Money makes and breaks performance
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Searching for ways to get an edge on productivity always turns up some surprising facts. Remember Kiyosaki’s book Rich Dad Poor Dad? It turns out that extremes in your company’s resource environment (abundance or scarcity) when an employee starts work have long term consequences for problem solving, work with clients and successful job performance. Yet more proof that a performance edge can only come from looking at the wider context of work and not just the building.
Andras Tilcsik’s research at Cornell University showed that the logic that lots of money and little money represent advantage and disadvantage long term is a tad simplistic. Newcomers who arrive in times when money for projects is reasonably plentiful do get special opportunities to learn. On the other hand, too little money forces resilience and adaptation which also has benefits. The extremes of too little and too much produce more interesting results.
Tilcsik’s study of 15 years of data from two professional service companies reveals what he calls an ‘imprint-environment’ fit. He’s talking about the socialisation of people in a new workplace setting and how this relates to the generosity seen in spending money. This ‘fit’ casts a long shadow for job performance. It turns out that if there is a match between the resource environment when the employee arrives, and the resource environment in later times, the employee will have better job performance long term. If there are extremes when they arrive, abundance or scarcity that doesn’t match with the longer term situation, long term job performance suffers. Yes, you heard it - a history of too much money can be a bad thing and so can a history of too little money for employees in companies. Using the term ‘resource imprinting’, Tilcsik explains that prior experience (of work) and the inconsistency of the resource environment for a newcomer (sharing with both rich and poor co-workers or experiencing inconsistent decisions) shape the outcome.
Predicted performance ratings were compared for employees who had a strong match between the early and later resource environments and those who did not. There was a 10% greater chance of getting a high rating on a performance review, but get this - it didn’t matter whether the shift over time was from too few to too many resources or the opposite.
People who experienced abundance earlier had a greater ability to ‘get in, get it done, and get out as soon as possible”, re-using work from similar projects. People who experienced early scarcity did not copy and paste solutions, but favoured unique solutions and had closer relationships with clients. Critically, the scarcity in the environment was about money but in these cases, the pressure for work was lower not higher when money was tight and these were private companies. What happens with scarcity and pressure together? In this study, creativity, money and time made interesting bedfellows.
For me, Tilcsik’s work makes it clearer than ever that what you look for and what you find when you want to create a performance edge is key. It is always about context and always about change. For HR people, the idea that when someone was a newcomer in the business way back when can have such long term consequences has to impact what they do to improve performance.
How do you get people to perform work well across a whole a whole career? How do you successfully shift resource mindsets to create great work in your business? Any good examples you know of out there?
Tilcsik, A., Imprint-environment fiat and performance: How organizational munificence at the time of hire affects subsequent job perfomance. Administrative Science Quarterly, 2014. 59(4).
