Friday Special at the Cafe

Every Friday, we select an especially good compensation/reward blog post from the past week, from somewhere outside the Cafe, and highlight it here.

With this week's Friday special, we give a nod to Cafe friend Kris Dunn at the HR Capitalist for his thought provoking post What's the Lifetime Value of an Email/LinkedIn/Twitter Contact? 

As Kris tells us, it turns out that researchers from IBM and MIT have recently looked at exactly that question.  From Read Write Web:

"In a recent study conducted by IBM, researchers from IBM and MIT found that the average email contact was "worth" $948 in revenue. This is believed to be the first time a specific monetary value has ever been assigned to social network contact. To arrive at that number, the researchers dove into the address books and emails of 1600 IBM consultants (identities withheld, of course) and compared the communication patterns with the consultants' performance in terms of billable hours, projects participated in, and revenue generated.

In addition to determining the value of an email contact, the researchers also found that those who had strong email ties with a manager enjoyed greater financial success than those who kept themselves more distant. In fact, those with strong links to a manager produced an average of $588 of revenue per month over the norm. (So maybe you should start emailing the boss more?)

Another value tied to greater financial success was network reach. A more diverse circle of correspondents - specifically, the number of people reachable in three steps - was also tied to higher performance."

Heady stuff, yes?  Particularly for those of us in the business of developing and managing rewards, as Kris points out with a few of the questions he poses:

1.  What's the best way to encourage the development of deep networks across your employee-base?  Can incentives play a part, or are those empty dollars spent?

2.  Can you embed network development as a performance management component moving forward, confident that it brings value to the individual employee (good for their career regardless of where they work) as well as to your company?

What say you, Cafe readers?  Is there a role for incentives ... or performance management programs to play in encouraging this value creation ala social network?  What dangers lurk in the woods waiting to ambush such efforts? 

How would you advise your organization to proceed?

Hit us in the comments with your thoughts.  And have a great weekend!

Comments

[Paul Weatherhead]

When I look at the valuable knowledge that Jim Brennan, Frank Giancola, and many others provide on the WorldatWork bulletin boards every day for FREE, I only hope that the members appreciate how much they are saving by not paying for a lawyer or consultant to do the same research.

[Vita Taylor]

Ditto...

But I would also include all the value of the many other forums, such as:

1) this one (Compensation Cafe, Compensation Force)

2) the blogs of specialty groups outside of compensation (like ASTD and SHRM) - and even -

3) alumni groups that give me a perspective of the real world outside of our professional bubble.

You are right, Paul, the value of all of the professional opinions in these groups is incalculable, and getting in touch with the pulse of the everyday person is priceless.

[Vita Taylor]

Just another thought...

When we contemplate the development of incentives for use of social networks either within or outside of our businesses there are a few things to consider.

I attended a seminar conducted by ASTD regarding the use of social networks, primarily within the company, as a means of employee training and a way of extending knowledge beyond the silos of our corporate departments. Compelling stuff... the cost of such training was less expensive and more accessible to all, and was found to be utilized and valued more than traditional training. I envisioned a truly organic organization. Can we incent this behavior? I think the correct question is how to incent the correct or valued interaction. Like any other incentive plan, this one could be gamed if we are not careful. As a start, I would open it up to a recognition program rather than an incentive program, until we know a little more about its usage and the value of such. If we do incent the use of social networks, begin by incenting the activities that are proven to gain revenue (e.g., contact with boss or client).

Still, I find that this may not be reaching the depth of what we want from the use of social networks and the free flow of information, with no boundaries. I think that incentives used to encourage the use of networks need to target (as any good training does) those employees that typically do not participate as much and reward their participation. Maybe an incentive payout curve that disproportionately pays more in the beginning (to build plan participation) and then tiers off some, could be the right model. Something to think about.

[Ann Bares]

Thanks, Paul and Vita, for noting the many ways that individual contribute to our profession by providing their talents, information and expertise to their colleagues on a complimentary basis - via writing and researching articles, contributing to bulletin board discussions, and writing or commenting on blogs. Lots of great resource to tap into.

Also, Vita, appreciate your thoughts on how to "incent" social networking. I agree with you (and with Paul Hebert, who commented on Kris' original post) that caution should be the order of the day and that recogntion/non-cash might be a good way to stick our toes in the water here!