organizational motivation help provide insight into why organizations and the people inside them behave the way they do.

For almost a century now, organizational analysts have pondered the issue of why some individuals are more motivated than others (Maslow, 1997). A great deal can be learned from this literature about the types of working conditions that support or hinder how individuals in organizations perform. Only over the past 20 years has interest shifted from simply understanding the individual’s role in organizational motivation, to some of the underlying personality aspects of the organization itself (Bloor and Dawson, 1994).

Although organizational motivation is manifested in a variety of ways, four primary concepts provide insight into the underlying personality of most organizations: history, mission, culture and incentives.

The first concept is the history and life cycle of the organization. Organizations, like people, vary in the different stages of their organizational life (Gupta and Chin, 1994). When they start up, there is often a state of optimistic euphoria, a belief that the resources brought together can do just about anything. While there are not consistent stages in an organization’s life that parallel the human life span, there are

stages that help to diagnose the organization and its culture. New or young organizations create their own unique patterns of behavior that are normally more informal than formal. In these organizations, roles and responsibilities are not delineated, few policy manuals exist, neither rules nor procedures are established, and there is an excitement normally associated with a new endeavor.

Motivation in these organizations at this early stage is driven in part by the experimental atmosphere that prevails. New entrepreneurial leaders often emerge, and there is a feeling that almost anything is possible. However, as these organizations mature, they begin to develop structures and rules. People are no longer free to make up their own ways of doing things. Roles and responsibilities are set. The excitement of newness fades and other motivational patterns emerge. As the context of the organization changes, it becomes imperative for the organization to change. We talk about organizational renewal or rebirth. If organizations do not renew themselves they become ill, and in the private sector, at least, they die.

While the metaphor of the organizational life cycle does not strictly hold true, understanding the history of an organization gives insight into what the organization is. The organization’s raison d’être, the characteristics of its founders, an understanding of its major milestones and organizational changes—all play an important role in shaping the personality of an organization and how it performs.

The second concept of motivation focuses on the role or purpose of the organization: its mission. Every organization has a distinct role or purpose that is manifested in its goals and objectives. In most definitions of the concept of “ organization,” there is an explicit goal orientation. Each organization creates, either implicitly or explicitly, a forward looking direction of what it wants to accomplish, a vision of where it wants to go, or what it wants to be (Allen, 1995). Some organizations are motivated by the opportunity to do good works or to provide services to citizens. Many NGOs are motivated by helping those in need. Other organizations, such as research centers, may be driven by prestige—the desire to be regarded as the best in their field. In the private sector, motivation might mean having a bigger market share. Organizational analysts recognize the important role mission plays in shaping and creating an organization’s personality, and as such consider it an important diagnostic consideration. Analyzing the mission of an organization offers insights into the organization itself.

Culture, the third concept, also provides a window to view organizational motivation. Organizational culture relates to the shared assumptions, values and beliefs held by organizational members These factors are at work, however subliminally, within the organization’s boundaries. The culture of an organization is rarely written

down, but it is definitely communicated to members and stakeholders in a variety of formal and informal ways. Analyzing organizational culture is critical in trying to understand the motivational forces that support or oppose change and improved performance.

Finally, the personality of an organization is shaped by its incentive system. For an organization to perform well, it must have mechanisms that encourage individuals and groups to work toward both its short- and long-term interests. These may include tangible benefits such as salary and bonuses, or less tangible incentives such as the freedom to pursue interests, or to participate in collaborative initiatives. Over the years, many studies have attempted to better understand the needs of organizational members to develop improved or alternative reward structures. What are the incentive systems and what do they reward? Understanding an organization’s incentive system is key to understanding its underlying personality (Gupta and Jenkins, 1996).

These four motivational variables are not necessarily independent of one another, nor are they necessarily the only factors that provide insight into the personality of an organization. Rather, they are simply important factors that help complete the picture of organizational performance and its underlying elements. The sections that follow explore the definitions and dimensions of these four concepts in greater detail, and look at how to go about examining them in the context of an organizational assessment.

HISTORY

Definition

An organization’s history is charted in its important milestones—the story of its inception, growth, awards and achievements, and notable changes in structure or leadership. But its history is told as well in its failures and near misses—the disasters, the things that almost worked, and the hopes and aspirations of leaders who tried to take the organization into new areas but were unable to gain either internal or external support. And while the evolution of an organization is sometimes revealed in formal documents and plans (strategic or otherwise), it is more often and more eloquently recounted through the unwritten stories that weave their way through the organization’s oral history.

Dimensions

Analysts notice patterns in the history of organizations. Since the early work of Haire (1956), the notion took hold that an organization’s history can be understood as a life cycle—that organizations, like people, experience identifiable stages in their evolution. While these organizational stages do not have the same developmental imperative of the human life cycle, using the latter as a type of framework was helpful to organizational analysis. Each stage in an organization’s life cycle has particular characteristics that help determine the underlying personality of the organization.

Basically, the life cycle of an organization encompasses a start-up or inception phase (birth), a period of growth and development (adolescence), a mature stage (adult), and, eventually, a stage of decline (old age). While these stages seem linear, organizations do not necessarily go through them in a linear fashion. Some organizations are constantly starting over after what might be termed “false starts,” while others mature and start to decline and then re-engineer themselves into a new organization. The notion of a life cycle gives shape to understanding the evolution of an organization, its stages of adaptation and change, and why it is performing as it is (Gupta and Chin, 1994).

We reviewed an organization that worked with communities to reduce poverty, in part by obtaining and distributing food from donor countries. About 10 years old at the time of the assessment, the organization was quite successful in its early stages, but more recently was experiencing serious difficulties (see Box on page 89).

Birth

At the beginning of an organization’s life, its personality is shaped by its newness. Everything and everyone is new and open to ideas. Everything needs to be created. Everything needs to be discovered by those working in the organization. How do we get things done? What is the best way to do this? In the early stages, there is often a leader who takes on a major portion of the responsibilities with respect to establishing the organization’s role, its niche in the environment, the ways of working, and a way for the organization to financially survive. This is a period when the personality of the leader can have an immediate impact on the organization. Many organizations in the early stages of development have inspirational leaders with vision and ideas. To succeed, however, the organization must translate these ideas into action.

Typically, this phase is characterized by informal communications and structures. There are relatively few rules or procedures, and people invent ways to accomplish their

work. Successful performance at this stage means continual growth of the organization and the recognition by its stakeholders that it is filling a valuable niche. Poor performance at this stage can mean an early demise. If the organization survives, it still may have to reinvent itself by refocusing what it is doing in order to become firmly established. Throughout this inception period when the organization is struggling to survive and succeed, the patterns of organizational behavior and personality are shaped.

Adolescence

If the young organization is successful and finds resources to support its growth, it enters into its adolescent stage. Growing pains are difficult; the informality associated with success in early stages gives way to more formal rules and procedures. There is a need for increased strategic thinking, and longer range planning and man-

agement for the organization to handle its successes. Typically at this stage, there is a need to involve more people in the management of the organization, as sheer growth and development make it difficult for the leader to juggle all of the responsibilities. The organization is often looking at expanding its services and products at the same time. It has tasted success and is feeling that it has a special place on the map of organizations within which it operates.

However, in this adolescent stage, various levels of resistance and conflict emerge as well. Internally, the call for more organization, rules, procedures and structure is met with resistance from those who flourished under the more free-wheeling birth phase. In some organizations, the adolescent stage is short and protracted, while other organizations seem to continually cycle within this phase. More dynamic organizations are continually seeking new niches and areas for growth and development. They explore new ways to serve their clients and stakeholders, and to create and recreate the excitement of their founding and growth. The downside, however, is that creating and recreating an organization is often inefficient, and there is considerable pressure to regularize and standardize practices to gain efficiency.

The organizational paradox is that the standardization, rules and regulations established to improve efficiency often discourage organizational members, thus creating the opposite of what was desired. The ability to navigate through a sea of favorable and unfavorable forces and to manage paradoxes becomes increasingly important at this stage. From the analyst’s perspective, we try to understand how well the organization balanced these forces and how this is affecting its performance. Is it on the road to real maturity?

Adult

By the time an organization reaches maturity, it is guided by set patterns of behavior, structure and rules. It often has a particular approach to its organizational role that is firmly embedded or institutionalized. Although this appears to be a stable time in the organization’s life cycle, there are certain pitfalls. If the organization becomes overly bureaucratic and rigid, it runs the risk of reducing its ability to respond to the changing needs of its stakeholders. This may lead to its downfall, or to the perception of those both inside and outside of the organization that it is failing to live up to its potential. On the other hand, more flexible organizations often re-engineer and recreate themselves at this stage of maturity. Some organizations constantly reinvent themselves and stay in this stage for a long time.

Decline

The final stage in the organizational life cycle is the decline. We have witnessed this stage in many government organizations, NGOs, and private sector businesses over the past 10 to 15 years. A number of highly dysfunctional personality traits within the organization are often found at this stage. If the organization had a history of early success, there is now an inability to recognize the new realities of poor performance. There seems to be a considerable amount of political infighting, scapegoating, cynicism, and commitment to old strategies. At this stage, you hear all of the reasons “why it won’t work.” The organization’s history is often dotted with a series of innovations, reorganizations and new approaches that were tried but “failed.” The organization is unable to bring people together and focus on overcoming their difficulties. Changes are viewed cynically. People are afraid to fail again.

We saw a great deal of this in the 1980s and 1990s in government organizations, both in developed and developing countries. After a long period of growth, the economic recession led to major decreases in the ability of government agencies to obtain the needed funding. New management techniques were introduced at frightening speeds. Government agencies needed to “do more with less.” There were new restructuring schemes, changes in work processing and in the use of information technology, and more focus on performance measurement. Many government agencies unable to change became more cynical and continued to decline. Some faded away; others received dwindling amounts of resources and continued to decline. Others adapted, were revitalized, and experienced a rebirth.

Data on History

The history of an organization is often not so easy to find in a particular place. At one level, it resides within the organization’s documents and hard data. The charter and early documents give some insight into early organizational thinking. We can determine relatively easily if organizations are growing or declining by looking at staffing, or at the amount of available financial resources. We obtain a picture by looking at the types of programs or projects the organization worked on. From this data, we can infer about the history.

We can also try to obtain oral history. How do people in the organization perceive its evolution? What do they think are the key milestones? How have these milestones affected the organization’s direction? Interviews can give insight into leader-

ship and changes. Similarly, they can provide an understanding of how people perceive organizational shifts at certain stages of development.

Assessing History

One aspect of an organizational assessment is to define the organization’s evolutionary stage and identify the characteristics associated with this stage. The various aspects of an organization’s evolution may give insights into its life cycle position and personality.

VISION AND MISSION

The vision and the mission of an organization emerge from important social, economic, spiritual and political values. They are meant to inspire and promote organizational loyalty. Vision and mission are those parts of an organization that appeal to the heart; that is, they represent the organization’s emotional appeal. They motivate people and draw upon staff and stakeholders’ hopes and aspirations. In this sense, the vision and mission of an organization provide inspirational motivation.

Clarifying the vision and mission are important in both private and public sector organizations. Private sector organizations often identify the importance of serving their customers, and have created visions and missions to support this theme. In the public sphere, schools, hospitals and even line ministries have begun to see their roles in terms of service to the public, and have developed vision and mission statements that support such ideas.

At issue for many organizations is not only to write but to then live the statements. When vision and mission statements are not lived up to, the result is not to enhance motivation but to foster cynicism. Assessing an organization’s motivation primarily involves looking at its mission, since this is more closely linked to what the organization wants to do. However, in examining the mission, the link to the larger vision, as well as more operational components, must also be assessed.

Definition

An organization’s vision defines the kind of a world to which it wants to contribute. A children’s organization with which we worked indicated that it wanted a world where “children were free from hunger and able to access the health, educational and social services they needed to become happy and productive citizens.” It was this vision about children that motivated the staff and led them to devise a more elaborate statement of the future they wanted. Visions lie beyond the scope of any one organization. They represent the hopes and dreams of organizational members. The vision describes the changes in the prevailing economic, political, social or environmental situation that the program hopes to bring about.

Missions, on the other hand, are a step in operationalizing the vision, an organization’s raison d’être. The mission is an expression of how people see the organization operating. It exists within the context of the vision, and begins the process of operationalizing the vision into more concrete actions. In this context, the mission lays a foundation for future action (Bart, 1997) and guides the organization’s choice of strategies and activities. Some of the main reasons for an organization to have a vision and mission expressed in clear statements are to:

• Promote clarity of purpose
• Function as a foundation for making decisions
• Gain commitment for goals
• Foster understanding and support for its goals.

Whereas the vision locates the organization within a cluster of organizations, it is the mission that answers the questions: Why does this organization exist? Whom does it serve? By what means does it serve them? Those responsible for the performance of an organization increasingly recognize the benefits of clearly and simply communicating the direction in which their organization is going. Such descrip-

tions of the organization’s future, whom it serves, what it values, and how it defines success can have a powerful impact on the organization’s personality.

Dimensions

Typically, organizations are founded when a prime mover identifies a need that is translated into an idea—a vision, and ultimately, a mission—and then into the desired product or service. The prime mover gathers people around to carry out this task. Some organizations are founded by other means, such as when a new agency is created by a government. But even in these cases, the founding of the agency can be traced to a prime mover. The point is that people who come together do not do so randomly. At the start, they share some values associated with the fledgling organization and often see something in it for themselves. Sometimes, not only does the organization indicate the services it wants to provide, but it also conveys a sense of mission. This is the idea of people coming together to do something that is particularly exciting and motivating.

Clearly, as organizations evolve, they need to create and recreate their mission. They need to spur their staff’s enthusiasm. Developing and articulating a mission involves two key dimensions. First, the mission can act as a baseline, something against which organizational members and stakeholders can assess the consistency, alignment and focus of their actions and decisions. From a technical perspective, a mission statement identifies the products and services provided: the clients or customers you are trying to serve; where the organization wants to go; and some articulation of organizational values (Calfee, 1993).

Second, the mission must inspire and motivate members to perform and encourage them to behave in ways that will help the organization achieve success. Organizational analysts increasingly suggest that members need to identify with the organizations in which they are working. The mission statement sets out some of the underlying values that define the organization and support the socialization and indoctrination process. Thus, a key dimension of the mission statement is to reinforce the ideology of the organization.

Data on the Mission

Today, mission statements abound in private and public organizations. You see them in the halls and on the walls of offices of NGOs, government agencies and the

world’s leading corporations. One of the reasons for their popularity is that they are the cornerstones of an organization’s strategy and business plan.

Organizations take a wide variety of approaches to expressing their mission. Some describe a detailed vision of the future and write a mission statement that summarizes this vision. Others summarize their mission in a slogan, a motto, or a single statement or phrase. Ideally, the mission is the written expression of the basic goals, characteristics, values and philosophy that shape the organization and give it purpose.

Through this statement, the organization seeks to distinguish itself from others by articulating its scope of activities, its products, services and market, and the significant technologies and approaches it uses to meet its goals. By expressing the organization’s ultimate aims— essentially, what it values most—the mission state-

ment should provide members with a sense of shared purpose and direction. The goals enshrined within a mission statement should serve as a foundation for the organization’s strategic planning and major activities, and provide a framework for evaluating organizational performance.

Assessing the Mission

Those seeking to diagnose and analyze the mission of an organization often find themselves dealing with multiple realities—those that are written down, and those that are perceived by organization members. One task in an organizational assessment is to determine the degree to which the formal mission statement is understood and internalized by members and stakeholders of the organization; that is, measure the congruence of the perceived and stated missions. In our own diagnoses, we try to understand if and how the mission is shaping the way that organizational members perceive the organization and its work. Do they help create an organizational personality that defines the organization and the motivation of its staff and stakeholders?

CULTURE

Definition

While the mission statement formally articulates organizational purpose, it is the organization’s culture that gives life to the organization and helps make the realization of its mission possible. The concept of organizational culture has been the focus of much attention, with analysts associating it with superior corporate performance (Peters and Waterman, 1988), increased productivity (Ouchi, 1981), improved morale, and high rates of return on investment. In an interview with the Harvard Business Review (Howard, 1990), the president of Levi Strauss stated:

We have learned that the soft stuff and the hard stuff are becoming increasingly intertwined. A company’s values—what it stands for, what its people believe in—are crucial to its competitive success. Indeed, values drive business.

Organizational culture is the collectively accepted meaning that manifests itself in the formal and informal rules of an organization or a sub-group. The culture embodies the collective symbols, myths, visions and heroes of the organization’s past and present. For instance, culture finds expression in the collective pride (and even embellishment) of the accomplishments of individuals. Values important to the organization are illustrated through stories about past successes and failures; these form a living history that guides managers and drives members’ behavior. Culture involves what you wear, how you address staff, and what is rewarded and punished. It is often not written. When individuals join an organization, in addition to learning about its formal aspects, they spend much of their time being socialized into the less formal aspects of organizational life—namely its culture (Hatch, 1993).

Dimensions

Diagnosing organizational culture helps us understand the relative levels of consistency or inconsistency of “meaning” that exist in an organization. In some ways, culture is like an iceberg; it has both seen and unseen aspects. From an anthropological perspective, culture has material and non-material dimensions. Culture has both physical artifacts—mission statements, policy guides—as well as basic beliefs that direct the thinking, feelings, perceptions and behaviors of the people in the culture. To know why

some people are in trouble, are rejected or punished, or are not appreciated by an organization, you need to know the belief system and norms that underlie the organization’s behavior. In this context, four dimensions of organizational culture can be identified: artifacts, perspectives, values, and assumptions (Bloor and Dawson, 1994).

Artifacts are the most tangible aspects of an organization’s culture. These are the physical aspects of an organization: the type of office, the logo, dress, rituals (Christmas parties), stories, language and so forth. Artifacts are the physical manifestations of the organization’s culture.

Perspectives are the ideas that people hold and use to act appropriately. For example, a perspective includes how the organization handles customer complaints or, for that matter, employee complaints. In some organizations, people go to great lengths to help customers obtain the products and services they say they need. In other organizations, customers are ignored.

Values relate to the ideals held by the organization, including concepts of standards, honesty, quality and integrity.

Underlying or basic assumptions are “the taken for granted” beliefs of an organization. This refers to what members of the organization feel is appropriate behavior for themselves and others. Since assumptions are considered a given, they are rarely if ever questioned. The set of tacit assumptions helps form the uniqueness of the organizational culture (Denison, 1996).

Data on Culture

Investigating the dimensions of organizational culture can be deceptive. The culture of an organization is not a single unified element. It can evolve, and may be different at different levels of the organization. In addition, every organization has several sub-cultures, some of which take on most aspects of the dominant organizational culture. Others exist as counter-cultures. Bate (1996) argues that it is a myth to think that an organization is a unified entity with a single culture. Rather, he argues that organizations have many cultures, all vying for dominance. In all organizations, there are predominant trends that may or may not be transitory. In essence, Bate and others argue for using cultural analysis as a way to gain insight into the organization. Understanding the cultural dynamic can help those conducting organizational assessments obtain a more complete picture of the organization.

Where do you find data on the organizational culture? In essence, cultural data surrounds the person doing the organizational assessment. It relates to everything

from how people treat people to what is posted on the walls. Thus a starting point for finding data on culture is to observe and feel how an organization works and behaves.

However, personal observations and perceptions one feels as a result of spending time with an organization are not the only sources of information. Clearly, the people in the organization have a wide assortment of information on the culture. Unfortunately, employees and managers are not always articulate or completely aware of the dimensions just discussed. In some instances, they might be aware of some aspects of the culture, but the culture inhibits them from expressing their opinions.

In summary, although culture is an important aspect of organizational motivation, obtaining accurate responses to questions about it can be difficult, and it remains an area that people are reticent to explore (see Box).

Assessing Culture

Those who study organizational culture argue that it takes time to diagnose and understand the culture(s) of an organization. While dominant themes might be rel-

atively easy to identify, an effective cultural diagnosis requires an exploration of sub-themes, sub-cultures and underlying assumptions that provide more profound diagnostic insights. The concept of organizational culture can provide diagnosticians with a framework for articulating how the culture of an organization contributes to its motivation and, ultimately, to its performance.

INCENTIVES

Definition

Incentive systems are an important part of organizational motivation and are central to helping diagnosticians understand the forces that drive the organization. Organizational incentives refer to both the reason for staff to join an organization, and the way an organization rewards and punishes its staff. Incentive systems can encourage or discourage employee and work group behavior (Allcorn, 1995).

Organizations must continually seek ways to keep their employees and work groups engaged in their work, motivated, efficient and productive. An organization’s success can depend on its ability to create the conditions and systems (formal and informal) that entice the best people to work there. Also, a good incentive system

encourages employees to be productive and creative, fosters loyalty among those who are most productive, and stimulates innovation (Brudney and Condrey, 1993).

Dimensions

What acts as an incentive for people and groups of people in an organization? Although money is a powerful incentive, it is only part of the incentive system within an organization (see Box). In fact, certain types of financial incentives sometimes reinforce behaviors that work against the interests of the organization. For example, financial incentives that promote individual achievement—such as merit pay for individual accomplishments—can work against building highly productive teams of people.

In general, incentives can be broken down into four main categories. The first involves the use of money. Different types of organizations can offer different types of incentives. Because of their ownership and ability to generate profits, private sector firms offer financial incentives that are often not possible in government or not-for-profit organizations. These include incentives such as pay for reaching productivity targets, bonuses for improved levels of profitability, and stock option plans.

In recent years, hundreds of workers (including secretaries and blue collar workers) in the information technology sector have become millionaires through stock option plans—a type of shared ownership used as part of the incentive system. People in these organizations were asked to work for lower than market rates in exchange for owning shares in the company. Workers reaped benefits far beyond their expectations, although they also shared the potential for loss. Sharing in the rewards that may accrue when an organization does well can be a powerful incentive to work hard and be productive.

However, some studies conducted in the private sector indicate that economic incentives are only part of an incentive system. People also want other types of incentives. They want to be praised for achievement; they want opportunities for advancement and learning; and they want increasing responsibilities to test their range of competencies. Over the longer term, employees want multiple incentives in their work place. So, although economic incentives are important in the private and public sector, more complex, holistic incentive systems also warrant attention.

A second dimension of incentives relates to more intrinsic factors such as values, security and working conditions. Many people have a strong desire to serve, and thus seek employment that has a redeeming social value, such as with NGOs or in public service. There are, as well, many businesses that provide goods and services for the “public good.”

Another set of intrinsic incentives relates to the conditions of employment. Some employees want to have security of employment and other noneconomic rewards such as flexible working hours. These conditions provide incentives for productive workers.

For some workers, their identification with the organization and the cause it serves is an incentive. This is most evident in mission-driven organizations, where motivation is often driven by the power of the organizational mission and other noneconomic incentives. Many church-based or development oriented not-for-profit organizations have strong mission service orientations.

Universities and research centers are other examples of organizations with service orientations. However, creating effective incentive systems in research centers in developing countries presents a daunting array of paradoxes. First, the staff is often highly professional and has technical skills that could command higher pay in the private sector market. Researchers, however, often prefer environments that value scientific knowledge and the recognition that emerges from peer review. They seek working environments that encourage wide communication and external stimulation, and that give them the right to decide what research should be conducted. The incentive system must reward their professional behavior in ways that compensate for the discrepancy between what they could earn in the private or government sector, and what they receive in the research center.

Whether they are generating new knowledge through research, working with the poor, or helping the sick, people in the not-for-profit sector are motivated by the calling of their organizational work. They believe in the particular nature of their work, and are often willing to give up some economic incentives for this “service.” Today, there is a great deal of publicity given to the good work of such organizations. International agencies support these organizations to foster the provision of servic-

es to hard-to-reach groups (the poor, rural, other disadvantaged groups). However, these mission-oriented organizations present similar problems to organizational managers with regard to incentives.

Creating incentive systems that support the efficient use of resources and motivate staff is difficult in any type of organization. The challenge is to find the mix of incentives that will motivate employees to engage in productive and efficient behavior. A further challenge is where to provide organizational incentives. For example, in the public sector, formal incentives are often centralized and beyond the control of senior managers of government agencies. Even the most creative senior managers in the public sector have difficulty managing the incentive system of their agency. This rule of the game is changing in some of the more progressive government agencies.¹

Data on Incentives

How can information be gathered about an organizational incentive system and the motivational needs of employees? One step is to obtain the documents regarding the organization’s salary structures and benefits. If possible, these should be examined in relation to the organization’s overall industry.

This only provides the tip of the iceberg, however. Incentives are also in the eyes of the individual. Thus, to obtain data on incentives, it is necessary to create ways to ask employees about the state of the incentive systems that exist within the organization. In some cases, this can be done through face-to-face interviews. However, we found that the best way to gather this type of information is through a combination of questionnaire surveys given to all employees and focus groups based on job category. The survey provides the information that can then be probed more deeply during a group interview or focus group.

Assessing Incentive Systems

What does all this mean for analyzing the incentive systems of an organization? First, it is important to understand the organization’s underlying incentive structure. In the private sector organization, economic incentives are an important aspect of the struc-

__________

¹See Osborne and Gaebler (1992) for some ideas about how this is occurring in the United States.

ture; in the public sector, the sense of service to the public is often central; and in not-for-profit organizations, understanding the extent to which the mission drives behavior is paramount. When examining the incentive structure, it is important to identify the specific aspects of the system that either support or divert attention from performance. Are the incentive systems providing the right mixture of economic and noneconomic rewards and punishments? Are they sending the right signals to the individuals and groups in the organization? If not, is there anything the organization can do to correct this, or is it beyond the organization’s control?

CONCLUSIONS

Each organization and the people within it are motivated to behave in ways that are predictable within that organization. But where does this come from? What are the forces that drive performance?

Organizations have different characteristics at different points in their history and may be motivated by different forces. Young organizations, for example, may be more open to change and re-engineering than more mature organizations. The mission of an organization can be a powerful guiding light, but it is important to determine whether the stated mission really moves people, whether it reflects what the people in the organization believe, or both. Organizational culture, a complex and layered system of values and beliefs, is difficult to diagnose (with all its sub-themes, sub-cultures and underlying assumptions), but is a powerful contributor to motiva-

tion and, ultimately, to performance. People are motivated to do well by a variety of incentives, the greatest of which is not always monetary.

Every organization is driven by a unique combination of energy that comes from experience, a vision of the future, some sense of shared values, and anticipated rewards. Taken together, these factors constitute organizational motivation. Understanding what motivates an organization can be a powerful tool in assessing and improving its performance.

Document(s) 6 of 13