Incentives

If the conditions are right, a healthy team will fill in the gaps by rebalancing their responsibilities. Such a rebalancing will inevitably lead to an uneven distribution of burden. With time the burden will become increasingly visceral, which will lead to burnout, resentment, and attrition. For an uneven burden to be sustained, that burden must be commesurately rewarded.

Accurately measuring the contributions of each team member is a hitherto unsolved problem. Managers are often left with gut instincts to fall back on, which comes with a laundry list of shortcomings like bias and favoritism. Those who come up with the right formula against all odds are celebrated as good managers.

People write books and give speeches about their favorite good manager. But often the actual skills involved aren’t articulated. The list of skills isn’t long. Primarily these skills revolve around the ability to understand what each person is doing. Secondairly they revolve around the ability to understand how those actions affect the rest of the team. Both require a manager to have visibility into how the team interacts – either by direct observation or by frequent and extensive communication with each team member.

All of this still won’t do much if the team desn’t have psychological safety. Without this, team members may not be willing to recognize and reward their peers. Nor would they be liklely to disclose bad news in a timely manner.

Bad incentive structures lead to people ridigly performing just their roles and letting things fail around them (“it’s not my job”).²

To summarize, good things happen when the incentives for a team:

• Never pit employees against each other. One person’s success cannot be another’s downfall.
• Assume that the leadership hasn’t figured out exactly what needs to be done. The team should be empowered to course-correct as they learn.
• Reward those who pull the team together and help the team communicate internally and externally.