A Leadership View of Reward
August 12, 2009
Exploring Questions of Compensation and Reward for Top Employees
By John G. Stockman, CISA, PMP, CBCP, MSIS
At the risk of dating me, it seems that the concept of truly rewarding top performers in the workplace has shifted quite dramatically. This became apparent to me in discussions with several Human Resources professionals whom I count as friends and clients.
My early days in the professional workforce seem to me to be much different in tone and potential than those faced by professionals in the beginning of their careers now. How big that difference really is has only become starkly apparent to me enough to write about now.
Perhaps my case was unique, but in the first five years of my professional career, as a top performer in the Information Technology profession (I was a programmer), my annual merit increase was routinely between 9% and 10% of my salary. And that was at a not-for-profit hospital system! My friends and associates in the private sector were getting merit increases and bonuses that exceeded me by far. There were several years where I got my merit increase plus a raise as part of a promotion to another position. One year, my salary literally went up 20% overnight!
Now, make no mistake, this has not always been the case. But, in the late 80’s and early 90’s, I was doing quite well as a salaried employee. In the mid-90’s, I jumped out to private consulting before forming my first company, but still did quite well and managed to increase my income nearly every year. When I formed my first company, our employees received those types of salaries and raises as well. Needless to say, the staff was usually fairly happy with this structure.
Being somewhat of an introverted person in my early days, I usually would shy away from social events surrounding my work. Over the years, that approach developed into a philosophy about the concept of “forced socialization” in the workplace. When I was the President of my own company, there was no such thing as company picnics, recognition events or other “rewards” that were not tangible to my employees. No matter where I was, be that an employee of someone or an owner, the message to me was loud and clear. “Reward” for top performers in the form of cash was always the number one preference. There was never an exception.
I was always amused when companies (at the urging of some Human Resources professional) would offer “rewards” to their best people. Some of my favorites –
- Lunch with the Owner/President – One of my all-time favorites. I can’t help but wonder how this is a reward. I’m sure the conversation would be pleasant and polite for a short period of time and the company picks up the lunch. Beyond that, what’s the reward? A new friend? A glimpse at how the other half lives? It’s a $50 lunch and an hour of my life I won’t get back. I would routinely offer them $100 to let me out of the lunch!
- Membership on “Leadership Committee” – Another stroke of brilliance. So, I work hard to get a 2% merit increase and my extra “reward” is more uncompensated work to help figure out ways to motivate the non-performers. Here’s the short answer to that problem, FIRE THEM and hire better people! Better yet, promote me to be their supervisor and let me fire them. Nothing motivates a staff of non-performers more than a little insecurity.
- Certificates and Trinkets – Another cheap way out. I have no desire for another monogrammed coffee cup, baseball cap with a company logo or a piece of paper with my name on it. The only reward in this is insight into how cheap your company really is and where your professional growth potential leads with the organization. Let’s face it, a certificate or trinket for working hard all year sends a very clear message… Find a better company!
While I’m attempting to be funny here, it is also very much to the point of this article. I’ve found myself recently in the role of articulating to my friends and colleagues in Human Resources (or Professional Development) that reward is a simple concept. Reward to an employee is defined as something that benefits them at a personal and individual level when they are away from the workplace. The two best rewards I’ve found are the most simple:
- Cash – Very simple, very blatant and the most effective reward I’ve ever given any staff member. To reward them with money above and beyond a merit increase and in a substantial enough way to have a meaningful, if only temporary, positive effect on their lives away from work. It helps them, their family or their quality of life. The message is clear that the effort has a value and it incents those that did not receive that reward to try harder.
- Time Off – A second very simple way to do it. If they work hard enough, give them a little extra time away so that they can recharge. It is a no-cost option to your organization in the end. Don’t make it just a day. To really reward someone, make it several days or a free week. Trust me, that message is loud and clear. You get all of the benefits of cash plus a recharged, refreshed performer that is going to really want to stay in that reward zone.
To close it out, I want to be clear that there are people who will strongly disagree with me. And, to be fair, there are people out there that truly value other types of rewards. So, this is by no means a universal assumption. But, from my experience in more than 20 years, nothing works better as a reward than just plain, simple money.