Today I took a moment to respond to an e-mail from a former colleague asking for examples of successful pay schemes to encourage innovation. Now I’m not in any way a pay guru. Still, I thought I’d throw in some thoughts just for the hell of it.

I am thinking, what about Alfie Kohn’s book Punished By Rewards? This book sums up an awful lot of research which suggests that the carrot and stick approach doesn’t work – and that the carrot is just the same as the stick in this regard.

Simon Caulkin also wrote an interesting column in the observer a while back summing up the arguments against performance-related rewards. You’ll find it at http://tinyurl.com/mcw47v. It’s interesting to note that he mentions Kohn and also our old friend Herzberg.

Perhaps a couple of questions for the pay gurus:

• What do you want people to do (and how successful is performance related pay in getting them to do it)?
• What do you want their reasons to be for doing it (and does reward ever have people do things for your desired reasons)?

Perhaps, in brief, it does seem that reward encourages people to do things for reasons of extrinsic motivation and reduces their sense of connection with the power-house of their own deep-rooted intrinsic motivations.

So what if the route to greater innovation were not via pay and reward at all? Oh! Maybe a good resource to explore this is the book and CD When Fish Fly! Lessons for Creating a Vital and Energized Workplace from the World Famous Pike Place Fish Market. The book is much easier to get hold of than the CD . Though I did note that the CD is available from Amazon Japan…