Monday, February 9, 2009

Are You Getting What You Are Paying For?

It is simple psychological truth - people "do" what they are rewarded for. So the questions are: what do you employees consider a reward? and what are you rewarding your employees for?

It may sound silly, but when you pay an hourly wage - you are rewarding hours (not work). When you pay a sales commission, you are rewarding sales (nothing else). And when you pay a salary - well, more than anything else, you are rewarding commitment - but to what?

So how do you get your employees to want to do the work you want them to do - at the level you want them to perform? Simple right, you reward them for it!

Furthermore, I've heard it said that real Leadership is getting others to want to do what you want them to do. So in essence, what we are talking about here is building leadership (both organizational and personal) into your culture as much as rewards.

If you want someone to produce higher quality, then reward quality. If you want your team to work better together, then reward teamwork. These ideas sound simple, but their implementation is on of the biggest challenges you will face as an owner or a manager. It takes very thorough commitment on your part to figure out what it is EXACTLY that you want from your employees as well as figuring out exactly what each employee considers a 'reward'. And that is something very few owners / managers actually do.

First, if you want your employees to do what you want them to do - you must clearly spell out what you want them to do. And then you must describe for them what doing it well looks like. I I know you think you might have already done this - but if it isn't written down, where both you and your employee can read and review it regularly, it isn't done. And statistics show that less than 1 in 5 Americans actually have a clearly defined job description and know exactly what is expected of them.

Most business owners have ideas of what they expect - but rarely do they do anything but bitch about how their employees aren't meeting their expectations. In this "job description", for lack of a better term, you need to include what you consider the "bare minimum", what you consider "good" work, what you consider "great" work and what would completely blow your socks off. Take your time with this - think it through.

Now here's the tough part (as if it hasn't already been really hard to get all of the above done). Now you must figure out how to reward (compensate) each employee so that if they do the bare minimum, they will get the bare minimum they need (or desire). If they perform a good job, they will get paid a good salary. And so forth. And you must share it with the employee so that they understand and can commit (or not) to the job. This then puts the ball in their court - and you soon find out what type of employee you have - one that is motivate, or one that is just trying to collect a paycheck. Either way, you can rest well at night - because you are getting what you pay for.

I appreciate anyone who has endured this blog to this point - results-based compensation is not easy and shouldn't be implemented without thorough thought and consideration. Most that have tried it with less than stellar results did so without due diligence in the process. Take some time to think about each of the questions I've brought up in the article. You will find that the solution isn't in the answers - it is in the process of searching for the answers.

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