But wait... It seems that something is off...
Would your business' twenty-two year old big shot account rep want the exact same things from their career that your forty billing clerk wants? Is your technical staff aiming for the same opportunities and rewards as your secretary?
Indeed, their needs and wants are very different, but too many managers apply a universal approach when appreciating their key employees. When a large job is finished, everyone is awarded an identical award, whether it's a meal or a gas card. Delivering an identical reward to everyone is what's fair, right? But do you think it's actually fair for your company's top employees?
Retain Your Most Valuable Employees
Too few managers understand that the Pareto theory lesson about their workers teaches that 20% of their workers deliver most of your entire business' bottom-line. In addition, just about every management book refers to case studies which compare the productivity of the top employees to the least competent (yet still effective) employees. The spread between the top and bottom has been found to be as broad as one hundred to 1. The nearest these numbers ever seem to approach is about 4:1. So now how much more does this extreme difference in value wind up costing?
Let's say that your annual salary for the least competent staff member is $30k, what does it cost for your top staff? Since a decent amount of the costs for staff don't change, those costs don't go up in relation to base salary. For the intent of this exmaple, let's use some worst-case figures, $60k. Assuming that your $30k person delivers $30k of value (otherwise you'd let them go, right?). If your top employee is a measly four times as productive as the worst, they deliver far more value for how much more they cost.
If your business invests in more classes for the bottom-rung staff, costs instantly go up, but without any promise that productivity will likewise go up. Also consider how much of your pay is factored into the "cost" of this moderately competent employee? Probably none. Management costs are usually invisible, factored away as overhead. It certainly feels like you're being productive - trying your hardest to bring along the strugglers, hoping that they eventually rise above their shortcomings. Consider how much of your time is spent with either of these employees:
- The self-managing dynamo who, with speed of a bullet train, handles customer complaints, delivers defect-free results, and even cleans up after himself in the breakroom
- The new guy who has a few interpersonal problems, occasional quality issues, some trouble listening to reason, and shows up late to work because of an occasional hangover
Apparently your top performers are worth the effort. As such, it's incredibly important for every entrepreneur to keep their best, as this group of your greatest embodies 80% of your team's value. Their familiarity with your unique processes together with their skills and ability to get the job done in a pinch makes them just about priceless.
But, what's the most effective way to invest in your top people? How do you indicate to those top performers that they're appreciated, and boost the chance that they'll stick around?
What's the most effective way to reward your best people?
Pay them cold, hard cash. If your $30k employee puts in 100-hour weeks during the home stretch of a key project, most pure monetary rewards would come in at a rate less than minimum wage. Simply reconsider this choice. This can be extremely offensive, seen, instead, as a paltry offering to buy them off and ease a boss' guilty conscience. If you do decide to follow this path, once the taxman gets his chunk, the net value of this money may end up being a lot less than it costs to give it out.
Send them to extra training. Some people might be excited about an opportunity to take a course in a new city expenses to the company. They may even ask to spend the week before or after, at their expense, just to really benefit from this chance to stretch their legs. Be careful though, this could appear to your superstar that you found their results in need of training. They might wrongly assume that they have to have further classes to be worthy of the ultimate reward that they'll eventually get. If your achiever is sensitive, they might be worried that their effort they exerted was an indicator to you that they were struggling along. Suggesting a training incentive in this situation could be interpreted that this difficulty was obvious to you, and you are now taking remedial steps.
Promote them. Though the allure of an impressive title or material gains accompanying a promotion may motivate some, more and more workers have come to realize the risks of the Peter Principle. They're concerned that their work lives will change a great deal when they become manager. Your superstar staff probably delight in their current job. That's why they're so gosh darn skilled at it. Before thinking about a promotional reward, be sure that the new job takes advantage of the talents and abilities of these high achievers, or you may end up losing them. If you decide to go for it, ensure your key staffer knows that it's alright to get their old job again if it doesn't work out with the newly promoted situation.
Give additional paid time away from work. Everyone likes time away from the office, right? Unfortunately, if you give this bonus to a very committed person who is so totally committed to their career that they have little social interaction outside of the workplace, they may not know how to conduct themselves during this leisure time.
Do unto others as they would have done unto them.
As you can see, there are many ways to reward your top. It's dangerously simplistic to give each of your staff the same thing. It's especially easy to give them something you'd like yourself.
These examples take us to a very simple concept: communication. To summarize, ask your key people what they really want. What award will allow them to actually feel appreciated? The path that leads a person to turn into a talented account rep is very different than the life of a great office manager. You may be surprised by the answers you are told. In reality, your employees may be amazed, as well, to find out that you are truly listening to their ideas to decide upon the reward for their efforts.
- Do they want cash?
- Do they want more challenging work?
- Do they want some time away from work to appreciate their children?
- Would they prefer more mentoring?
- Do they merely want to be recognized at a company function?
- What rewards have they received previously that really made them feel good?
The answers can vary drastically for each individual, depending upon their long-term objectives, how their desires are currently being met within Maslow's Hierarchy of Needs, and the current challenges in their life. Don't make the mistake of presupposing that the answer you get today will remain the same throughout your key performer's career.
Ultimately, instead of attempting to reward your staff the way you would like to be rewarded, break The Golden Rule, and invest the time actually understanding their needs and wants. By involving them in choices that affect their lives so immediately, you might unintentionally take advantage of the Hawthorn Effect, and motivate your worker by showing you care. You will likely find that you've created a work environment that makes your high achievers more contented than they've ever been. As a result, they will find a way to push themselves to new levels of efficiency, realizing that their efforts will result in rewards that are actually meaningful to them. You may even earn their respect and allegiance for a lifetime.
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Daiv Russell is a small business management consultant with Envision Engineering.
