There is a running joke between economists and psychologists: Economists, have a model of a rational decision maker. Psychologists are used to people being emotional and less rational and try to understand that irrationality. So Psychologists say that Economists work with ‘Econs’ whilst they work with ‘Human beings’. (Fortunately, these two camps are starting to meet in a camp known as ‘Behavioural economics’).
However, what do management theorists work with?
When you look at the models of incentives and behaviours that are most common, payment by results, annual appraisals, incentives, stock options, let alone ideas such as “What gets measured gets managed” it is easy to believe that management work neither with ‘Econs’ or ‘Human beings’. Whilst the thinking that is said is about ‘Human Beings’, the dominant thinking in action is more towards ‘Econs’.
Perhaps they are ‘Hu-cons’ or ‘Employe-cons’.
Perhaps they work with some half way house that they say is about treating people as ‘human beings,’ but where they actually get treated by the management systems as an ‘Econ’.
Perhaps they are merely ‘Human resources’!
An example… of apparently rational behaviour…
Recently I was working with a client on their strategy. I helped then develop some milestones to achieve over the next 9 months. The person in charge of HR wanted these milestones (now called ‘strategic objectives’) to be put into the individual’s appraisal for the year.
Now on first glance, this seems entirely rational. But a moment’s thought raises all sorts of questions…..
I know what she is trying to do. But it is worth pausing a while before you read on, to consider just what she believe she is doing….
You see, I think it is worth questioning. If only to make sure that what she believe she is doing is what she intends, and for that matter what others, the executive, what.
So let is question it for a moment. You see it makes sense to ask the HR Manager….
- What is wrong with the behaviours at the moment? Why does she believe the objectives/milestones won’t be met?
- What process allows these to be refined and adapted through the year?
- Are they tied to incentives rewards or punishments? If so how? If not, then what?
- What is consequence or failure/ missing objectives?
- Who will decide the definition of each objective?
- How she will ensure the appropriate degree of stretch? And what is that?
- What about equity between people? Will they each have similarly ambitious targets?
- Who decides whether it is achieved or not?
- What do you get for an assist? Are they team or individual objectives ( ie one fails or all fail together as a team)
- What behaviour she is trying to encourage?
None of these questions are rocket science: yet all poke at the heart of the purpose of what that HR manager was trying to achieve, and provide a lens onto how she is trying to achieve it. Did she believe they were Econs? Was this a motivation tool? What behaviour was she trying to encourage. What method of management was she using? Or rather, what method of management was she causing her executive team to use on their line managers.
I am sure that she is a rational person. She has HR qualifications and has worked in the space or a while. She is experienced. She is using what is seen in most organisations as “best practice” (though it may only be common practice).
I know that the person who asked me the question felt uncomfortable about the idea because it clashed with the way the teams and people had worked up to now. My sense is that it was not right for these people, but that would depend on the answers to these eight questions.
For me this comes down to three important questions:
a) “What behaviours is this trying to encourage (and what was wrong previously)?”
b) “What model of behavioural change is this assuming?”
c) “Will it have the desired effect?”
Unless you have this clear, you should not start implementing such an approach, no matter how “standard practice” it is.
It still feels like management from the previous century, rather than a trusted relationship from this decade.
When I talk to executives who have managed changes in behaviours in an organisation, they have explicit models of how they wish to change behaviours.
But if the decision is made to do this, it is better it is an explicit decision, with the consequences fully understood, rather than the simple assumption that “this is the right thing to do”.