Is Viral Pay Contagious?

With a name like ‘viral pay,’ it’s bound to get attention.  But is it just a catchy name or is there more to it?

I was skeptical at first because having your bonus decided by your colleagues sounds a bit like ‘being judged by a jury of your peers,’ which as we all know is not always fun or fair.  But reading this article at Fast Company provided an opportunity to re-think my assumptions. 

Whatever your rewards policy du jour, human frailty threads through every aspect of management, team work and incentives.  If you leave rewards up to managers you run the risk of centralized human frailty in the form of favoritism, whereas if you open it up to the community you risk decentralized human frailty in the form of a popularity contest. 

Think about it: Who typically gets voted off the island, the least qualified person or the least likeable person?  I don’t want to generalize here but the last person standing tends to be a charismatic buffoon rather than a highly competent person with an offputting personality.

What it essentially comes down to is this: People vote for people they like to the extent that it doesn’t create a threat or disadvantage to themselves. 

Now let’s examine the possible impact of human frailty on viral pay.  On the positive side, allowing everyone to decide about rewards decreases the impact of manager bias and may increase the likelihood ‘silent heroes’ receiving recognition.  It also encourages teamwork and cooperation because personal rewards depend on garnering widespread good will. 

On the downside, while relationship building is very important, we don’t want it to take a back seat to actual work getting done.  There’s also a risk of employees trying to ‘game’ the system, for example by trading rewards.  Finally, people do have a perverse streak and may be reluctant to reward people they think are already too popular or successful. 

Getting back to the article, I liked IGN Entertainment’s approach to viral pay because it includes several checks and balances to rise above personal bias and encourage fair play:

• Rewards are anonymous, so there's no currying favor.
• Everyone has the same amount to allocate so it's harder to game.
• Some rewards are held back for manager discretion, so collective opinion is balanced by personal judgment.

Whether you buy into all this or not, viral pay is just one more step in the direction of a more collective approach to work and leadership.  As I recently wrote in Who Moved My Manager?, the modern workforce is 'global, virtual, fluid, contingent, self-managing, and project-oriented,' which impacts how people work together as well as how they are managed. 

In other words, whether it sticks or not, viral pay is part of a larger trend rather than an isolated fad.  For more information and great insights, I recommend listening to Ann Bares and Stephanie Thomas' recent podast on viral pay.

Interestingly, no one seems to be suggesting that employees vote on executive bonuses. . .

Picture courtesy of kool-stuffs.blogspot.com.

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.

Comments

[E. James (Jim) Brennan]

Being at heart a researcher, I'm curious about the relationship between the success or failure of "viral pay" (where employees self-distribute rewards) and supervisory effectiveness. Bet there is an inverse relationship.

Agree with Laura's caveats.

In a well-managed enterprise where supervisors have strong people-skills and managers are highly trained in management, viral pay should be either a redundant overlay matching company choices or an unnecessary popularity contest. In the opposite kind of firm, it may be the only way those who carry all the weight are given any formal recognition and reward.

Bottom line: most workers don't know enough about the priority objectives or output results of all other performers to make a good comparative decision. And it is not their job or the task for which they are supposedly being paid, as it IS for supervisors. Maybe it is great for flat organizations with excellent group feedback mechanisms and no or little management oversight, though.

[Laura Schroeder]

@Jim thanks for sharing your insights here. I agree managers are - or should be - better informed about how rewards support business objectives. I think you're onto something with your last line, i.e., this may work better in flat organizations with great communication and little formal oversight.