7 Attributes of Rewards and Consequences to Shape Corporate Culture

Is It Possible to Shape Corporate Culture?
Your corporate culture exists by design or by default.  Chances are you shaped, inherited or stumbled into your workplace culture.   But can you shape corporate culture to align with your strategic objectives?  Can rewards and consequences play a role?

The Definition of Culture
Let’s start with a definition of organizational culture.  We define culture as the way work truly gets done in an organization day-by-day. You can also think of your corporate culture as the collective attitude, assumptions, purpose, and behaviors of a company’s workforce.

Culture Accounts for 40% of the Performance Difference
Our organizational alignment research found that corporate culture accounts for 40% of the difference between high and low performing companies.

Shape Corporate Culture
You may have the kind of culture you hoped to create or it may be the kind of culture you want to change. The question is how much control of your corporate culture do you have as a business leader?  Can you change culture?  Enforce culture? Control culture? Shape corporate culture?

Behavior Modification and Culture Shaping
We all know about behavior modification — the “carrot and stick” theory of motivating by a combination of reward and punishment. You offer incentives to do the right thing and penalties for the wrong thing. This theory is the basis for many kinds of animal training.

Used correctly, rewards and consequences can play an important role in creating a high performance culture.  Used incorrectly (think Wells Fargo sales scandal), rewards and consequences can create undesirable behaviors and outcomes.

An Example – Do Sin Taxes Work to Change Behavior?
Let’s start with recent efforts to guide the general populace toward better health habits to get a sense of the power of consequences. Sin Taxes (the so-called sticks) are now being levied in some areas on sugar-laced drinks, alcohol and cigarettes.

The objective is three-fold: (1) to decrease demand for unhealthy products by making them more expensive; (2) to save medical expenses related to obesity, addiction, and cancer; and (3) to garner some revenue that, ideally, can be used to promote health improvements and prevention. And according to studies, all three seem to be working:

• Soda Sin Tax
  The nation’s first “soda tax” on sugar-sweetened beverages, which went into effect in Berkeley, California, decreased consumption of sugary drinks by 20 %.
• Alcohol Sin Tax
  Increased alcohol taxes in Illinois of 1 cent per serving of beer and 5 cents per serving of spirits caused a 25% monthly decrease of drunk-driving deaths.
• Cigarette Sin Tax
  It is well-documented that cigarette taxes cut cigarette consumption particularly among teenagers and low-income people – thereby helping to significantly decrease strokes, heart attacks, and lung cancer. Hopefully, the documented effects of secondhand smoke would also be reduced.

So while some validly argue correlation does not equal causation, we believe people generally try to avoid “bad things” and strive to gain “good things.”

What Does this Mean for Rewards and Consequences in Workplace Culture?
In general, you want to:

• Reward and provide positive feedback for the behaviors and performance that you want
• Have negative feedback and consequences for undesired behaviors and performance

7 Attributes of Effective Rewards and Consequences to Shape Your Corporate Culture
The right combination of rewards and consequences should create emotional involvement and the right level of desire and motivation within your culture.  To be effective, rewards and consequences must be perceived as:

1. Delivered with a clear cause and effect
2. Timely, simple, and understandable
3. Significant for the receiver
4. Fair, proportionate, consistent, and respectful
5. Directly linked to genuine and important meanings and reasons
6. Not unexpected
7. Aligned with the business strategy and desired culture

The Bottom Line
It is the job of leaders to provide the right motivation, desire, and engagement for their teams to perform at their peak.  Rewards and consequences can play an important role in creating higher performance.  Just make sure they have the above attributes so you do not make things worse as you try to shape corporate culture to align with where you are headed.

Want to learn more about how to shape corporate culture? Download 3 Levels of a High Performance Culture