Lesson Learned #19
We have a fairly well outlined performance compensation plan for all of our staff based on the actual attainment of measurable results. Not willing to leave a good thing alone, we dreamed up a concept a number of years ago that random financial rewards would be a novel way to recognize people’s performance. To make it more colorful we decided to give the money out in unique ways.
The first recipient was a long term manager who had done a great job with one of our manufacturing accounts. So we searched around for a silver attaché case and filled it with money. It turns out that quite a lot of money doesn’t look like very much when you put it in a briefcase, so we went back to the bank for smaller denominations and then also layered it with cut newspaper underneath. It looked impressive when we were finished. A couple of the senior partners invited the manager out to dinner and then asked him to come out to the parking lot where the rental car was parked. They gave him the keys and asked him to open the trunk and take out the silver briefcase. He wasn’t exactly sure what they were up to and was a little reticent to open the briefcase. When he did and saw all the money he was both relieved and thrilled.
The second and last time was for a consultant who had done a great job in a hospital laundry. Not a very pleasant place to work. He did a tremendous job for the hospital and never complained about the difficult conditions. The partners gave him the money in a hospital laundry bag. He was thrilled.
What was not anticipated was the reaction everyone else in the company would have. No one was thrilled. There may have been one or two people mildly amused at the theatrics, but the general response to both events was distinctly negative. The basic question most people had was what specifically did these two do to deserve this type of reward? It seemed to many to be arbitrary and it isolated individuals when they were both clearly part of a larger team effort. There were even quiet murmurings of partners playing favorites, which unfortunately made the recipients targets for fairly critical peer reviews following the rewards.
The lesson learned from this experience was to be very careful when handing out rewards. For rewards to be effective the expectations and measurement needs to be very clear so that people understand the manner in which decisions are made. People tend to be accepting and even collectively supportive if the criteria and measurement is reasonably fair. Without that, rewards can easily backfire. When it comes to handing out money, we learned that novelty doesn’t trump transparency.
