Incentives? Do they work?

Recently a number of areas of life have been discussing the application of incentives to drive performance.
This discussion continues to fascinate me and I personally swing from (what it feels like) one extreme to the other, maybe it's the blonde in me :)

Looking at North America based organisations they tend to offer options and share plans as a standard part of the package with staff picking up extremely attractive deals along the way, in fact I understand that some even make a career out of 'jumping' from one start up to the next with the hope of striking it big along the way. Almost like playing lotto in my mind, though with hopefully a much better shot at getting something out of it.
There is a book "The Great Game of Business" by Jack Stack which I picked up for the first time around 10 years ago and over the years keep going back too and re reading. Very briefly it's about open book management within a struggling machine shop that is at the point of closing down. Jacks approach was to give everyone a slice of the action, open the books, make them accountable for individual line items within the corporate accounts and meet every morning to go through the numbers. As you'd expected people started thinking bigger than just their individual roles and in fact roles become a label with people working and assisting in areas that had the most need as they all had a stake in the game. Great book, great story but does it really work in practice?

I have a lot of people who say it doesn't work at all and people will do as they please. Those that work hard have it in their DNA those that don't just don't and nothing will change it.
To jump a little, every Saturday I take my eldest son (5) to his rugby game, for you non fanatical New Zealander's think Gridiron with no pads or helmets, you only pass the ball backwards and a single team plays both offence and defence. Now I recently had my son run up to me and ask what I'll give him if he scores a try, my response was "nothing you do it because you enjoy playing the game". It was only after that did I find out that others in the team were getting ice creams, or toys if they scored try's or met certain try & tackle goals. Now has my blunt "you get nothing" response dented his enjoyment for the game? It doesn't appear to have, he's excited to go each Saturday getting up at 5:30am each morning and has scored at least one try a game so far... but could he have done better with an incentive scheme? or is the only thing that really matters if others get an incentive and you don't? Did business build a rod for its back by offering incentives so now everyone has to? It feels almost like that standard economics example they give you when you attend one of your first lectures: Two suspects get arrested by the police. The police split them up and question them. If both say nothing then they both get 6 months, if both tell on the other then both go to jail for five years and if only one talks that person goes free while the other gets ten years. Probability shows that they both talk getting the worst result for both more often than not. Now I'm not saying that offering incentives is bad, in fact it drives innovation around the world, look at the space challenges, professional sport, and businesses across the globe. I just wonder if it's the best way, or if there is another way to do this instead.

Really a moot point at five years old but still interesting to mull over.

The other extreme would I suppose be to offer a disincentive, though this doesn't sound great to me, you know something like "If you don't get the sale then you're fired" , or in my sons case "If you don't score a try you walk home..." yeah, I can't see this working and it's not part of my DNA but is there any other way?
Could it be an aligned vision as in Principle centered leadership by Stephen R. Covey so everyone strives for the same thing and the shear momentum excites them to the point that the experience and satisfaction of achieving the goal out ways all else?
I assume also that the person or people setting the incentive / disincentive scheme up need to be able to sleep at night which I'd guess would also have a bearing on its final makeup.

Not sure of the answer, but it's interesting to see different models and their creators at work around the place.
Let me know what side of the fence you sit.
Bryce

Test Management or Quality Management

Interestingly, I've been thinking about test management and whether this is the correct term to be used for Enterprise Tester, our test management platform. Test Management seems to me to be a limited term that is a subset of the true aim as to what we are looking to achieve. Sure adding tests, executing tests and reporting on tests are all part of the story. But what about intelligent information gathering around test cycles that have occurred (or sprints if you are using agile).
I like the term 'Quality Hub' since we take the view that test management is a part of the Quality initiative across an organisation, yes stopping bugs being released into the wild is one thing, but actually preventing bugs occurring through the life cycle of the product is another. The latter depends on systems, processes and people that are in concert with each other with an aim of quality output no matter what stage of the production process they are in. A sort of self healing way of working where adjustments are many and frequent as measurement data is feed back to each section or team. This also brings to mind an interesting question "What is quality?" Traditionally I would have said no (or many few) bugs found within the product would constitute a quality product. I'm wonder about this now days with the advent of agile practice, and while I'm not an avid agile fan I like some of the concepts though struggle with others so sit squarely in the middle borrowing techniques from one or the other in a more blended (and what I believe has greater benefits overall) approach.

But interestingly enough I've recently spent a good portion of time walking to and from a client site and having to cross roads at certain points. Now this one day I took the most direct route to the client site (not surprisingly) but interestingly another person (a stranger I didn't know) took a different route to mine but managed to get there first. Now it wasn't that they went the most direct way, nor were they moving faster instead they managed to get the luck of lights changing while I stood waiting to be able to cross the road. This while a simplistic example got me thinking... is it just better to keep moving toward your goal no matter whether it's the fastest or most direct way as long as you continue to move forward? Maybe this is the best thing to do.

This thinking also leads me in a roundabout way to have an answer to the question "What is quality?" Maybe quality has to be measured over a period of time? Maybe something that is perceived to be poor quality now could be high quality in the long term? or vice versa maybe something seen as high quality now could be low quality over the long term?
Take our approach to the product development of Enterprise Tester. We look to release a new version every 6 - 8 weeks and have been doing so for the last two years and have managed to release 18 versions over this time. Do we get it right every time? I'd like to think so, but if we don't what do we do? Our way around this was to have fast release cycles so in quick fashion we can make updates and get back to customers with resolutions or improvements. Call it an insurance policy if you will.
So how do other product manufactures get on with six or twelve month release cycles? To that matter, how do their customers deal with it? The customers business doesn't stop so do they just incur the additional cost through inefficiency? Surely it is madness to continue under this slow release model.

So how do customers look to ensure that they are buying into a 'quality' product? Do they have criteria that they look at to ensure the product they purchase has the commitment of the organisation to continue over the long term to develop, improve, support and stand by their customers ensuring that their customers business runs smoothly on the platform they provide?

Does this mean that existing products that have slow release cycles that are perceived to be of 'high quality' are now actually bad purchases? If they can't change and improve fast enough and leave their customers businesses with more cost then what is the justification? Could it be a perception of lower risk? It does seem that risk or perceived risk is top of mind with organisations, though in this case again maybe perceived low risk now could be an indicator of high long term risk.

Interested in your thoughts.