Keyword: rewards

When the discussion of how to compensate and reward employees comes up, almost invariably someone comes up with the idea of the “employee of the month” award.  Sometimes the name of the award is less tired, maybe it’s outstanding associate of the year.  Or the top achiever of the quarter.  It doesn’t matter what you call them, these kind of awards are a bad idea.

Every time I tell people not to fall for this easy trap in the employee compensation world, they object.  They complain that I’m harping on them all the time to think of ways to reward employees that don’t involve money.  They say: “here’s a great way to reward people for good performance, it’s cheap, what more could you want?”  And there are hundreds of companies that proclaim to make “tools to motivate employees” who push this junk (here’s a link to one).

For the first clue as to what’s wrong with these kind of awards, walk into your local fast-food joint, distribution company, or supermarket.  There, over in the corner, you’ll see it.  The dusty brown frame with little brass name plates, and maybe faded photos taken from employee badges.  The employee of the month award plaque.  Look carefully.  What’s the most recent date?  If you’re lucky it will only be six months ago.  I’ve seen some as old as three years, with not an update since.  I don’t think I’ve ever seen one with more than ten months on it.

The first and most obvious problem is that it’s hard to keep up the momentum with these things.  With all the things you have to do to run a business every month, this inevitably falls to the bottom of the list.  So for a couple of months you wrestle with it to get it done at the last minute, then you find yourself a month or two behind, finally it just falls by the wayside.  What a message this sends to the employees: you can’t even find time for this simple little form of recognition.

Employee of the Month

Another problem is also obvious.  Look closely at that plaque.  See any patterns?  Yes, you see the same couple of employees over and over again.  And why is that?  Because you really only have two choices when awarding these things: 1) be honest and give it to the best employees, or 2) rotate it around and give it to everyone once.  In the first case, the same few employees will consistently rise to the top.  In the other case, the award becomes a joke to the employees.  Which is why it’s always done the first way.  And the pattern is inevitable.  What a wonderful message it sends to your employees, that only a handful of them are worth recognition.

Which brings us around to the effect of these awards on the employees.  Does it really reward the winner?  Or do they feel awkward for being singled out in this beauty contest that really doesn’t mean anything?  They know there is no money in it, they know the choice wasn’t really objective (more on that later), and they know you’re not recognizing them because you want to, but because it’s the end of the month and someone has to get the silly thing.  They also know they are either going to get a lot of grief from their friends for winning it, or a bunch of resentment from others who didn’t.  So they sheepishly accept it, and the flaccid applause of the folks gathered in the lunch room, and go back to work.

What do the non-winners (the other 99% of the employees) think about it?  More often than not, they feel like…  losers.  To make themselves feel less like losers, they badmouth the award, and tell everyone that only idiots and suckups get it.  And they probably give the winner a hard time for winning it.  They certainly don’t say to themselves: “gee how do I get one of those?”

Which brings me around to the final point: how do you make this decision?  If the choice is truly objective (top sales, lowest complaints, etc.) you need to resign yourself to the fact that you have no control over the award.  And constant repeat winners are inevitable.  And the losers, who already know they are losers, certainly don’t need this award to rub their noses into it.

Or, you can make the award be more subjective: “most eager”, “best team player”, or maybe “best overall”.  This puts you back in control, but then it introduces a number of problems.  Like accusations of favoritism.  Or having it seem arbitrary.  Or second-guessing from all corners about why you chose who you did that make a baseball argument look like a picnic.  Ugh…

The more you think about employee awards, the less you’ll think they are a good idea.  I have a number of thoughts on better ways to reward and recognize your employees.  Stay tuned to CLWill.com for more.

This is by far the most common question I get asked by employees.  In my experience, there are only three ways to get a raise (in decreasing order of success):

• Excel at what you do, and don’t look like you want/need/care about a raise.
• Have a very carefully orchestrated conversation with your immediate supervisor.
• Hold the organization hostage.

As I noted, these are in decreasing order of potential, with the first being successful about 90% of the time, and the last being successful about 10% of the time.

Excel at What You Do

This is the easiest, most effective, and most rewarding way to get a raise.  You simply what you do extremely well, focus on making the organization successful, take on important problems without being asked to, make yourself indispensable, and don’t look like you want/need/care about a raise.

Perhaps the best way to look at this is to put yourself in your manager’s shoes.  What do they want and need from an employee?  Someone who is really good at what they do, doesn’t complain, solves problems for them, and always keeps the organization’s best interests up front.  When they get that, they naturally want to reward it.  And, most managers are not very creative in the ways they can think of to reward people.  So they throw money at them.

If you think about it, someone who behaves this way is a gem, someone they want to keep happy, motivated, and on the team.  It’s just good business to give them the one thing they know how to give — money.

How you react is an important part of this.  You should be surprised, and very appreciative.  Not drippingly appreciative, but honestly thankful.  And this is also a good time declare your loyalty.  It doesn’t have to be “I’m never leaving”, but a good, solid “I like it here, this is fun”, works wonders.

Now, this doesn’t help if you want a raise today, but I promise, if you keep this up, it works.  And if you do it consistently, you’ll notice that each time the money increases in frequency and amount.  It gets more fun as the game goes on.  It works for them, works for you, works for years…  it’s all good.

Have a Careful Discussion

This is less successful and effective, and is extremely hard to pull off correctly.  But it can work.  The key is to sit down with your boss and have a meaningful discussion about you and your value to the organization, with a subtext of how underappreciated you feel.  It is hard to have this conversation without sounding like Dagwood Bumstead going to Mr. Dithers.  But if you are truly going unnoticed, and the above isn’t working, this is an option.

This discussion should focus quite clearly on your value to the organization, and the quality and importance of your work to the firm.  Keep the focus on your work, your value, and your recognition.  Don’t bring up money at the beginning, and don’t make money they only solution to the problem.  Trust me, it’s one of the few tools managers have, so they can think of money as a solution without your help.

You perhaps can include some discussion of comparable wages elsewhere, but never discuss salary surveys, and be fully prepared for this to fail.  Discussions about other organizations end up sounding like a discussion with your mother: “if Billy Johnson jumped off a cliff, would you?”  Situations are different, and you are different.  As often as not, using this kind of tactic takes the discussion irreparably to other places you don’t want to go (like your performance, or your competition, or…).

Absolutely never make the discussion be about why you need the raise.  The company doesn’t care anywhere near as much about you as a person as they care about you as a resource.  And it’s difficult to say how much you need it without sounding trite or like a cliché.  Also, you open yourself up to the manager thinking: “hey, I’m underpaid too, what makes you so special?”  So never, ever say: “but I really NEED this raise”.  It’s a quick path to not getting it.

Remember, this isn’t a supposed to be a discussion about money, it has to be a discussion about value given for value received.  You need to show why you are so valuable.  Always try to take it back there, to the organization, to the wonderful work you do.

However, to be honest, most of the time they know what you do and how well you do it, and they have consciously chosen not to give you a raise for some reason.  It is rare that your manager will sit back, think for a minute, and say: “gee, I guess you’re right, you’re far more valuable that we’ve ever thought, and you are underpaid”.  Most of the time, they know you, and your work, and they feel they are doing just fine by you, thank you.

But every now and again, you’ll point out things they didn’t know, and you’ll make a case.  Even more rarely, they will see that you are concerned and try to fix it, but that usually falls under case #1 above.

This conversation is incredibly hard to do without sounding either cocky or that all you care about is the money.  But it can work if done right.

Hold the Organization Hostage

This is by far the riskiest strategy, and it backfires as often as it works.  In fact, I can’t recall the last time I saw it work in person.  But I’ve heard that it does.

It goes like this, you get another offer for more money somewhere else, and go into your manager with “match it or I’m out of here”.  The offer can be from another company, or better yet, from another part of the company you are in right now.  Obviously an offer in the same company is much better, you can check on the validity of the offer more easily, it demonstrates to your current manager that people they know think you are worth more money, and you don’t have to change health care plans…

Wherever it is from, it absolutely has to be a bonafide offer, and one that you really would accept.  For three reasons: 1) your manager may well check up on the offer, 2) if you do get a counter offer and it turns out later to have been a lie, you are in deep trouble, and 3) you may well need the offer if they fire you on the spot.

This usually backfires (see my post on the manager’s side of this here) and when it does, it’s usually not pretty.  One way I’ve actually seen it backfire is for the manager to steal the offer from you, and take the job themselves.  Really.  Amazing, but true.

But on occasion this hardball tactic works.  However, I strongly recommend against this unless you are a) a major league sports star or b) really willing to leave.  I usually fired people who tried this on the spot…

Other Ways

All the other ways, especially demanding a raise, trying to wave salary surveys in peoples’ faces, or joining together with others to protest (or a union), usually just get managers ticked off and looking for ways to lose you.  This sounds trite, but again, put yourself in your manager’s shoes.  They want and need good resources who make things easy for them.  Squeeky wheels who make things difficult are not what they want or need.  Good managers will find a way to lose them quickly.

So, in summary, getting a raise is a lot like getting a loan: they give them most often to people who don’t need them (or at least don’t seem to need them).  The best and most effective way to get raises, and lots of them, is to be really good at what you do, take things off your manager’s plate, and never look like you are only working for the money.  It will come in waves.

Immediately after an organization decides to do performance reviews, the first thing they ask is: how often should we do them?  There is very real tension between providing enough feedback to the employees, and making painful busy work for the management team.  Fortunately there is a good compromise that many people choose.

I recommend that you do performance reviews on a twice-a-year cycle that includes a comprehensive annual review with a mid-year “checkup” review.  This approach has several important advantages:

• Employees get feedback more than once a year, which is a real benefit.  Most managers simply never give enough feedback, and this kind of system forces it to happen.
• The burden on the team to go through the process is lessened by the lighter weight mid-year reviews.
• You can offer pay increases and other rewards more than once a year. (I firmly believe in tying pay changes to the performance review.)
• Practice makes perfect - if you only do reviews once a year, people get out of practice.  By doing them more frequently, managers get better at delivering both good and bad messages, and employees get used to getting feedback.

Reviews don’t have to be that hard.  If you would like to see examples of what I think performance reviews should look like, see the performance review whitepaper elsewhere on the site.