I recently had a great discussion with a friend revolving around employee engagement which led to a discussion around incentives. We didn’t take it into further details due to the time limit (on the train), however the discussion spurred some thoughts which I have been jotting down in relation to incentive’s companies give (or don’t give) to their employees.
We all want to earn a huge bag of money, no? Have the financial freedom to buy a Lamborghini as an impulse purchase. Yet for the majority of people out in life the daily grind, whether you like it or not, is sheer reality. You work hard, you look for something better and regardless of how great your work environment may be, if company Z offers you that much more than your current boss can give you, than a majority of folks would leave.
Im not going to go into Maslow’s hierarchy of needs here however I believe that almost all people are not motivated by money. Money is a commodity that allows you to fulfill certain needs or wants. However money does absolutely nothing in regards to inspiring great work within a (your) team or from any employee in general. Money goes back to the basic instinct of survival. Heck, why does one CEO move to another company for a compensation package that’s way beyond anyone’s dream when they already earn in the millions? The incentive in the short term is the money, however that money wont inspire greatness in that CEO.
I see this challenge with companies on a consistent basis. The classical approach for large corporations is to hire the “best talent there is”…bulls*** you hire the best out of the pool you can get into your funnel, you offer them cash for their work and thats it. If you don’t engage that employee than they will be out your door and that’s where the problem comes in. Most companies have a performance cycle based on yearly or half year progress. Evaluating what the employee has done, the execution vs their deliverable and how they did or didn’t reach their objectives. And based on that and numerous other “factors” they are reward with a financial incentive – eg: in terms of a small pay raise, a one time bonus, stock options, equity, etc…yet the issue with this model is your limited to a snapshot. Performance reviews are biased on a snapshot of a given period with a mix of factors such as actual work completed (not even talking about measuring here), networking and relationships.
Its really simple, if employee’s are not appreciated for their contribution, their (self) value diminishes and they will go out looking for a new employer. Financial incentives only go so far. Its like utilizing the carrot and stick method. Go chase the carrot little donkey and you just might be rewarded. This method will have absolutely no impact to performance.
There are loads of things that motivate people that are not directly tied to any form of monetary benefit which will inspire and increase performance within teams at any company. Whether that’s working on something you love, having an actual company culture you identify with, working with people that inspire you to achieve greatness, working for someone that’s not a jacka** because they believe that the title in their signature makes them god.
Many of these things are easy to understand and easy to implement.
Now I know I’m not going into depth on this and believe me I could. I just want to dispense my thoughts, on a high level on what I believe actually works.
Here is the (my) magical formula: enable your employees to tell stories.
So your thinking what the f***? But think about it. Its common sense that almost NO major corporation utilizes. Screw payroll incentives. Who gives a rats a** about a 2% salary increase. If it was about the money everyone would be rotating jobs very frequently and today’s millennials are doing so.
Here’s an example: our western societies frown upon the disclosure of salaries. Even among your best friends, you don’t discuss what you earn. Its like a silent rule of competition. My cave is bigger than your cave. People keep those things secret and aside from your boss and the lady that runs HR, no one else will typically know what you take home.
How screwed up is that. How do inspire creativity and the absolute best in someone who only worries whether they can pay the bills or if they’ll be able to buy that second lake home next year?
The thing people care about is stories and that is how you are going to have your employees work their tail off because the inner satisfaction they receive from knowing they did a job well done is higher than that extra stack of cash they may get.
Why it works?
Again, I could go into way deeper detail. I might have to do a TED speech on this, however consider this. Picture your sitting with your group of friends in a restaurant, all professionals in their respective fields. Two throw out one of the following phrases:
- “The company I work for is incredible awesome. I get paid 5000 Euros a month.”
- “The company I work for is incredibly awesome. I get a decent salary which is totally cool, however I get a yearly allowance of 1000 Euros to do training’s, I get access to free books, we have a team building event each year, I get time off to work on projects I want to work on and I work with really great people.”
If you are on the other side of that conversation, which of those two phrases intrigues you more? People sharing about their job so passionately that it becomes a story. What higher form of incentive can there be? Screw the extra 1 grand you get after a performance review!
That being said, to all my HR leaders out there – how can you enable your organizations employees and team members to tell the types of stories about their jobs that makes them feel good about themselves and their work?