Managers can reward people for exemplary effort. In most places, only results are valued. This can demoralize people and incentivize wrong behaviour .
More...
Laxmi was frustrated.
She had just had to explain to one of her team members why his performance was rated low. Laxmi knew he had done his very best. The target could not be met due to reasons outside the team members' control.
Managers are often powerless in these situations.
In theory, they have the discretion to reward people for exemplary effort. Even if they did not meet targets. In practice, in most organizations, the culture makes this a losing battle.
This is a clear signal that only results are valued, not effort.
On the one hand it demoralizes those who give their all.
The next time they sense their effort is unlikely to get them to the target - they will stop trying. Without giving it their best. Without trying to salvage the situation as much as they can.
Because it just doesn't pay.
On the other hand, it incentivizes wrong behaviours.
When employees sense that the company only values results, they will be tempted to break the rules, to cut corners. To meet targets, they will ignore long term impact such as loss of reputation, and dissatisfied customers. They may also expose the organisation to legal and criminal action.
Because only the ends matter, not the means.
Unchecked, this can become entrenched in the culture.
