Just after writing my last post I had a discussion with another business owner. They asked me to clarify my belief that all employees should receive incentives to produce better results for the business.
This business owner was right, I do need to clarify, because not all “employees” need to receive financial or other tangible incentives to generate better results.
Am I confusing you? It’ll all become clear …
When referring to employees, I don’t include management or executives. Yes, technically they are employees, but they often have different motivations than the non-managerial staff.
In Jim Collins book, Good to Great, he explained the discovery that the performance of a company over the long-term really has nothing to do with giving financial incentives to management.
His study showed in convincing detail that companies with the highest paid management, who over and above their million dollar plus salaries received even larger bonuses - didn’t necessarily do better than the non-incentivized competitor company.
In fact, companies that gave less financial incentives to their management actually did better over the long-term.
Why? Because to sustain the success of a company, the leaders need to be in it for more than the moolah. The leaders that showed the greatest SUSTAINED results weren’t in their positions to ‘just make money …
… They were committed to the company and were working towards a grand plan and turning the companies dreams into a reality.
By having such a leader in place, employees naturally become more committed and loyal to the business.
The challenge is that this kind of a transformation (for the many companies that don’t have such leaders) doesn’t happen over night. It can take years.
And because it can take so long (though it’s worth all the hard work for the business to get there) one of the best ways to keep employees interested, challenged, and motivated to produce results is to provide them with financial incentives.
The fact is, employees today want more time off, more money, and more control in their workplace. This is especially true for the younger generation.
And again this is why, providing incentives (in financial, time-off, gifts and other such forms) to workers that do their job more efficiently, effectively and get better results, makes sense. In essence, you scratch our back, we’ll scratch yours.
If your company has a magnetic environment where everyone is already working together for a common vision and goal, maybe incentives aren’t needed. Or maybe they’ll improve the results you are already seeing.
You see, the truth of it is, if you don’t continually push forward to make your business better, and continually test to improve results, you’ll never achieve full potential. And that’s probably something that all your staff, business and YOU yourself deserve. Isn’t it?
To your success,
Michael Zipursky
