Motivating Employees _ Bringing Out the Best in Your People - Barry Silverstein [28]
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Remember that material rewards for teams should encourage and promote teamwork, not create divisiveness. The objective is to reinforce the notion that, by working as a team, individuals can reap benefits not otherwise available to them.
Some companies use the team rewards approach to establish friendly competition among work groups in an organization. While this may work in your organization, it is wise to proceed with caution. Pitting one team against another can indeed result in higher achievement, but it can also create an intensely competitive spirit that can turn teams against one another in a ruthless effort to win. Additionally, be careful to set objectives that are not counterproductive. For example, if you establish a team objective related to a quantifiable number, be sure that the team is legitimately performing as required, not just focused on reaching that number for the sake of the reward. It is important to maintain a sense of greater organizational good if you choose to reward teams for competing with one another.
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CASE FILE
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BELIEVE IN YOUR PEOPLE
When the Brunswick Corporation went through a restructuring, morale was sinking. Then CEO Jack Reichert quintupled the authority to sign off on capital expenditures for everyone in the organization. For instance, the $100 expense that you once could approve became $500. According to Reichert, this left no question in people’s mind as to whether they were trusted. After two years, Brunswick was a stronger, more productive company.
SOURCE: Reinventing Leadership by Warren Bennis and Robert Townsend (HarperCollins, 1997).
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Company Rewards
A common motivational material reward at the division or company level is a bonus or profit-sharing program.
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CASE FILE
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HOTMAIL MILLIONAIRES
When Hotmail was in its developmental stages, twentysomething founder Sabeer Bhatia wanted to light a fire under his people. So, to communicate both the urgency of the project and his desire for big ideas—and to give everyone a stake in Hotmail’s success—he gave out not $100 here or there but stock in the company. In less than two years, he had amassed 20 million clients and had sold Hotmail for $440 million. And as stock owners, fully half of his staff had earned millions for their contributions.
SOURCE: It’s Not the Big That Eat the Small…It’s the Fast That Eat the Slow by Jason Jennings and Laurence Haughton (HarperBusiness, 2000).
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Typically, a profit-sharing program distributes payments to employees based on the organization’s successful achievement of a financial or productivity objective. Since all employees contribute to that objective, each individual is eligible to receive a portion of the profit. Sometimes this portion is based on longevity or seniority. Profit sharing motivates individuals to work on behalf of the entire organization to get the maximum financial reward.
Stock options are another material reward that companies use as a motivational tool. A company can grant stock options as a “signing bonus,” or tie the options to a combination of employee seniority and longevity. Typically, once an employee reaches a certain number of years of employment, the option to purchase stock, or receive stock without cost, can be exercised.
Stock can have a higher or lower perceived value than cash, depending on the financial strength of the company and the long-term performance of its stock. If the company is private, the stock may have a somewhat lower perceived value, because it cannot be sold on the open market.
Nonetheless, stock is a material reward that can be beneficial to both the company and the employee in that it represents a longer term commitment for both parties.
Material rewards, whether cash, goods, or stock, can be the foundation of an effective rewards system. But they can be even more motivational when accompanied by nonmaterial recognition that is genuine.
Essential Skill IV
Motivational Leadership