Tag: HR

How to Intrinsically Motivate Great Leadership With the Right Incentives

How to Intrinsically Motivate Great Leadership With the Right Incentives

Short-term incentives are an essential management tool serving the purpose of incentivizing people to achieve their short-term objectives. However, when people are too focused on these, short-term incentives can undermine leadership. Leadership is about finding ways to change the status quo, and this requires taking a moderate degree of calculated risk. To secure both their objectives and their short-term rewards, managers will minimize risk by following and incrementally improving the conventional means found within the status quo. This is exactly what managers are supposed to do. However, leadership is different than management. Where managers optimize the status quo, leaders change the status quo. To encourage leadership, don’t just reward people for achieving their objectives; reward them for taking the initiative to change the status quo. Since leadership initiatives come to fruition in the long term, providing stock options is a great means of encouraging it. Unfortunately, this aspect of these long-term incentives seems to have been forgotten by many businesses who use them primarily as “golden handcuffs” intended for employee retention. Thus, many managers receive these without providing the leadership that might contribute to the option’s upside.