Richard S. Gold, executive vice president and head of retail banking, M&T Bank, Buffalo, N.Y. spoke November 16, 2006 at BAI’s Retail Delivery Conference & Expo on the topic of “Precision Leadership: Unleashing Discretionary Effort from your Front-Line Staff.”

Behavioral scientist have long believed that that positive, immediate and certain reinforcement is more effective than any other approach for influencing behavior.  A  “Good job!” can accomplishes more than an incentive compensation plan payout many months later or recognition at an end-of-the-year event, according to Gold.

At M&T, supervisors, managers and executives are expected to get the most from their subordinates by positively reinforcing their best work; those subordinates are expected to do likewise with their subordinates. “My job, then, is to reinforce the reinforcement whenever I see it,” Gold said.

Gold identified five steps in using positive reinforcement as a management tool. First, an organization identifies the exact behaviors it wants to achieve certain results, based on its business priorities. Second, it measures performance of those behaviors. Third, it provides feedback to the employee. Fourth, it reinforces behavior that is sought, in part through feedback. And finally, the organization evaluates its overall results.

The goal of this process, Gold said, is to unleash “discretionary effort,” which represents the difference between the output of a motivated person and the minimum work required.

Too many organizations, he said, receive a minimum job from their employees because they dwell too much on the consequences of doing a job poorly, he said.  “In a negatively reinforced environment, people are only going to do what they have to do in order to stay out of trouble,” Gold said.