Strengths Campus
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The Hot Button - Just Reward
Lately, some of our Strengths Campus blogs have been touching on a subject that I’ve felt strongly about for years. Last week’s “2 x 4” column started it off with a discussion of how to “value world-class performance in every role.” Tracy Hutton picked up the baton by sharing some of her experiences as an HR leader, trying to make the case that great performance should be rewarded on the spot and not necessarily shoved up a promotional ladder that may end up feeling more like a punishment for the employee. I’m adding my voice to the chorus.
The idea that you reward someone for outstanding performance by promoting her, thereby taking her out of the very role in which she excelled, has always struck me as absurd. Clearly, this is not a new observation on my part. It's been over 40 years since The Peter Principle rather famously took a stand against mindless promotion up the corporate ladder. Still, it seems for the most part that we haven’t found a better way. If only we could have a world where people were rewarded for doing what they do well, without having to change jobs.
Actually, I can think of a few industries that follow that simple reward scheme. Pro sports and the entertainment business come to mind. Imagine if, instead of their current practices, Hollywood and professional sports teams worked like the corporate world does.
“Sorry, Peyton, you're a great quarterback... but we can't pay you more than your coach is making. It wouldn't look right.”
“Sure, we're happy you won the Oscar, Ms. Bullock, but people with your experience level just don't make that kind of money.”
“Those are lovely children's stories, Ms. Rowling, and we'd love to pay you more, but your editor does have seniority over you.”
“You have a fantastic voice, Mr. McCartney. I don’t want to promise anything, but if you play your cards right, you may be a band manager one day.”
Absurd, right? I wonder if it’s a coincidence that the quintessential “dream jobs” are precisely those jobs in which you can be rewarded handsomely for doing what you love and not managing what you love. Sure, people dream of being movie stars or rock stars or pro athletes or novelists because of the fame and the riches you can earn. And because it seems like getting paid to play all day. But I wonder if it isn't also because we know that if we excel in those roles, we'll get to keep doing more of them, instead of less.
All of this is not, by the way, to devalue great managers. I think that excellence at managing people is no less important a contribution than excellence in leadership, or in dealing with the nuts and bolts of the job. But I do think — to restate the obvious once again — that being good at working with the nuts and bolts doesn’t necessarily correlate strongly to being good at managing the nuts and bolts workers. I’d love it if we learned to value both in their own ways.
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Comment by Jim Seybert - Moderator: on October 8, 2010 at 6:49am -
Brian makes a good point - "All too often profit is the motivator for owners/managers when it should be an expected outcome but not the driver. If rewards are aligned with contribution, impact and the business's economic engine everyone should win."
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Comment by Brian Kenneth Hughes on October 7, 2010 at 8:19pm -
I believe, pay-for-performance it the best method to motivate high achievers. They typically know they are good and choose to do what they love to do. If not paid for their contribution they will walk to where they are valued. The challenge is to find the economic engine for some industries that can support it. Sales people compensation plans are clearer cut than say an technical engineers compensation plan who can out design anyone but can loose track in time, impact and business needs. To my opening point, I believe organizations need to take more risk, invest in the top performers and success will follow. All too often profit is the motivator for owners/managers when it should be an expected outcome but not the driver. If rewards are aligned with contribution, impact and the business's economic engine everyone should win.
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Comment by Jim Seybert - Moderator: on October 6, 2010 at 3:20pm
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TJ - can't help with empirical data but I have first hand experience. I consulted a publishing house that had the world's best-selling fiction series a few years back. Sales people had been paid commissions for years, but when this series took off management decided to roll everyone into a salaried situation.
Their reasoning was - no kidding - "We want to protect our people for the time when this series ends and putting them on a salary will insure their income doesn't go away when sales are not as good."
Many of us - inside and outside - suspected the real reason was more along the lines of management not wanting to pay sales people commissions on books that would "sell themselves."
Ten years later they are still on the salary system for sales people and I think their sales have suffered because the field team has no incentive to push a little harder on marginal titles.
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Comment by Tracy Jean Hutton on October 6, 2010 at 12:50pm -
I've been looking for my research on comp plans- I know there is evidence of organizations who use flexible ranges - where a contributor can eclipse the level above them and reap other rewards for maintaining their position. Of course, it's definitely not all about the $ - I firmly believe that money is no motivator but can be a serious demotivator... Does anyone have the recent findings on where $ fall in terms of "why employees stay?" My data is at least 5 years old now...
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