Is there a link between reward and performance?

Innovation Should Foster Risk taking

There are many theories on whether incentive should be paid or not and what type of incentives should be given?  There are many companies where paying cash incentives has worked very well. In Mirai industries, among top five innovative companies in Japan, pays Rs 3000/ idea  to each employee irrespective of the idea being useless or  very good. At the end of the year Mirai gives financial awards of Rs100,000, Rs 50,000 & Rs 30000 to top three entries.   The incentive system has proven to have worked for  Mirai Industries – they have consistently have won many awards for innovation. They have also filed over three hundred patents for its innovative products.

How do you build an innovation culture? Try carrots. Several companies on our list have formal rewards for top innovators. Nokia Corp. inducts engineers with at least 10 patents into its “Club 10,” recognizing them each year in a formal awards ceremony hosted by CEO Jorma Ollila.

Rewards Linked To Innovation Drives Many People to Excel

Apple experience with incentive system has been quite the opposite of Mirai Industries, Japan experience. In Apple, Steve Jobs has ignited the imagination of his employees without shelling out the Mirai Industries type financial rewards. Steve Jobs has created a strong innovation culture by making employees feel that they are working to change the world by their work. Steve Job never says that lets work to increase the stock prices of Apple, but makes the employees feel that they are going to change world by their projects. The feeling of being part of history is so strong that Mirai Industries type incentive would definitely be outright rejected   in Apple. But still there has to be incentive system for the ideas. I am sure at the end of the year Apple rewards high performers with promotions.

A  third systems falls between the two systems described above. There are companies like Nishimura Machine Works, in Osaka Japan,    who have developed a point system for each idea employee gives. At the end of year, employees are given gifts depending on the points they have accumulated over the year. To answer the question whether the incentive system will work for you? My answer is that it depends on your unique circumstances. In the three cases described above, all the three systems are working perfectly well

Like we have Manikchand Filmfare awards in movies, similarly most innovative companies hold annual innovation days for recognizing innovation initiatives. Innovation day gives employees a wonderful opportunity to showcase their innovation to company employees In recognition of the innovations efforts, companies create many categories of awards, just like Manikchand Filmfare awards .  Cemex holds an innovation day where teams display their products for financial prices. The teams prepare three minutes video clips of their inventions and all employees participate in choosing the winner. The event is live telecast throughout all Cemex offices. The management gives speeches extolling the employees to innovate. The management drives home the message that innovation is central to growth and survival of the company. Such event reinforces the importance of innovation in the company and motivates employees to become innovative Also it is a wonderful opportunity for managements to spread the message that we consider innovation as very important for the growth of the company.