Reward Systems LO13690

J.C. Lelie (
Wed, 21 May 1997 23:06:57 -0700

Replying to LO13611 -- was: Intro -- S. Chou

Hi Chou,

S. Chou, Student EUR wrote:

> Peter Senge (1996) said that managing learning isn't about "control", but
> improving committment. In my opinion using extrinsic rewards is a form of
> using control (the carrot as in the "carrot and the stick"). Shouldn't
> managers just rely on intrinsic motivation and forget about changing
> reward systems?

Managers rely on extrinsic rewards because they 'see' a world that needs
control. This works fine with other people who share this worldview.
People that perceive the world as 'causal' relate very well to a reward
for work done, including learning. So the 'task-oriented' learning (the
relation between control and pursueing concrete goals and results) will
respond very well to rewards. On several occasion i heared task-oriented
people claim a higher pay because they had learned new tasks (and not
because they performed better). This generally will lead to single-loop

Intrinsic motivation relates to others types of learning and different
kinds of 'welt-anschauung'. Here we have the visionary people, the people
with ideas, who will be motivated by more possibilities to learn and
experiment. They will see a reward in this light. And one finds the true
intrinsically motivated people: those who see the world in terms of
relations, values and feelings. Carrot nor stick will set them in motion,
but respect or maltreatment will. This type of learning (connecting ideas
with values) i would call (relational learning (?)) and might set in
motion double loop learning. This kind of learning is motivated by the
learning experience itself. These kind of people, i have first hand
experiences, are rewarded best by putting into practise what they
suggested. Sometimes they even oppose cash rewards.

> Besides in order to reward learning, you must measure learning first. This
> can easily be done for single loop learning, but it a little bit more
> difficult for double loop learning.

Not in my opinion. Measuring the results of both types of learning is
simply by using the true 'observables' of any organisation: inventory
turns, return on investment and delivery reliability. Because customers
are not interested in the internal learning processes of an organisation.
They'll go for the right value (quality versus price).

> How does one measure double loop
> learning?

> Measuring is necessary in order to create a just distribution of
> rewards (based upon individual or group rewards). The danger of perceived
> injustice in distributing rewards are well known. This could lead to a
> crisis that would destroy any "learning climate".

This is indeed the true problem and an insolvable one too. I suspect there
is no algorithme for a just distribution of rewards. There is no justice,
but the one we impose. And this will always lead to the dominance of one
view over the other. You know the joke about the lion, the hyena, the
cheetah and the eagle who go hunting together? They catch a prey and the
lion says: ' We claim a quarter because of our superior strenght, one
quarter for our big family, one quarter because of our royal status. And
regarding the last quarter: feel free to discuss it with us'. ('When the
sun rises in Africa, you better start running', but that is another joke).

There might be a 'gray area' of tollerable injustice, always temporarily,
but this might lead to complacency. So we have to find a way of
continuously balancing rewards with injustice (and i consider winning the
lottery an injustice, getting something for sheer luck, phhh). I
personally belief that this paradox 'drives' us into increasingly complex
systems. And that is the way to go.

On literature, i would recommend Max DePree's 'Leadership Is An Art'. Also
Robert Fritz 'The path of the Least Resistance' might be of interest
because of the 'trap' for easy ways out. And last but not least: try
Hofstadters 'Goedel, Esscher, Bach' and search for the justifiable rewards
for anybody who will find a 'just' reward system.

Good luck with your study,



Drs J.C. Lelie CPIM (J.C. Lelie) @date@ @time@ CREATECH/LOGISENS - Sparring Partner in Logistical Development - + (31) 70 3243475 Fax: idem or + (31) 40 2443225

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