Motivating Employees

I'm a compensation manager. My first two jobs out of school were with traditional companies who are celebrating their centennial in 2009. In both of these companies, and in most other large companies in the world, what we have done in HR is rein-in employees by putting a nice, clean box around how to get people to do exactly what we need them to do. If we can add a calculation, strict pay incentive rules and lots of formulas tied to water-tight SMART objectives, we've succeeded in controlling our employees, and keeping them in their (our) nice little box. We call this "best-practice". Have a look at the video below and think about how this applies to your organization:



Our best-practice approach isn't going to work for much longer, and it severely butts heads with the way the brains of our future workforce (generation Y) are wired. What are some steps we can take to breaking the molds that we find many of our companies shaped to? Is it broken?