Want To Keep (And Motivate) Your Best Employees? It's Not About The Money
Anita* was a model employee. As CEO of my previous tech company, I
had hired her to take charge of our bookkeeping and administrative
affairs. When Anita came aboard, I asked what she wanted in order to
feel fulfilled at work. "Harish, I want to do such a great job that
you'll want to pay me a six-figure salary and feel great about it." This
was a bit of a stretch--it was hard for me to conceive of bookkeeping
as a six-figure position. After doing the math, I saw how with the right
mix of hard work from Anita and better systems, she could indeed earn a
justifiable six-figure salary. I wrote a work-incentive plan that had
Anita making her target salary after 18 months, if she hit the right
benchmarks. "You'll be worth every penny if you make these goals," I
told her. I gave her a lot of autonomy and leverage to get her work done
well. Anita exceeded expectations, and hit every one of her targets
within 14 months instead of 18, earning the six-figure salary she richly
deserved. A success story, right?
Sadly, no. Two years after her
initial success, Anita was fired. Despite clear subsequent targets and
pay incentives, along with new assistants to support her, Anita’s
ability to deliver declined. The once-star employee had deteriorated
into an employee who filled only the basic job description and fought
with me over minute details of her work plan, just so she could claim
the monetary incentives. What happened to Anita? It took me several
years of making the same mistake with others to figure this out. And it
happens in all sorts of places, not just in entrepreneurial startups.
Archan*
is a a guy that I've worked with in the past and think highly of.
Archan just quit his $150,000+ per year job as a full-time search-engine
expert for a well-known and growing web company. He had been working in
his spare time for more than a year on a brilliant mobile app,
something that could be a boon to business travelers. Archan had finally
raised enough money to pursue this more fully. What did he have to
lose? "If my product's not a success," he said, "I can always go back to
the corporate world and get a job pretty easily.”
Archan’s
quitting represents the same category of mistake I made with Anita a few
years ago, and both are insidious because they represent a failure of
understanding on the part of both parties--the employee and the
employer. It represents a failure in relationship-driven leadership.
At
the core of these failures is how leaders and entrepreneurs, and
employees in turn, typically ask for accountability and are then
rewarded. Money is the carrot (or some proxy for money, like vacation
time, or a trip, or a bonus, that sort of thing). That works in an
industrial operation where there are fairly time specific goals to be
achieved. But the reality is, money isn’t as important as the
relationship. This charming and
insightful video
from RSA talks of the research underscoring why this true. The long and
short of it is, "pay enough so that money isn’t an issue, then give
your employees high recognition, autonomy, and the opportunity to learn
and grow," and watch them excel. Reflecting on this, I immediately
understood my mistake with Anita, and I’ve started to see more of these
mistakes in others today.
The six-figure salary threshold Anita
wanted was the level at which she stopped worrying about money. Sadly,
though, both Anita and I were conditioned to think of money as the main
motivator, so we wrote her subsequent work plans with money as a
continued focus. Had I known about the research in the video, I would
have changed Anita’s work-incentive plan and oriented it towards those
factors.
In my new company, I emphasize a relationship where I'm
supporting the growth and personal goals of each team member, like
getting them to a point (since I can’t always afford six-figure salaries
for all!) where a team member is achieving compensation where they feel
secure, and then spending a lot of time insisting on learning and
growing, recognizing them for their results, and giving them the space
to fulfill some of their entrepreneurial visions. I adore working with
entrepreneurs and try hard to find those people who have big ambitions.
What
about Archan? This one’s a little harder. Archan has a brilliant mobile
app idea and demo, but all brilliant ideas and demos are worth little
without execution. The missed opportunity is that his mobile app concept
is aligned with a forward-thinking strategy for his old company. They
could have both grown together. Unfortunately, as Archan himself told
me, "My old company doesn’t care about me and my work, they just care
about meeting short-term revenue targets." Although it made sense for
Archan to leave and pursue his dreams, the alternative would have been
for Archan to find a way to stay in his old company and bring his mobile
app to the table there in some sort of symbiosis. Sure, this is a
stretch, but a workable one.
In the past year, I've had a half
dozen of my friends quit or prepare to quit their jobs in a bad
economy--well-paying, high-profile positions--to pursue their
entrepreneurial vision. These friends have all contemplated
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