A few weeks ago one of my Tweets linked to a BusinessWeek article “How Incentives Can Undermine Your Influence.” The article focuses on Danny Meyer “the most influential restauranteur in New York City…today every one of his 10 restaurant brands have appeared every year in Zagat’s top 40 for New York City.”

The article’s author, Joseph Grenny, identified Danny’s aversion to incentives as one of the big keys to the superb service delivered by the company’s 1,500 staff. I strongly agree with Joseph’s comments that way too many managers use “incentives as candy.” He explains, “being loose with incentives tends to undermine engagement at best and promote corruption at worst. What ought to be ethical and social decisions are now viewed in purely economic terms. And people who might otherwise have behaved morally fail even to consider the moral content of their actions.”

As Grenny very rightly goes on to point out, this moral and social imperative is especially powerful when it comes to getting engagement for safety. “Our research shows that the most powerful drivers of safety in an organization are a palpable sense of moral duty about circumspect behavior and potent peer pressure that holds people to high safety standards…leaders who lead with incentives first are more than just compensating; they’re compensating for something. They’re trying to offset their failure to create personal and social motivation with a tool that surely gets our attention, but not our affection. And ironically, leaders who employ incentives as a last source of influence often get rewarded more sustainably and generously than those who put them first.”

In my article, Weak Leaders Try to Use Money as a Motivator, you’ll find a chart contrasting a Traditional Management Approach with a Leadership-Based Approach. This was designed to illustrate the critical distinction of incentives and other rewards and recognition to support and reinforce rather than manipulative tools to change and shape behavior.

Management is often about searching for extrinsic motivators to push people with incentives, goals, or performance targets. Leadership is about pulling people through engaging emotional connections that fan the flames of their intrinsic motivation. This is based on the assumption that most people want to make a meaningful contribution, take pride in their work, and be part of a winning team.

Industrial psychologist, David Sirota, who founded and maintains the Sirota Survey Intelligence in 1972 sums up this critical leadership issue very well; “I am often asked to speak on the topic, how do you motivate employees? I think that’s a very silly question. The real issue is not, how do you motivate people but how do you keep management from destroying that motivation? That’s the key question. You don’t need all kinds of gimmicks to motivate people. You have to treat people in a way that their natural enthusiasm can flourish.”

Click on “How Incentives Can Undermine Your Influence” to read Grenny’s insightful leadership article.

You can also go to Recognition, Appreciation and Celebration to browse through a series of my short articles (some with practical how-to steps) on this key leadership topic.