Rewarding progress – building a culture of continuous improvement

Rewarding-Employees1

 

I’m leaving on a jet plane, I actually know when I’ll be back again…

Every time I leave home for work – which is 3 out of every 4 weeks – that classic John Denver song plays in my head but of course I do know when I’ll be back again.  Not sure why John Denver is the soundtrack of my business travel but he is – thanks JD.

Flight 569 from PHX to MCO was delayed about an hour and it’s already a 4+ hours flight which will put me in Orlando at about 11:38pm local time – just in time for me to go to my favorite middle-of-the-road hotel in Orlando, the Orlando Marriott Airport.  I’ll be there for the next five nights while I spend the week with my team.  Some people think I’m crazy to commute from Phoenix to Orlando for a job but I think I’m the luckiest guy there is.  I have THE BEST team in Orlando.  The technology and service teams are committed to excellence in a way I haven’t seen in more than a decade.  On the other side of the U.S. my home and the world around me in the Valley of the Sun is just magnificent.  I am truly a lucky guy.

OK Ernie, is this just going to be some introspective discourse on your life?  Ummm, no actually I do have a point inner conscience dude…man…OK I’ll get to it.

The Point

The point of this post is that while I was waiting for USAirways Flight 569 to take off I read a really nice article in the Harvard Business Review about the similarities between 12-step programs and successful change management programs in the corporate world.  One thing that I have known for a long time based on personal experience was validated by an empirical study in that article.  People need to be rewarded incrementally in order to drive sustainable results.

What that means is this – if you’re responsible for a project team and that team is has a budget of say $1M and a timeframe of say a year, typically the team would be eligible for project bonuses of ~ $10K.  So let’s say there’s 10 people on the team – gosh I love simple math – so that means that each person could potentially earn a $1K bonus at the end of the 12 month project, provided of course that its on time and on budget – or at least within acceptable tolerances.

So what happens in a typical setting?  I’ll tell you, the project comes in more or less on time and on budget through a variety of machinations by the team and the project manager and after being whipped to within an inch of their lives, a group of professionals that on average probably earn $50-$75K a year get a check for $1K.  Now that’s not a small amount of money but after the death march they’ve just been on it often comes across as more of a, “well heck yeah you SHOULD pay me more for that pile of S*IT project you just put me through.”

I tried an experiment once early in my career as a product manager.  I went to the project manager and asked what the budget for bonuses was for our project.  I was told $12K.  I then went to the project sponsor and asked to have $6K in gift cards instead of the $12K in bonus money.  I got some strange looks but I was given the $6K on the understanding that there would be NO bonuses at the end of the project.

With the $6K I bought gift cards valued from between $5 and $50 for things like gas, groceries, online shopping, etc.  During the course of the project I also established incremental milestones.  At each milestone I would award the team gift cards.  Periodically during the course of the project I would surprise and delight individual team members with a gift card here and there.  By the end of the project two things happened:

  1. I had about $2K in gift cards left over.
  2. Everyone on the team was still engaged and morale was at an all time high.

So what did that tell me?  It told me that people like to be recognized more directly and personally for what they’re doing.  I personally handed out each gift card with a hand shake and a thank you.  At the end we had a party and we gave out the rest of the gift cards – some we passed out and some we gave out as prizes as part of a trivia game, by drawing names out of a hat and the like.  It was a carnival atmosphere and everyone on that project team told me afterward that they looked forward to working on the next project with me.

I’ve written on the topic before but I still don’t see it in common practice today and so I continue to write.  I am pleased to see that some of the things I learned through trial and error may be coming to a theatre near you, validated by research and published in respected journal like HBR.

If anyone would like to know more about my approach to team incentives, please let me know.  As always, thanks for reading!