At HCG, we find that the New Year is a popular time to review strategy with clients and look for fresh ways to create superior value and remain competitive. Yet at times, we see some silly things take place in the silly season. Often there are ghosts in the corporate machinery and lessons to be learnt!
Ghost of Christmas Past – What gets rewarded gets done.
A few years back, one of my new clients routinely paid all its 100 employees an annual Christmas Bonus of $500. This bonus was the only monetary reward given apart from salary and was not tied to any performance measure. Suffice to say, disgruntled and under achieving shop floor employees would wait until they received their bonus and then resign. Once I pointed this out to my client, we reallocated that money into a $100 Christmas Bonus and retained $40,000 for much needed staff training. In more recent years, both staff and company performance have benefited from the additional training and the regular exodus of unhappy staff just after Christmas has gone.
Ghost of Christmas Present – When we ask for A. but provide the conditions for B. we send mixed messages.
Last weekend, a premium healthcare provider invited me to their Christmas Party. At the party, the venue ran an open bar from 6pm until 1am, served very little food and offered no coffee or tea. A memo from the CEO a week prior, directed all staff to conduct themselves responsibly at this public venue. Yet, many staff seemed wasted by 11pm and nothing like the picture of health and well being the CEO hoped for.
Ghost of Christmas Future – Reward consistently for delivering on what is strategically important.
What steps could you take in future to align strategy with employee bonuses and rewards?
Consider these five principles:
(i) Validity – Define and measure employee performance accurately.
(ii) Expectancy – Reward employees in a timely way.
(iii) Equity – Make sure all employees have access to rewards.
(iv) Reliability – Differences in pay levels must be based on actual performance.
(v) Rewards – Give monetary and non-monetary rewards using (i) thru (iv).
Align rewards, staff attitudes, values and organisaitonal culture with what is strategically important. If you are unsure or can’t say what your strategy is, we can help. Give us a call at HCG on +61 407 301 200.