The following story is a perfect illustration of one of the foundation principles a successful employee incentive program should be based on. Specifically, if the reward is not linked to measurable achievements, it can cause more harm than good. Clearly, that was the case at Hughes Aircraft in 1941. If you would like to see the story told in the first person by Dr. Brooks Mitchell, you can check out the YouTube video below or read the detailed version of the story published here again for your enjoyment.
During the Holidays, I always think about my mentor at Texas Instruments, Dr. M. Scott Myers who was one of the greatest management psychologists and visionaries to have practiced his craft. I was very lucky to work with him. Scott told me a Thanksgiving story about a time when he was a Human Resources director for Hughes Aircraft prior to WWII. Yes, he actually worked for Howard Hughes.
At that time, Hughes Aircraft was a very small company. A few weeks before Thanksgiving, Howard approached Scott and asked him to give every employee a turkey as an appreciation gift for a job well done that year. The young Dr. Myers thought this was a great idea and Hughes aircraft gave turkeys to 150 employees. Everybody seemed to be happy and very grateful for this surprise gift.
Shutterstock The following year, prior to Thanksgiving, employees began to ask Scott if they were going to get turkeys again. The company was growing exponentially because of the war and Scott was apprehensive about the logistics of buying and distributing 1,500 turkeys. He approached Howard about this and Howard responded, “Sure, Scott. Why not? Let’s give turkeys again this year.” The third year, it was a foregone conclusion — if you work for Hughes Aircraft, you get a turkey at Thanksgiving.
By the fourth year, the war was on and Hughes Aircraft had grown to several thousand employees. Getting turkeys to everyone was a logistical nightmare. Things became even worse when the union got involved and accused management of giving the bigger turkeys to some favored employees while arrogantly ignoring the fact that some employees would prefer hams. As a result, a contract was negotiated that allowed people to choose a ham or a turkey.
One year, there was a rumor that the hams had spoiled and the workforce threatened a wildcat strike. Finally, management washed their hands of the whole affair and simply calculated the equivalent cost of a turkey or a ham and gave the employees a computer punch-card they could redeem at Ralph’s grocery store. Once at Ralph’s, employees were told the punch-card was as good as cash and they could actually use it for things besides a turkey or a ham: diapers, beer, cigarettes, or anything else in the store. Everybody seemed to be happy and the workforce was no longer dissatisfied.
Scott used to say to me, “In the workplace, if you give somebody something for nothing, you make them good for nothing.” I often wonder if this experience had anything to do with Howard Hughes’ later reclusive years.
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