What are we talking about?
20-70-10 is so called vitality curve invented by (ex-) General Electric CEO Jack Welch when all workforce is divided to 20% of best performing, 70% average and 10% under-performing people. This system encourages to highly reward 20% and get rid of 10%. It was used in Microsoft until recently.
Intrinsic motivation is internal motivation where person is motivated by joy of performing the task itself versus some external factors such as ranks or salary.
What is going on?
I suspect the reason why they got rid of this system in Microsoft is because it was discouraging collaboration, hurting team work and therefore company’s profits.
My problem with 20-70-10 rule is that it usually assumes that all people are competitive which is not true for 90% of the time. It substitutes intrinsic motivation with extrinsic one which in itself might make people less productive since substitution of intrinsic motivation with extrinsic one is known to cause decline in intrinsic motivation.
Another issue with the 20-70-10 is that it is always fixed numbers. Situation in real life is never exactly the same for all teams and even for the same team if changes with time. In this case it means because you have to fire 10% – you might end up firing really good developers instead of finding them a place in the company where they actually suit better.
I noticed that I myself was much more productive when I’m getting high fixed salary: it develops a sense in me that I am a highly paid professional and made me focus on my work versus focus on how to optimize my work in the system in order to get higher bonus.
All of that makes me think that 20-70-10 is unsustainable gamification: it substitutes intrinsic motivation with extrinsic one making people develop areas they are not good at and abandon leveraging their traits where they already good at.
If not 20-70-10 then what?
20-70-10 was designed to promote and support talented people and get rid of “unproductive” ones. If we get rid of this system then how do we know that people won’t stop working hard?
First of all I believe we have to define the goal. The goal is not to just motivate personal performance but to improve company’s performance. Therefore we need to think hard on what to do to get the most of all people, not just one individual.
It very well-known fact from game theory that collaboration beats competition. If you collaborate – you gain far more when you could competing vs others. And this is why there anti-trust laws are out there: to prevent unfair collaboration to benefit consumers. To me it is clear: there should be systems promoting collaboration instead of making people to compete against each other.
I’ve recently read book First Break All the Rules where they conducted huge research of managers and employees in attempt to find out how most productive teams and companies are different from everyone else. What they found was that the most effective teams were developing personal strengths of each individual employees and using those strengths in work versus attempting to make everyone the same.
In general I think that the most powerful approach to work with people is to encourage intrinsic motivations and not substitute them with extrinsic ones. I.e. advance them, teach them, encourage PMA and collaboration, help them develop their skills and talents and develop pride in the company, team and themselves. And I’m proud to say that AppDirect is a company which does just that.