Providing Incentives: CG7

The Compact

Organizations need to be staffed. People need work: they need an incentive to accept employment work or to choose one offer of employment above another. So organizations have to provide incentives and management must identify, select and use suitable forms.

The reverse is also the case: an organization needs an incentive to employ a person. So provision and acceptance go in both directions. When there is a meshing of incentives offered and desired by both the organization and the employee, the organization and the employee become willing to be mutually obligated.

This mutual obligation is more than the legal contract that is signed. It is a Compact that is agreed. It cannot exist without the formal contract but it is built with explicit and implicit understandings that alter and accrete during employment. The literature refers to the «psychological contract», and this must be taken to include verbal and written exchanges during work.

Providing incentives in a sensible fashion is a continuous affair. Almost from the outset incentives, both large and small, are adjusted or removed or added to by both sides. But management is most concerned to induce employees to commit to the organization-CG6 and to be flexible-CG5 within that commitment. Examples are provided here.

Function: 

The compact provides the basis whereby both parties signify a willingness to trust in the fulfillment of commitments: explicit and implicit, in regard to both benefits and obligations of continuing employment.

Focus:

Getting and retaining good people. Organizations compete for the best employees. Employees compete for good jobs in good organizations. Conflicts of interest arise at the higher levels.

Implicit Expectations

However, as this framework reveals, there are many mutual expectations in a thoughtful compact, some or most of which exist in an unstated form.

The basic expectations, from which all others are derived, were identified at the outset as the CG1-elemental means of achievement.  There they were discrete, while here they combine to constitute «agreeing a compact».

Agreeing the Compact-CG7¹ implies all seven means are simultaneously relevant.

► CG7¹₁: An expectation to take action deliberately
i.e. agree the compact, because: acquiescence is a deliberate action that leads to a flow of further actions in regard to work for both parties.
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► CG7¹₂: An expectation to be accountable formally
i.e. appreciate the basis of the compact, because: accountability is the primary legal basis for the underlying contract and its termination with or without cause.
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► CG7¹₃: An expectation to grip issues acceptably
i.e. negotiate the compact, because: any compact is a compromise with certain benefits/obligations being straightforward and others being problematic and subject to negotiation by both sides.
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► CG7¹₄: An expectation to set directionscollaboratively
i.e. develop the future of the compact, because: employment interacts with both career and corporate strategy. So an understanding needs to be worked out in regard to the likely trajectory of assignment, person, and organization.
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► CG7¹₅: An expectation to use information knowledgeably
i.e. get fully informed about the compact, because: objectivity about both people and situations is needed for both sides to make a rational commitment to the compact.
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►CG7¹₆: An expectation to channel aspirations perceptively
i.e. funnel hopes into the compact, because: the best hope for creativity and full commitment lies in aligning personal aspirations with the organization's shared vision.
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►CG7¹₇: An expectation to evolve mindsetsreflectively
i.e. consider what is behind any compact, because:  both parties have to recognize that each is evolving and growing. The compact will therefore reflect historical factors, current stresses, future possibilities &c.

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Having accepted the compact, the employee must now start working—which takes us back to G1.

• So now we can review.

Originally posted: 11-Nov-2011