Tag Archives: Rewards

How to Disappoint Your Employees in One Easy Step

Thanks to my wonderful wife for the idea for this one. 

jelly-month-club-christmas-vacationOne of our traditions every year is to watch Christmas Vacation (no, not with the kids!) While it’s not my favorite (that spot is held by It’s a Wonderful Life), it always gives me a laugh and reminds me to focus on the important things during the Christmas season.

One of the memorable scenes in the movie is when Clark opens up what he expects to be a holiday bonus only to find a “jelly of the month” membership card. After all kinds of crazy experiences, that bonus was his last opportunity to bring some sense of closure to the season by giving an amazing gift to his family (a pool). When he finds out that it’s basically a certificate for twelve free jars of jelly, he snaps, ranting and raving about his boss, the company, and more.

I’ve been a key part of many compensation and bonus reviews over the years, and there are some excellent lessons we can all learn from this story.

Expectations Matter

During the movie, Clark talks with a friend about his big plan to put in a pool. He even carries around a brochure to look at and share when necessary, demonstrating how excited he is about the coming bonus. The reason he ultimately flips out at the end of the movie is because his expectations did not match reality.

The parallel is obvious. If we are going to provide some sort of bonus, whether holiday-related or not, we should ensure that expectations match reality. You can do some prep work, laying the foundation and expectations beforehand to ensure nobody is disappointed (or at least a minumum of disappointment occurs, because it’s hard to please everyone).

At a previous employer, my colleagues and I worked on an annual conference that required dozens of hours of preparation and delivery work. The first year we each got a very small gift card as a reward, and the second year we got nothing at all, despite the event making hundreds of thousands of dollars in profit. How long do you think a company like that will have an engaged, productive workforce? Hmmm…

Value Should Mirror Contributions

In Christmas Vacation, Clark is particularly excited because his work performance was recently recognized as above average. He created a valuable product for his employer, and he expected his bonus to mirror that level of contributions.

When it comes to offering rewards, recognition, and bonuses for performance and results, be sure the result is related to the level of the employee’s contribution. Someone saved the company $2 million by reducing waste? Don’t give them a $25 gift card and call it a day. An employee creates a new process that reduces customer churn by 10%? They expect more than a pat on the back and a template “thank you” note.

This isn’t an invitation to be overly extravagant, but think about it this way: do you want those people to continue innovating and creating new value for the company? If so, reward them well, and create a virtuous cycle of value for everyone involved.

Discriminate. Heavily.

We’ve been drilled that discrimination is a bad thing. In reality, discrimination is wonderful–it’s illegal discrimination that needs to be eliminated. Some of your employees are going to do their jobs and go home, never adding more value or creating unique opportunities for growth. While those people need some sort of recognition for getting the job done, the ones that create more value need to be treated differently. As I mentioned in my post about how to hire and manage creative people:

Whatever label we stick on them, we need to treat them differently from the rest of the employees. Yes, this scares the pants off most HR pros, because we've been taught to treat everyone the same. But it's madness when you think about it. Equal treatment for unequal performance/productivity/contributions is a surefire path to mediocrity.

When I managed compensation reviews, it always drove me crazy to see our highest performers getting a 4-5% raise and our lowest performers getting a 2-3% raise. That ~2% split wasn’t enough to truly reward our great people and create an incentive for continued stellar performance. My only consolation was the bonus pool that I was able to help work with managers to direct more toward those individuals that offered more than their “fair share” of value to the company.

Public or Private Praise?

The examples we’ve been discussing don’t have to include a moment of public praise, but they certainly could. Here’s a story I’ve told before about two very different methods for showing appreciation for the contributions of an employee or team.

Presenting work awards is one part of the employee recognition process. If you are going through the trouble to nominate someone, process the paperwork, and get them an award, wouldn't you like people to know about it? Apparently not everyone believes that. Here’s an example of the wrong way to value the contributions of your people:

I was talking to a friend recently and heard this sad story. A handful of employees received awards for superior performance. It was the first time the work group had received awards, so it was a special occasion for the staff members who earned the kudos. However, the manager quickly stepped in and made it known that the awards were not to be communicated internally. Nobody could know that the employees had been rewarded for their efforts.

My take on that situation is multifaceted. First, the manager is missing out on a great opportunity to share about their people. Point out how well they did and encourage others to do the same (or better). And the people who received the awards? You could have given them half as much money and public praise would have made up the difference. Praise has significant value when people don't receive it often (not that you should withhold it just to make them appreciate it more!)

So, what’s a better way to wrap in public praise without making it awkward? Here is how I liked to do it when I managed a corporate HR function.

One year we had a major corporate office relocation, and it was quite an ordeal. After the dust had settled, the team who made the move possible all received financial awards as a “thank you” for all the hard work, but we wanted to make sure it was more meaningful. Check out the email below that went out as the public praise for the team.

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We've talked about it before, but recently the corporate office moved to a new location. On the outside, it was a fairly simple affair; however, from the inside there was an astounding amount of work that had to be completed. Not to be dissuaded, a few people really stepped in to make that transition as easy as possible. They picked up extra duties, worked long hours, and fought the good fight with vendors and builders to make sure this space was everything we needed it to be.

For their efforts, each of the employees mentioned below received an award as a token of appreciation; we wanted to offer this bit of public praise as well. To those of you who made it all possible, we all appreciate you very much.

(Employee names removed for this post)

Thank you for your support! You truly embody our core value of Unequivocal Excellence in your work.

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At the end of the day, it’s critical to believe that your employees want to do great work. And in your role as an HR/talent leader, it’s crucial for you to coach managers, offer tools and guidance, and help create opportunities for people to be recognized for what they do. I can guarantee that they won’t be disappointed like our dear friend Clark.

How do you make sure your people feel appreciated and rewarded for their work? Do you have a unique way of making it personal and appealing for the recipient? 

Show Me the Money: What CMOs can Teach CHROs

I got a pitch the other day for some new research from the CMO Council. At first glance I started to trash it (I’m into marketing, but I’m willing to bet most of you aren’t!).

Then I took another look. I think the principles in the summary can shed some light on how HR pros can improve their position, make more money, and be seen as more competent overall. Got your attention? Read on!

CMO compensation is directly related to reporting structure. Those making more… are more likely to report directly to the CEO.

driving results

You have to be more innovative if you want more reward.

This one makes sense, but it’s a good reminder. Want to earn more? Work your way up until you’re reporting to the CEO. Or be good enough to become the CEO, but that’s another post for another day.

The highest paid CMOs have developed strong alliances with CIOs and CFOs.

Success in business is driven in part by the key relationships you develop. This applies to the HR function as well. Learn to connect with CFOs and other executives. Speak their language, earn some credibility, and put that network to use.

CMOs earning the highest levels of base compensation tend to be focused on driving business performance (e.g., top-line growth, market share, efficiencies, etc.).

Want to be successful long term in your role? Focus on driving business performance. The rest will take care of itself.

CMO base compensation is correlated with firm size. The larger the company, the more likely that the CMO will make more in base compensation and the more likely they will have bonus compensation.

Want to earn more money? Work for a larger company (and referring back to the first example, work for a larger company in the top tiers of management).

Digital marketing skills are important. CMO salary tends to increase as their firm's digital marketing performance improves.

This is an easy one. The more value you can prove your function is bringing to the organization, the more you can command in terms of compensation. Have an HR mission statement that describes your aims and then make them happen.

Marketing titles (i.e., CMO, VP of Marketing, SVP of Marketing, etc.) don't significantly correlate with base compensation.

Titles matter less than what you do. Your value is not in a title–it’s in your performance and the performance of your team.

Key accomplishments of the top earners… are centered on restructuring marketing to drive results, improving the yield/accountability of marketing, and building digital capabilities.

The top earners focus on results, not “the way things have always been done.” Improving capabilities, driving results in areas that are traditionally not seen as value add, and making tough choices are the activities that are rewarded. Keeping up the status quo not only isn’t rewarded–in many of these types of organizations I’d say it is probably weeded out.

So, what are your thoughts? Anything here that particularly rang true for you? Any action items that stepped on your toes to drive you to action? 

Source: http://www.cmocouncil.org/press-detail.php?id=4882

Alabama legislation: No more gifts for teachers

This saga has rocked Alabama for a few days, and I thought it was an interesting story to share with the outside world. The short version is that teachers can no longer receive gift cards or anything of value from parents as a “thank you” for doing a great job. My response is to this is, “What’s next, outlawing tips for servers?” Teachers have a tough job, and many parents realize that. They appreciate the effort and long hours put in by the people who are educating their children, and they want to take the time around the holidays to do something special to help the teacher understand that they care.

Then the government steps in and wrecks everything (which is pretty standard).

Check out the excerpt below from an email one school system sent to its parents and employees:

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In the Opinion issued yesterday, the Ethics Commission set out two specific rules that apply with respect to any gift to teachers:

  1. The gift may not be given for any corrupt purpose, and
  2. The gift has to be “de minimis” in value.

The first rule is easy enough to understand and unlikely to be an issue with gifts you would give to teachers. The meaning of “de minimis”, however, is a cause of some concern because while the term is used in the law, no definition of it is included. The Ethics Commission opinion issued yesterday offered as guidance the definition of the term as employed by the Internal Revenue Service: “A benefit so small as to make accounting for it unreasonable or unpractical.” The Commission also stated an item of “de minimis” value neither has significant intrinsic value nor the possibility of being sold for profit.

The Commission opinion stated clearly that teachers and public employees cannot receive gifts like:

  • hams, turkeys, etc;
  • gift cards with monetary value.

This list of prohibited gifts is obviously not all inclusive. The bottom line, as we understand the Commission opinion, is that any gifts given must be of de minimis, or insignificant intrinsic value to the teacher (unless specifically for the classroom, as mentioned below).

The Commission has given its opinion that teachers may receive gifts like the following (assuming they are not given for a corrupt purpose):

  • Fruit baskets, homemade cookies, etc.;
  • Christmas ornaments of little intrinsic value;
  • Coffee mugs filled with candy of a holiday nature;
  • Any item a teacher may use to assist him/her in performing his or her functions as a teacher, such as notebooks, school supplies, etc.
  • CD’s or books of a nominal value, scarves, etc.

Obviously, this is not an all inclusive list but it should provide some guidelines to you of the types of gifts that are acceptable for school teachers to receive.

The Commission did note that the school or teacher may receive gift cards specifically for use on items needed in the classroom at any time during the year. But it specifically prohibited receipt of gift cards by a teacher for the teacher’s personal use. We see a significant risk of confusion here. For that reason we request that if you wish to present a gift card for classroom supplies to a teacher, please present it to the school principal’s office accompanied by instructions that it is given for the use of a particular teacher or classroom.

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Does anyone else think this is more than a little crazy?

Rewards and incentives for nine year olds

Think you can offer incentives or rewards long after the fact and it won’t affect the results? Here’s a story I’ve been watching closely that disputes the idea that timing isn’t a major factor in decision making (even for nine year olds).

My wife is a teacher (and a darn good one). One of the things she has done in her classroom is to offer special lunches to students who hit their reading goals. Those special lunches involve me bringing them something from Chick-Fil-A (a Southern delicacy!) on the Friday immediately after they reach their goal.

But it wasn’t always that way.

For the first half of the school year, the agreement was that if the students read their goal amount, then I would bring food at the end of the grading period. That could take up to nine weeks (if the kid’s a fast reader), and that’s like infinity in a child’s eyes. While she had a few kids read their books, most of them did not.

A new, better way

Then, this half of the school year, we’ve done it differently. Instead of waiting until the grading period is over (up to nine weeks), she gives them the reward less than seven days after they meet their goals. This has had a few effects on the process.

  1. It lets the other kids (in the midst of their own progress) see the tangible reward and encourages them to reach their own goals.
  2. It keeps the process high on everyone’s radar by making a reference every week or so.
  3. The kids who reach their goals and get rewarded? There is a 100% goal completion for kids who met their rewards in previous sessions (in other words, they are repeaters).
  4. There are significantly more students who reach their goal amounts on this new system (more than twice as many, I’d say).

I love the process of continuous improvement and how my wife can see something like this changing how the students are engaged in their reading program. Next year she can tweak it a little more and see if those numbers get even higher, but it’s nice to start off with something you know that works.

What it means for you

Thinking about offering rewards or incentives to your workforce? Make sure you don’t ignore the time element. It can help (or hurt) you in more ways than you might imagine.