Incentives, Bonuses, Raises and Tips
My beautiful girlfriend got mad at me a few days ago. We went to the nice breakfast spot in Park City, Utah.... I ordered a fancy avocado toast something and she ordered some cool acai bowl mixture thing lol. And then the cashier spun the iPad around with the question: How much would you like to tip?
I chose 0%.
We walked back to the table as we waited for our food and she ripped into me. She told me that many of these employees can barely survive on their paycheck and they depend on tips.
This prompted a deep discussion with my girlfriend and I around employee compensation, tips, and so on. Since then, I've done more research into this phenomenon too, especially how it relates to growth and learning in the workplace.
If you want a deeper dive into societies views of the swiveling iPad culture, I highly suggest reading this New Yorker article titled Has Gratuity Culture Reached a Tipping Point?. My favorite quote in this article is:
The gratuity, classically, functions as a “thank-you,” but it can also serve as a “sorry.” People most often tip in settings where the workers are less happy than the customers. The Freudian Ernest Dichter once described the compulsion as “the need to pay, psychologically, for the guilt involved in the unequal relationship.”
Think about that.
People are tipping MORE out of GUILT than they are as a THANK YOU for good for good service.
I think this is fundamentally shifting societies view on employee compensation.... and more important... employee productivity.
Back to my Avocado toast story.
My girlfriend was successful in making me feel guilt.
I decided to observe the employees. They were happy and smiling. The one person who was slicing the fruit looked like he was trying to create art with each slice. They greeted customers with genuine care and conversation. One person hand delivered our order, and it was the best looking avocado toast I've ever seen. And it tasted even better.
So in a mix of "thank you" and "guilt", i pulled a $20 bill out of my pocket and dropped it in their tip jar. Whether or not that influences positive employee outcomes... still remains to be seen though lol.
With that said, lets jump into today's lesson and take a look at how incentives, bonuses, raises, and tips tie into growth and learning in the workplace!
Understand which "incentives" inspire the RIGHT behavior change towards growth.
Lets start with some definitions:
If we take a look at these definitions.... we can see that Bonus's and Tips are tied to performance. Aka... if an employee does what they are supposed to do, lets give a little extra $$ to reward the behavior. And if for some reason the employee doesn't do what they are supposed to do, they are less likely to receive that reward.
This generally works... although even in my example above... the Tip is shared among all employees, even the ones that are underperforming. I've seen team bonuses reward low performers often. It drives go-getters like me crazy, and can actually make some top performers very frustrated.
Individualized tips and bonus's are great at rewarding the right behavior... although employees really are just performing the tasks that they were hired to do anyway. And hopefully tips aren't completely motivated by guilt as the data shows- they really should be in the form of gratitude for great service.
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Now lets talk about raises. Some companies offer a sliding scale when it comes to raises, and managers have the ability to reward the higher performers with a bigger raise. Some companies just give raises to keep up with inflation. Some employees expect raises for just doing their job. So the challenge with raises is that they are not always aligned with career growth, and typically only happen once a year.
Once in a while, a raise is actually tied to an increased skill set or value add that the employee provides to their company. It is a great step before a full promotion or title change.
Now to incentives.
I could probably write a whole book on the topic. I used to hate incentives.
I truly feel that career growth should be intrinsically motivating for a wide variety of factors- from building self confidence, to helping others grow, to having a bigger impact in the world and more.
So why do we need to incentivize?
Because we get busy. we get distracted. we get lost in our day to day activities.
We might have clear career goals, know our big why, and even have a great development plan.... although incentives (when used properly) keep us on track when the inevitable challenges and roadblocks present themselves.
The world is moving more towards microlearning, so I personally believe the best use case for incentives is "micro-incentives". It should be just enough to get us over that hurdle and back on our career growth plan. We shouldn't have to wait a whole year to get the reward like most raises. Here's some examples:
I'm sure there are endless "micro-incentives" that would get us back on track for our career growth.... I'd love to hear if you've encountered any best practices in the comments below!
And once we stack enough of these small wins together, we are in much better position for a more permanent raise or promotion.
Lets get into action!
ACTION TIME:
As always, I truly appreciate your time and attention today. Sometimes it just takes one lesson or one "incentive" to get us back on track towards career growth. We as leaders need to inspire growth now more than ever. I promise to continue to provide fresh, actionable content week after week without any strings attached- thank you for subscribing and sharing!
Your Friend,
Dan
Enterprise Account Executive Outside Sales Strategy | Deal Negotiation | Revenue Growth
6 个月??????