Home > Ideas > Who gets the Spoils?

Who gets the Spoils?

I have worked with more than one organisation where, after the incentives and bonuses are declared, people who didn’t make the cut grumbled among themselves about the unjust review systems and totally lopsided incentives program that were implemented by the Top Management.

And this is a routine occurrence at many organisations across the country. How I wish managements had spent time to read this amazing book ‘Execution’ that I reviewed just 2 days back. The book highlights the lacunae in the conventional Reward and Recognition programs adopted by most leading organisations.

Incentives have a flat structure – numbers are allocated to each resource without taking into account the factors that are relevant to the team-member’s market. Even if the factors are taken into cognizance the additional load in targets is not commensurate with the increased opportunities in the role-holder’s market. And usually the programs do not recognise efforts taken to Cut Costs or Revenue Enhancement activities undertaken by an individual. The targets are usually uni-dimensional.

Employees feel inspired and motivated when their talent and high-quality output get noticed and rewarded. Managers who notice, recognise and promote quality talent are able to retain people much longer. Dissatisfaction usually rises when everyone is measured the same yardstick and the reward system tries to please the lowest common denominator.

An employee who is working in a mature market with many competitors and another employee who is working in a new market with huge opportunities and few competitors should not be measured the same way. There could be a 3rd person who at the end of the year failed to reach fresh sale targets but had excelled in huge process optimization, cost cutting and added revenue on after-sale service.

In the conventional system the 3rd person would not get any incentive, the second person would get graded the best and walk away with the highest rewards and the first person would also make the cut and get an incentive, but lower than the second employee.

If a thorough analysis of the performance is made based on quality of effort, use of innovative methods and degree of difficulty in addition to the regular yardsticks you will find that the 3rd employee has delivered the best results and the 2nd guy the least.

Organisations need to worry when they are promoting mediocrity. In order to retain quality talent organisations have to innovate and adopt exciting people practices that recognise and reward merit … one size does not fit all and pleasing everyone is not the best way to stay productive and profitable.

Spoil your best talent with The Goodies and they will keep performing at their best!

P.S.: I agree that Sales Incentives and Bonuses become due only when the organisation is profitable, but it wouldn’t be fair to penalise performers when the rest of the team fails.

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  1. June 11, 2012 at 4:55 pm

    It is as cogent a post as ever. A happy workforce is an effective workforce. But diligent workers should be rewarded suitably, as you have rightly pointed out. Nurturing mediocrity may prove lethal in the long run indeed.

    • JayadevM
      June 11, 2012 at 7:46 pm

      Hi Umashankar,

      You are right! Pay peanuts and you will get monkeys. 😉

      Create a difference through your performance incentive program so that the performers really get differential treatment. And the others should get yanked upward – they should aspire for more. Most programs try to level difference and pull down the high-performers to the level of the regulars.

      But the definition of high-performance needs to change from a uni-dimensional index to a more comprehensive one.

  2. Jamy
    June 12, 2012 at 2:07 am

    You got it right again Jay!

    • JayadevM
      June 12, 2012 at 3:55 am

      Thank you, Jamy!

  3. Abhinav
    June 12, 2012 at 8:12 am

    Actually it is – first deserve and then desire – many a times we put the cart b4 the horse and then grumble..

    • JayadevM
      June 12, 2012 at 9:42 am

      Hi Abhinav

      Thank you for the visit. You are right! We need to prove with performance and then demand the reward – the results should compel one’s superiors to recognise and reward you.

      But Management needs to create an environment where merit rather than showmanship is promoted and their programs should motivate people to perform!

  4. Kailash
    June 13, 2012 at 10:42 am

    Bulls Eye J, you know in my last company (will not take name) one our JAVA champ put up the paper and by Super boss ask me to talk to him and also told me to add his name in next award list 🙂 This guy was so good in his work and have saved my team/company on many embarrassing situation and he was paid so very less. He got two awards till that time and award was one certificate and 1500/- Rs gift voucher. As you rightly said if you peanuts you will get monkeys. Now this JAVA champ is working for IBM research and development section and he is doing work of his love and getting appreciates (monetarily) as well. Bottom line is if you really wona reward than mean it by your actions.

    • JayadevM
      June 13, 2012 at 11:28 am

      Another useful anecdote, Kailash.

      Thank you for sharing it here. Regards

  5. June 14, 2012 at 1:16 pm

    I agree, working in the corporate world myself it is saddening to see how the shrewd and fake lot get the most when they deliver the least.

    great post

    • JayadevM
      June 14, 2012 at 5:09 pm

      Thank you for visiting and for sharing your thoughts. Regards.

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