I had an interesting discussion recently with a colleague in sales during which I invited him to work with me on a strategic project. It was mostly interesting because his expression was so bemused as he remarked, “I’m not comped for that.”
In that moment it occurred to me no sales person ever said money doesn’t motivate. Am I right? What matters is the immediacy between action and reward. When it comes to sales compensation the link is extremely clear, although I know a few sales people with complex compensation plans who might question the whole ‘clear’ thing.
For most of the rest of us, the link between action and rewards is less clear and other motivators become a lot more interesting.
For example, a highly skilled and experienced person may care more about autonomy. I don't want to overgeneralize because not everyone values the freedom to define their own priorities more than sweet cash. However, once someone’s earned their stripes they typically prefer to be self-directed and accepting a bit less money for a bit more freedom may be an acceptable trade off.
A young, ambitious person may be more motivated by opportunity than money. In the end it may amount to the same thing, i.e., you defer money today for the opportunity to earn more tomorrow. But the key here is that less experienced person may willing to pay their dues and make early sacrifices for a pay off later.
The interesting thing here is that when the link between behavior and rewards is clear the result is a fairly narrow range of behaviors. Whereas if you want to encourage creativity and collaboration a weak link may work better.
For example, ask yourself who will be most interested in working on a strategic project: A sales person rewarded only for making a sale? A knowledge worker who values his or her status as an expert? Or an ambitious millennial who is trying to create future opportunities?
All three may be motivated to participate but they will have different reasons based on how they are rewarded and what matters to them personally.
So again we come back to a common theme here at the Compensation Café: One size doesn’t fit all.
Designing motivating rewards requires knowledge of workforce demographics and an understanding of human motivation. Without workforce information and a holistic approach to rewards that includes personal benefits, rewards programs are likely to fail to motivate individuals while costing too much.
A recent Bloomberg article Traditional Reward System Lags Behind Global Incentive Model argues that rewards should focus on employees, not the job. According to the article, “compensation systems that reward workers for performance within a job title are archaic and bear no resemblance to the competitive global employment environment we operate in today.”
Why? They're too standardized, artificially penalize high performers with budget restrictions and are designed to reward length of service rather than true performance.
From a motivational perspective here’s a little secret: You can get any of these guys to work on a strategic project if you understand their motivation. But from a compensation perspective a more individualized and informed approach is useful - if not necessary - to maximize the motivational power of rewards.
Laura Schroeder is a global talent specialist at Workday, headquartered in Pleasanton, CA. She has nearly fifteen years of experience envisioning, designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and holds a certificate in Strategic Human Resources Practices from Cornell University. Her articles and interviews on HCM topics have been published in the US, Europe and Asia. She lives in Munich, Germany and enjoys cooking, reading, writing, kick boxing (well, kicking things) and spending time with friends and family. If you want to read more from Laura, check out her talent management blog Working Girl or follow her on Twitter @WorkGal.
Picture courtesy of The Copywriter's Crucible.
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