My 16-month old nephew inspires today’s posting. The other day, while watching a video of him, I couldn’t help be amazed at the vastness o f his world. This is true both in physical space and size relative to his little body. He lives in a small town in Nebraska, but it couldn’t seem larger to him. I often envision him in twenty years. This seemingly large world will in fact turn out to be very small. Nearly every adult male in his area works for the railroad or in some capacity of agriculture. The physical space won’t change, but the world of opportunity will become increasingly smaller.
This reminds me of the time when I worked at a small service provider. In addition to my assigned tasks, I found myself embracing every opportunity around me to learn the industry and contribute to the success of the company. For example, I found myself taking on such endeavors as redesigning the company logo as well as producing the company’s first report guide (200 pages of fun). Simultaneously, I was learning about IT, security and the fastest way to stuff six pages into a number ten-size envelope. I embraced every task as an opportunity to learn, make mistakes, take chances and be accountable for parts of jobs that extended beyond the scope of any job description. Best of all, I was not alone in this. My colleagues all put in similar efforts. During this time, my coworkers and I were earning far less than others working in our industry. In fact, the company’s first employee bonuses weren’t paid until our third year of operation and the top recipient received $1,000! Yet we could not have felt more gratification for the work being done.
I never learned more. My world was never bigger.
A few years later the company had been acquired for the second time. After the first acquisition I asked for and received a large raise. After the second acquisition I received a nice chunk of equity. While my pay was growing my world was shrinking. I was no longer able to create logos; there was a department of people in a separate building responsible for marketing. I could no longer grab a few people after work and brainstorm on a holistic solution to the day’s grand problem. Everything had been compartmentalized and while many were now responsible for something, very few were accountable for anything. It is probably not a coincidence that the equity I received after the second acquisition eventually expired without me making a dime. It was a perfect example of a big company offering a small world.
I never earned more. My world was never smaller.
The small company ran well, but it barely made a profit. Although the company just squeaked by each year, it redefined an industry. In fact, a large percentage of the company’s original employees have gone on to run their own successful businesses in that industry. When I have an opportunity to speak with any one of them, they continue to speak fondly, almost longingly, of the days when we made almost no money, but the world was at our fingertips. As a result, the company grew, the employees grew and the owners made millions.
The big company that our small company became a part of also ran well. It still makes billions of dollars annually. I often speak with people from this company as well. (It should be noted that the two groups are almost mutually exclusive.) The employees who were at the big company years ago have mainly stayed there. The exceptions are generally victims of the almost annual layoffs. The survivors still moan about compensation and bonuses even though their income dwarfs even the CEO's pay from the small company; few of them seem truly happy. Their world is a ladder under a narrow spotlight with rungs that are too far apart for most to reach.
The behavioral psychologist, Abraham Maslow has been quoted: “If the only tool you have is a hammer, you tend to see every problem as a nail.” We often hear that money is not the strongest motivating factor for employees. But when your only tool is compensation, you tend to look at every problem as pay-related. We tend to offer more innovative and expensive ways to entice people to stay in their little world. We augment this with more information, recognition programs and clearer paths to job advancement.
I am not suggesting that any of these things is wrong. I am simply suggesting that we try and offer them the world first and money second.
Dan Walter is based in San Francisco, CA and is the President and CEO of Performensation an independent compensation consulting firm focused on the needs of companies not in the Fortune 1000. Dan’s unique perspective and expertise includes equity compensation, executive programs, performance-based pay and talent management issues, Dan is on the board of the National Center for Employee Ownership, helps create ShareComp, a virtual conference addressing equity compensation and founded Equity Compensation Experts a free networking group with more than 1,100 members. Dan is also in high demand as dynamic and humorous speaker at events around the U.S. Connect with him on LinkedIn or follow him on Twitter @performensation.
Dan, what a superb lesson. Great writing, great advice. "Offer them the world first and money second"... needs to be framed and posted.
Posted by: Michael Haberman SPHR | 11/29/2010 at 01:31 PM
I'm with you. It's exhilerating to wear lots of different hats but for some reason growth always seems to come with increasing specialization. By the time you've hired a 'Director of Green Ink' and a 'Director of Red Ink' it's difficult to offer people new challenges because everything has an owner - probably a well-paid one.
Posted by: Laura Schroeder | 11/30/2010 at 06:25 AM
Your post seems to be following a theme of the things I've read today ... unintentionally. The pursuit of proper compensation in hopes of optimal motivation is and always will be a moving target. I agree with the premise of your post: There is more to life than money. Or in your words - there's "the world."
If I may add a point. Compensation managers and corporate executives need to take into account one often overlooked factor ... generation. I'm not talking about age, I'm referring to generational archetype. A twenty-five year old today looks at the world differently and is affected by a whole different set motivators than a twenty-five year from - say twenty years ago. Generation Y is not Generation X and it sure isn't their parents generation, the Boomers.
Today, the front line work force, the Gen Yers, care about more than money. In fact recent study determined new cell phone technologies were more important to them than new car releases. In addition to technology, they care about the environment, social issues, equality (fro everyone) and most of all teamwork. Gen Y, the Millenials, are of the same generational archetype as the heroes of WW2. This archetype's primary characteristic is its affinity for teamwork and collaboration, much like their predecessors in the '40s. Look at the music industry these days. Everybody is collaborating with everyone else - regardless of the music genre.
In twenty years, the situation will be different. A twenty-five year old will be more like one from 1960. And with that a different set of motivators will be needed.
But isn't that what make the compensation industry continually relevant?
______________________________________________
Clay Forsberg
twitter.com/clayforsberg
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Posted by: Clay Forsberg | 12/05/2010 at 10:39 AM
Set your own life more simple take the loan and everything you want.
Posted by: TerraAshley33 | 12/05/2010 at 08:52 PM