There's a really good discussion and story on the ESPN program “Sunday NFL Countdown” today about individual player incentive payments — why are they necessary to motivate players and how do they distort the game in the last week of the season? Here is a related news story about NFL quarterbacks getting incentive payments for winning playoff games. Um, isn't it their natural intrinsic motivation to try to win games and make it to the playoffs?
As Dr. Deming would have said, individual incentives distort the system and they remove intrinsic motivation. Dan Pink (hear my podcast with him here) wrote about this in his book Drive: The Surprising Truth About What Motivates Us – his prescription is to pay people enough of a salary so they aren't worried about money and then don't get in the way of intrinsic motivation. How would Mark Sanchez play differently if the Jets gave him a higher base salary without an incentive for making the playoffs? It is a team game, yes?
Think about cases where quarterbacks get a bonus for having a certain “passer rating.” This gives them, possibly, a financial incentive to “play careful” and not throw interceptions (something that hurts your rating… and maybe hurts the team's chance of winning).
My notes from the ESPN piece:
Agent Drew Rosenhaus says they would prefer guaranteed income, but incentive clauses are “a way to bridge the gap” – he calls it “performance based pay.” But my question is how to gauge individual performance in a team game – these team sports include football, healthcare, and business.
Wide receiver Andre Johnson (one of the best in the NFL) says you want to think about the team first, but the contract incentives might get in the way (my paraphrasing).
In 2008, Green Bay Packers running back Ryan Grant had a chance to earn a $1.3 million bonus for reaching 1200 yards and being in the top 5 running backs. He had a long touchdown run that would have gotten him the record, but an official's replay overturned the play, costing him (it seems) the $1.3 million. It probably had nothing to do with the outcome of the game… at least Grant could smile about it in the story.
In 2007, Ravens DE Terrell Suggs needed one sack to earn an incentive payment. He got the sack… and earned $5.5 million. So how did that impact the way Suggs played that game? Was he willing to take wild chances (risking giving up big running plays) just to increase his chances of sacking the QB?
Patriots running back Corey Dillon had a $350,000 incentive riding on the last game of the year. Coach Bill Belicheck told him earlier in the week that the team would pay the incentive no matter what happened. This seems like a good practice to keep players focused on the team and not individual stats. Maybe Tom Brady isn't the only reason he has those Super Bowl rings?
In 2009, Ryan Grant again was just short of the big incentive payment in the last week of the season. Grant said “we didn't necessarily need the win” (because I presume the Packers were resting starters going into the playoffs to avoid injury) but “it became an issue of whether I'm going to get that yardage.” He needed 48 yards to earn $2 million. The Packers coaches, unlike Belicheck, had players tracking Grant's yards and how close he was. The Arizona players also knew the number, Grant said. He hit his target with 3 yards to spare.. Grant “told quarterback Aaron Rodgers NOT to check out of run plays” – putting himself before the team. That's a clear distortion of the system.
Agent Rosenhaus said “guys play for the game, but it's also a business.”
Receiver Terrell Owens would have earned $333,333 for having a 10 touchdown season, but he got hurt after week 15 – having score 9 TDs for the year.
Also at stake today: Dolphins RB Ronnie Brown is 30 yards short of a $500,000 bonus. Browns WR Josh Cribbs earns $100,000 for making one more reception. TE Kellen Winslow needs 7 catches to earn $150,000.
Former player Keyshawn Johnson told a story about telling his QB before the last game about how many yards he needed for his incentive payment in 2004. Johnson broke his ankle and WANTED TO GO BACK IN THE GAME to earn $500,000 for 20 more yards. “I'm going to play to win the game, but I was mindful I had that in my contract.”
Former player Tom Jackson asked why the money is offered. He asks why if a player has a $90 million contract over many years, why would you offer him $100,000 for making the Pro Bowl? “If I'm paying you $90 million, I EXPECT you to go to the Pro Bowl!!!”
Mike Ditka told a story about playing all of the 1964 season on a broken ankle. He had a chance to earn $1,000 for going to the Pro Bowl. The legendary coach George Halas didn't want Ditka to go, as he might get hurt. Ditka said “how about you pay me the money for not going?” Halas replied, “Why don't you go?”
Chris Carter commented that incentives are a huge part of the contracts. When he played, “The Minnesota Vikings paid me like a Pro Bowl receiver, so my incentives were just a little bone here and there.”
Tom Jackson again said, “When I played, the incentive was to play as well as you could, to go to the playoffs and get a chance to win. That was the only incentive we needed.”
These are interesting things to think about as we watch football today… and as we go through the annual “incentive plan” and “performance incentive” planning in our organizations? I think the ESPN story emphasized Dan Pink's main point from “Drive” that incentives work – however, we need to be aware of the “side effects” and unintended consequences that can result.
Is your organization following any of Dr. Deming's teachings about the dangers of individual incentives? Have you been inspired by Dan Pink's book to make any changes?
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