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Microcredit and Motivation

Microcredit and Motivation

by Frank Roche on October 14, 2006

in KnowHR, Management, Motivation

Microcredit: Helping people on a handshake
Muhammad Yunus won the 2006 Nobel Peace Prize this week. His microcredit idea, through his organization, the Grameen Foundation, was the first for-profit business to win the Nobel Peace Prize. Here’s how Yunus describes “microfinancing”:

Microfinance helps people to escape poverty by giving them collateral-free loans and other financial services to support income-generating businesses. As each loan is repaid, the money is redistributed as loans to others, thereby multiplying its impact.

Great idea, but poor people don’t pay the loans back, right? Wrong. In fact, microcredit loans that are given with nothing more than a handshake are repaid at 98%, higher rates than banks with airtight contracts and reams of papers are able to get. The power of Professor Yunus’s idea, and the will to execute it, is highly commendable. The ripple effect of moving people from poverty to self-sufficiency is stirring. But what’s this have to do with HR?

What if we applied the idea of microcredit to organizations?
What’s the price of a smile? How much does saying “Well done” cost us? Is there a price on acknowledging the little things that employees do every day? I don’t think so. But you’d think there is.

My take is that all too often managers hold back, they don’t give “microcredit” for effort. It’s just too easy these days to buy into the “we don’t pay for effort, we pay for results” cliche. Sure, it’s about results. But how in the hell do you get results without effort? You can’t, any more you can steer a car by just pointing it at your destination point. Steering requires lots of little adjustments. Those tiny adjustments are like microcredits.

Giving microcredit in the form of social niceties is like a loan on organizational goodwill. No need to sign a piece of paper to say, “If I tell you you did something good, then you have to pay me back right away with more [time, effort, engagement].” Just go ahead and offer a little microcredit. Say, “I noticed that you came in on time every day” instead of thinking “that’s what we pay people to do.” Say “Thank you” when an employee answers the phone the way you want it. Notice when they greet people during the day.

It’s the little things that count
Microcredit, in the way I mean here, requires noticing. And it requires managers to go beyond observing only the really big things and making a big deal out of those. (By the way, most of what managers notice is the out-of-the-ordinary things, often the “bad” things. Why do you think performance reviews are filled with “seven good things and three bad things you did”? Because they were out of the ordinary. But don’t get me going on that rant.) You know what people want? To be noticed. To be acknowledged. To be looked in the eye. To get microcredit.

Now, I’m not be pollyanna about microcredit. And I’m not proposing that we get into the self esteem movement, where even the tiniest effort is met with gushing praise. That just won’t work. For microcredit to be given, and for there to be something that will come back to you in return, there has to be proportionality. This isn’t the overwrought “great job” that you hear soccer parents yelling to their five-year-olds, no matter what they’re doing. For microcredit to work, it has to authentic. And believe me, people will know when you’re full of shit. Saying “good job” when you don’t mean it is worse than saying nothing at all.

Pay it forward: The ripple effects of giving employees “microcredit”
I’m a big fan of the Pay It Forward concept. Doing good has ripple effects. And “doing good” is often about the small things. Saying hello. Telling an employee that you appreciate that she anticipated. Acknowledging another. The number one complaint I’ve heard from people in lower level positions is not about the work they’re asked to do. It’s about being ignored. About being made to feel that somehow what they do just doesn’t matter as much. That their time is less valuable or they are not part of the “real team.” It’s easier to get that feedback from lower level employees because they can still articulate what they feel. The company mentality hasn’t beaten it out of them yet to say it’s okay to be a sentient being.

I love that TV ad where one good deed leads to another good deed. I don’t need to persuade you that doing good reaps more doing good. If someone waves us into the lane when the traffic is jammed, we sigh and feel relieved. When someone smiles at us when we’re walking by, we get a little extra spring in our step. And if you’re me, you think things are right in the world when you’re walking through the tunnel under Suburban Station in Philadelphia, and someone farther up in the stream of people under 18th Street pushes the “door open” button as they’re passing through, letting hundreds of commuters flow unimpeded through the double doors (this happens spontaneously, btw). A little microcredit, and it gets paid forward.

Great leaders give microcredit all the time
What if all managers started giving microcredit? I think the really great ones already do this, and have microcredit down bigtime. Great leaders give microcredit out all the time – little acknowledgement and conferred credibility “loans.” There’s plenty of microcredit to go around. It’s free to give. And what good leaders get back in return is loyalty – and results. Sure, there are technical aspects of any job, but it’s the intangibles that make the difference between a manager and a leader. What differentiates great leaders from so-so managers is the ability to link microcredit and motivation. You can never tell a person enough that they’re doing well. They’ll never get tired of hearing it.

Knicknack, Paddywhack
Note: This topic is serious. But while I was typing it reminded me of one of my alltime favorite jokes. SFW.

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