Bonuses & Perks That Work

Lately it seems I’ve written mostly negative posts about bonuses and executive compensation pay, though I did write about executives admitting they’d give up some of their incentives in exchange for recognition.

Well, today, I’m pleased to bring a post about a CEO who did just that. Lenovo CEO Yang Yuanquing is the type of leader who understands the success of the entire company is entirely dependent on the contributions and behaviors of the individual employees. More to the point, he made sure to honor that by recognizing every employee for their efforts that led to a net profit increase of 73% year over year. As this story related:

“Lenovo CEO Yang Yuanqing has decided to use a $3 million bonus he received for the company's record-setting year to reward thousands of the company's rank-and-file employees.

“‘We ended the year as the number two PC maker,’ [Lenovo spokesman Jeffrey] Shafer said. ‘Yuanqing felt that he was rewarded well simply as the owner of the company.’

“According to Shafer, Yuanqing owns about 8 percent of the company. Shafer said the CEO felt like it was the right thing to do to ‘redirect [the money] to the employees as a real tangible gesture for what they did.’”

With 10,000 employees, that means each employee received about $300. Typically, I would advocate against a cash reward of such a low amount as $300 really isn’t enough to distinguish the cash award from compensation in the employee’s paycheck. But this is certainly a special case when employees realize what the boss did in this scenario. The “story” sets the cash reward apart from standard compensation perfectly.

Of course, the rules are always a bit different in the high-tech world, especially when creating perks that appeal to this highly recruited talent group. Case in point, this story on a company that pays employees to take vacation:

“FullContact, a Denver technology company, recently announced this change to its vacation policy: Go away, get off the grid, and get paid $7,500 to do it. Dubbed ‘paid, paid vacation’ by company CEO Bart Lorang, the policy gives employees the money to pay for their trip away, as long as they completely disconnect from work.”

While this idea might seem a bit foreign to my European counterparts for whom taking longer vacations than their American colleagues is the norm, I can see the need to push employees to truly take a break. My own team is famous for staying connected, even though I strongly encourage a fully disconnected break to rejuvenate. In the long run, the benefit to the organization from renewed energy, creativity and innovation from employees is well worth it.

What’s your favorite story of bonus done right? How about the best perk you’ve heard of or experienced? Why did these work?

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

[Dan Walter]

Hi Derek, I love to see stories like this. Unfortunately I only see one or two each year.

A great example: in June 2008 U.S. Dry Cleaning Corporation (OTCBB:UDRY) announced that the company’s CEO and founder, Robbie Lee, gifted 400,000 of his personal CEO stock options among more than 140 non-executive field employees of the company’s California operations.

There are similar examples each year, but they are so few and far between that they are often missed.

It's great to know that there are executives out there who will go beyond the surveys and market norms to ensure that employees know they are appreciated. I am sure if more companies did it, we would see happier employees and more successful companies.

[Jacque Vilet]

I hope this is not a fad but something that is really catching on. More than the $ amount --- it sends a great message from the CEO that the employees are really the ones that "make it happen". Again -- it's not the money -- it's the recognition.

[marlon]

This is really a good act toward the employees. But their customer service and shipping must be the Worst among the computer companies. I am going through a nightmare just trying to get my laptop shipped on time.