Are You Paying Employees for Results or Knowledge?

What are you really paying your employees for? Sure, you hire them based on their experience, their education, their recommendations. But once you have them on board and contributing, what are you paying them for - their results or their knowledge?

On his Go Make Things blog, Chris Ferdinandi asked just this question, using this illustration:

A workplace that focuses on results as the primary means of measurement for reward concerns me in that there is potential to lose sight of these three key contributors to success:

1) Unique knowledge contributions - Steinmetz clearly brought unique knowledge in his ability to listen to a generator and determine where and how the system was failing. You likely have employees who bring similar unique knowledge to their roles, whether that be an accountant who knows how to dig deeper into the numbers to find ways to save, a project manager who can find a more efficient way to implement a key initiative, or an administrative assistant who instinctively frees the boss to focus on strategic matters. All too often, the value of this unique knowledge (or, in some cases, long-held institutional knoweldge) is lost by looking at the "role" and not the person filling the role.

2) Efforts contributing to progress - Think what the outcome of the this story could have been if Steinmetz's manager on this project had looked at him and observed, "All he does is listen and scribble. I'm not seeing the value here." But through the listening, filtered through his knowledge of what specific sounds meant, Steinmetz was able to fix for relatively little would could have been a very expensive complete rebuild. Honoring the "listening" by recognizing and rewarding employees for making progress on the way to achieving desired results is crtical to success. This is especially true in projects that can take many months to years to complete. Keeping employees energized, engaged and focused on the end-goal is far easier by praising and appreciating progress along the way.

3) Hidden contributors to ultimate success - Do you know who the true power players in your organization are? The traditional organization chart is quite deceptive in that it's often not the people at the top of the power chain who deliver the most value to your organization. We have one client who was suprised to see a receptionist in an office in outlying region recognized for her contributions more often than some prominent engineers. Digging deeper, they found out this recepitonist was always willing to go the extra mile to help out or find a person in the organization who could. She was a hidden contributor, but no less critical to the success of the organization. How do you uncover those people in your organization?

Chris Ferdinanci ultimately reports that Henry Ford paid the bill in full. Are you? Are you recognizing and rewarding unique knowledge contributions, progress contributions, and hidden contributors?

As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[E. James (Jim) Brennan]

I LOVE that story, apocryphal though it is. Snopes reports it as an unverified folk legend featuring Nicholas Tesla, Edison and many others: http://www.snopes.com/business/genius/where.asp. I first heard it in connection with 1880s railroad barons hiring an expert who borrowed a hammer to hit the boiler in one spot for the fix. Regardless of the veracity of the specific attribution, it is valid midrash that points to an eternal truth.

[Derek Irvine, Globoforce]

Excellent point, Jim. I should have "Snoped" this before posting it as reality, but thanks for clarifying in comments! Regardless, as you say, it serves as a powerful illustration of the importance of employee contributions. Like all good stories of this nature, I like to believe there is a kernel of truth that kicked it off.

[E. James (Jim) Brennan]

The essential timeless truth of the lesson is certainly shown by its broad repetition in many forms. Work is done by people, not by jobs. An org chart may show context but is silent re the actual impact of the people whose skills are properly applied.

Such stories help ideas take shape, just like Santa Claus stories inspire Christmas generosity.