As the Head of HR for SSP, a leading provider of IT solutions to the international insurance industry, Nick Paterson finds ways to boost the motivation of a global workforce of more than 700 people.
No easy task, of course. Nick is convinced, though, that many businesses could vastly improve workplace performance and satisfaction by replacing out-moded ‘reward and punishment’ methods with a more intrinsic motivational approach.
Nick’s ‘ah-ha’ moment happened when the keen cyclist was training in brutally icy conditions in the Yorkshire Dales, a short distance from SSP’s headquarters in Halifax. “It was -2C, with a wind chill factor of about -5C, and I was going up what is considered one of the hardest climbs in the UK,” he explains. “This may seem to be a strange place to have a ‘ah ha’ moment on motivation, but on reflection, that’s exactly what happened.
“As a HR professional, we often talk about ‘Performance Management’ and ‘People Engagement’ in the pursuit of the elusive, and some say mythical, high performance employee or team culture.So following this cycling event,
I looked further at some of the more current thinking around why on earth people choose to drive themselves to perform and achieve for seemingly no reward – the workplace equivalent of cycling up a hill in the freezing cold.”
Towards Autonomy, Mastery and Purpose
Nick is particularly influenced by the thinking of American author Daniel H. Pink, whose popular books about the changing nature of work include the New York Times bestseller Drive: The Surprising Truth About What Motivates Us, a 2009 release which draws on four decades of scientific research on human motivation to conclude that the ‘carrot and stick’ approach to management that worked successfully in the twentieth century is well past its use-by date. To increase employee satisfaction and productivity, 21st century workplaces need to develop strategies that embrace intrinsic motivation, Pink argues. While this conclusion is no surprise, Nick says many businesses are still struggling to find this alternative pathway, and many Motivation 2.0 conditioned managers don’t see the point.
Pink’s book refers to levels of motivation. Motivation 1.0 is about satisfying our basic animal instincts - food, security and sex. Motivation 2.0 relies on people responding to rewards (bonuses, promotions) and punishments (lack of advancement etc.), the default setting for many businesses, while Motivation 3.0 is about tapping into our desires to direct our own lives, learn, create and make a difference. Motivation 3.0 is typified by what Pink calls Type I behaviours.
Type I behaviours are made up of three factors:
- Autonomy (“The default setting for people is to be autonomous and self-directed,” Nick adds. “Interestingly, it is the current Motivation 2.0 carrot/stick approach that can lead to a decrease in autonomy.”)
- Mastery – Wanting to become better and engaging more with something that matters to you.
- Purpose – people naturally seek a cause greater that is more enduring than themselves (“There is now a move in some forward thinking businesses to create a balance between ‘maximising purpose’ and ‘maximising revenue’ – it’s that important,” Nick says.)
“In a nutshell, Motivation 2.0 is fine for ‘routine’ tasks such as working on a production line or in a repetitive call centre job, but it’s not great when any amount of creative, non-rudimentary, thought is required of the task,” Nick says.
“Type I behaviour, specifically aspects of autonomy, mastery and purpose, can have a tangible impact in the workplace if they are considered as outcomes of projects and activities. Even at its most basic level, this means that if we are following a Motivation 2.0 system, the evidence tells us we are not reaching peoples full potential or business performance potential.
“Some businesses are aware of this, some are blissfully ignorant, and some have not reached the point yet where they are ready to see this as a required step change in how we intrinsically motivate and engage our employees for improved performance.
“More importantly, there was no difference in the principle factors I was applying on my bike to those I would, could and should apply in the workplace.”
“Looking back to my ‘ah ha’ moment, I could see that intrinsic motivation was exactly the reason why I was freezing my ass off on a bike – I had autonomy in taking on the challenge (the hill), mastery (I use the term loosely as I’m very average on a bike) in that I was determined to become a better cyclist, and the purpose of simply proving to myself that I could do it.From Theory to Practice: SSP Stars
With almost 50,000 users in more than 50 countries, SSP is a market leader in the field of providing technology systems and solutions to the global insurance and financial services sector. Its customers include four of the top 10 global insurers, four of the top five UK brokers and two of the top five UK financial advisers.
Headquartered in Halifax, as previously mentioned, SSP’s workforce is spread across offices in the Midlands and the south of England, as well as in key posts in North America, Europe, Asia Pacific and Africa.As rolling out new HR strategies to such a diverse workforce will always have inherent hurdles, how is the company applying the above theories to performance management and engagement? Nick explains that the process has been gradual rather than a Big Bang, though the end aim is an integrated approach.
“I’m in no way suggesting you now walk straight into the board and say ‘we are upgrading, hold on tight,” he laughs. “We can, however, be practical, and as with any good theory, apply parts that work for us.
“Within SSP, we have found that considering autonomy, mastery and purpose as principles when thinking about or developing the frameworks, projects, policies, rewards, and everything else that impacts people has been really beneficial, but of course we need to be practical and consider the commercial imperatives as well.
One example is SSP Stars, a recognition scheme based on the principle that any employee can give an award to anybody else, no matter what their level, as long as there is reasonable rationale. Under the system, introduced across SSP Worldwide in April, awardees receive a certificate and a store voucher. A £25 award can recognise behaviour as simple as helping someone with a tricky piece of code or offering a hand to get a last-minute presentation together, while £50 and £100 vouchers are reserved for behaviour that has an impact on a team or department.
“This system has been very, very popular in terms of its take-up globally – in the UK, Australia, India, South Africa and the US,” Nick says. “Sometimes, when you introduce a new reward system, there are lulls, but this has been consistently used, and I attribute in part its success to the Type I behavioural factors considered in its development.
“The development of this scheme specifically looked at the principles of autonomy, mastery and purpose to increase its behavioural connection with people. The concept of anyone being able to award anyone else directly aligned to autonomy; from a mastery perspective, an employee is rewarded for a set skill or outcome; and purpose is very much aligned with our business goals around reward and retention, with a focus on rewarding values as part of the programme.
“SSP Stars provides instantaneous feedback in terms of positive performance, which is also intrinsically motivating, and that’s powerful.“We also ensured the awards were based on a ‘now /that’ approach – that is, now that you have done something, you get an unexpected reward. This is in contrast to an ‘if/then’ approach – if you do this, then you will get a reward – the latter of which is known to be demotivating in the long term and has very interesting repercussions for current thinking around bonus and commission reward structures, an issue Pink writes about in Drive.”
Facing Future Challenges
When the new reward scheme was first raised internally, some members of management were sceptical, to put it mildly. Nick says a survey prompted initial responses with a common thread of fear of loss of control. “The first three responses I received were: ‘Who signs this off?’, ‘Employees will abuse this, and it will just be their friends who get the rewards’, and ‘How do we keep track of costs?’” he explains. “It was very much ‘command and control’ thinking. We needed to get past that and stress that it was about real-time rewards and providing people with autonomy, because that is powerful.”
In the same vein, SSP’s Indian office recently held a ‘hackathon’, an intense coding session typically held over a 24 hour period in which programmers work together in a focused environment to nut out software solutions. The event aims to get results much faster than in a usual work setting.
SSP will next year consider how to apply the same principles to its bonus structures.
Nick acknowledges that SSP’s approach incorporates ideas already used in many businesses – but in a more focussed, integrated way. “I don’t think this is totally new – businesses have been looking at ways to promote a sense of purpose, for example, for years,” he says. “But what we are finding now is intrinsic motivation, which is about engagement as opposed to compliance, generates much higher performance. And, if we do this with a deliberate mentality, instead of piece-meal, it becomes more effective.
“Look at the elements you already have in your business – your vision, your purpose, your values, EVPs – that’s your starting point. Then it is about finding those threads, in terms of what the business is already doing, that meet the intrinsic motivation drive.”
Nick points to the increasing attention been given to similar ideas by prominent business thinkers and writers, such as leading international business speaker and author Gary Hamel, and The New Yorker staff writer Malcolm Gladwell.
Nick suggests that Motivation 3.0 could be a bridging tool between today’s baby boomer senior managers and younger workers snapping at their heels.
“It is my belief that behaviours emerge from systems, and, in time, I think we will start to see more businesses adopt a Motivation 3.0/Type I style operating system, or at least principles of it,” Nick says. “There are some clear alignments with how baby boomers are reaching an age where they are thinking about their purpose more and more. Baby boomers, who have been brought up with the Motivation 2.0 model, are reaching retirement and considering their legacy, so purpose for them becomes really important. What is their vocation? What are they going to leave behind?
“Meanwhile, younger generations want more autonomy and mastery in their chosen professions, and this is where current thinking on performance management often falls down. They also often want more instantaneous recognition – from a Millennial perspective, performance management reviews once or twice a year aren’t going to work.
"HR professionals are in a unique position to influence thinking in this space and help businesses to realise the performance and engagement benefits from this approach."