December 29, 2011 § Leave a comment
In Part 1 of this series, I wrote about giving compensation increases for the wrong reasons. It is very easy to get sucked into doing this because that is the way it has always been done. That said, I neglected to talk about positive, meaningful and motivating variations for compensation increases. This takes more creativity and a deeper understanding of each employee and what motivates them.
Typically, acceptance of additional responsibilities and/or significant improvements with current responsibilities are the primary positive and meaningful reasons raises are given. Some people want more responsibility and love to be rewarded when a job is well done. For some, this is all it takes for motivation.
But as I stated in Part 1, one-time pay increases tend to bring euphoria for a short period of time, but then dwindles fairly quickly in most people. For these people, try a variable component to the compensation package. Examples could be quarterly bonuses for meeting specific company financial goals. Another variation is to award individuals for completing a specific project that brings value to the company. Goals should be clearly defined for the award and payment given promptly after goals are met.
Regardless of the compensation plan, heed my advise. Completely think through what people are being incentivized to do. People tend to literally do what you pay them to do. Keep compensation plans simple. Try to think about what people might do, both intentionally and unintentionally, to achieve the payments. For example, if some is paid to increase profitability, quality may be sacrificed in order to meet the profitability goals and obtain the award.
Be creative. Be motivating. Be simple. Dont give in to the easy way out.
Keep your eyes open. Inspiration can come from anywhere.
This post was continued inspiration from Sunny Taylor. She is an inspiration to my daughter and to me. Thank you Sunny for all you do.