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PBM 101: Aligning incentives and motivations to empower your team

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PBM 101: Aligning incentives and motivations to empower your team

In this Principle Based Management 101 series, we’re unpacking mental models, ideas, and tools you can use to level up your work.

This article was previously published by Stand Together Foundation.


Principle Based Management™ provides a holistic approach to making decisions, solving problems, and creating value for individuals in your community, team members in your organization, and society at large. ​​​​​​​​​​​​​It is rooted in proven principles that have fueled the ongoing success of Stand Together and our partners. In this Principle Based Management 101 series, we’re unpacking mental models, ideas, and tools that you can use to reach the next level in your work.

In a recent article on the Virtue and Talents Dimension of Principle Based Management (PBM), we explored the importance of hiring and promoting based on values, beliefs, knowledge, and skills. We also identified that the best employee-employer relationships are those that generate win-win scenarios.

How can you craft win-win scenarios at your organization? First, strive to define roles that enable team members to passionately apply their strengths to your vision. Next, make hiring decisions consistent with your stated culture. Finally, align incentives that motivate your team members to continually grow and invest in your organization’s long-term success.

Your organization will thrive when your employees are motivated to make their maximum contribution. Incentives and compensation are not just financial—they may also take the form of recognition, flexibility, time off, or other benefits that are earned and help employees feel valued. Even additional responsibility, new opportunities, and specific feedback can have this kind of impact. Here are four important ideas to consider when thinking through incentives and empowering supervisors to make compensation recommendations:


Value is subjective. Because individuals are different, they value things differently and contribute differently. This should be considered when determining both financial and non-financial incentives. It requires that you learn about what your employees value and use good judgment to apply your knowledge in a mutually-beneficial way.

Mutual benefit

Mutual benefit is another way of saying “win-win scenario.” Many employers do a great job explaining their side of the equation (the value that employees create on their behalf). It’s less common to spend time addressing the other side of the equation. How can your workplace experience add value for your employees? Does it provide opportunities for learning, growth, and fulfillment? Do your team members believe they’re making a difference in ways that are meaningful to them?


If we respect the individual talent and strengths of our team members, we must also understand that our organizations should support an employee’s self-actualization journey. Do you foster an environment that helps employees discover and develop their gifts as part of a larger purpose? Do your team members see how their daily work helps advance your organizational vision?

The role of supervisors

Supervisors are best positioned to evaluate performance and contributions and make thoughtful recommendations for compensation. To do this effectively, supervisors must have a clear line of communication with department leaders, HR, financial staff, and executives. Supervisors should integrate a robust challenge process into their compensation decisions to have the maximum possible impact.


Learn more about Principle Based Management and how it can help you transform your results.

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