๐๐ฒ๐โ๐ ๐๐ฎ๐น๐ธ ๐ฎ๐ฏ๐ผ๐๐ ๐ฏ๐ผ๐ป๐๐๐ฒ๐. ๐ฐ
(Aside: in the UK we have many slang words for moneyโฆ wonga, wedge, bread, bangers and mash, readies, shrapnel, wad, filthy lucre)
Now, during this cost-of-living crisis, it’s only natural that many of us would like more money in our pocketsโฆ especially when the holes in our pockets seem to be getting bigger and BIGGER.
With that in mind, many leaders are probably considering how they can get more money in their team members’ pockets without stoking the fires of inflation. ๐ฐโก๏ธ๐๐ฅ
If this is youโฆ.
You need to knowโฆ that not all methods of remuneration are the same.
Bonuses and wages have different effects on peopleโs motivation and decision making.
Now, you might be thinkingโฆ. โAndrew, why should I care?โ
Well, if you want team members who areโฆ
โ> engaged
โ> persistent (keep going with challenging tasks and projects)
โ> taking โhealthyโ decisions
โฆ you must care.
๐๐ก๐๐ญ ๐๐ซ๐ โ๐ก๐๐๐ฅ๐ญ๐ก๐ฒโ ๐๐๐๐ข๐ฌ๐ข๐จ๐ง๐ฌ?
Healthy decisions are those which support the long-term sustainability and flourishing of the business, your customer, the team, and the individual.
Unhealthy decisions can be made by anyone on your team. From the highest (Senior Execs) to the lowest (trainee).
Examples of unhealthy decisionsโฆ
๐ Pumping the stock price by shifting sales to a share-friendly quarter
๐ Holding back on investments that may negatively affect short-term value of business, but hugely increase long-term value of the business (link below)
๐ฌ Misselling a product to a customer
๐ฉน Using temporary/dodgy solutions to finish tasks and projects faster
๐๐น Treating one customer well, and treating another customer poorly
๐ช๐ต๐ ๐ฑ๐ผ ๐ฝ๐ฒ๐ผ๐ฝ๐น๐ฒ ๐บ๐ฎ๐ธ๐ฒ ๐๐ต๐ฒ๐๐ฒ ๐๐ผ-๐ฐ๐ฎ๐น๐น๐ฒ๐ฑ ๐๐ป๐ต๐ฒ๐ฎ๐น๐๐ต๐ ๐ฑ๐ฒ๐ฐ๐ถ๐๐ถ๐ผ๐ป๐?
Well, sometimes, people donโt know any better.
However, othertimes, they occur because people have been offered the wrong kind of motivationโฆ BONUSES
You see, bonuses can lead to people making unhealthy decisionsโฆ. Decisions that are focused on achieving the bonus, rather than best supporting the long-term health of the business, customers, team, and individual.
Now, this isnโt true in all cases. But researchers have found that itโs true in many. (Comment below if you want the link to researchโฆ Iโll dig it out for you.)
BONUSES can lead to poor choices (like pretending that a project is okay) and errant behaviours (like when individuals trample-on-others so they achieve their bonus) .
๐๐ผ๐๐ฒ๐๐ฒ๐ฟ, ๐๐ต๐ถ๐ป๐ด๐ ๐ด๐ฒ๐ ๐๐ผ๐ฟ๐๐ฒโฆ.
BONUSES are an external form of motivation, and therefore a controlling form of motivation.
And people who are externally motivated often lack long-term persistence and engagement with tasks (proven in multiple tests).
So, bonuses can also be tremendously counter-productiveโฆ greatly reducing the motivation of team members.
๐ช๐ต๐ฎ๐ ๐๐ต๐ผ๐๐น๐ฑ ๐น๐ฒ๐ฎ๐ฑ๐ฒ๐ฟ๐ ๐ฑ๐ผ ๐ถ๐ป๐๐๐ฒ๐ฎ๐ฑ?
โ Increase wages rather than pay bonuses โ wages are less controlling, and tend not to lead to unhealthy decisions.
โ If you must use bonusesโฆ. Focus these on long-term goals and performance. Consider other criteria than โsales wonโ or โtasks completedโ. For instance, โcustomer feedbackโ or โcontribution to the teamโ.
โ Connect people with the values and big-mission (e..g, free books for all kids) that drives the business
Whatโs worked best in your business?
I would love to know. Please connect with me on LinkedIn and let me know.
