Two Ways To Make Your Company A Happier (and Better) Place to Work
I cross-posted this over at the great Slacker Manager as part of its Free-for-all-Friday. Only made a few edits here 
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Growing up, I was crazy about two things: sports and technology. So when I found a job posting to go work at ESPN.com, I stayed up for several weeks perfecting a website demonstrating why I was the perfect candidate for the job. Interviewing there was awesome–everybody had TVs at their desks with live feeds for all the games (I could tell you stories about conversations between the on-air personalities during commercial breaks!), and the first question I was asked by all 8 people who interviewed me was about sports. What was my favorite sport? Favorite teams? Name the commissioners of all the leagues. What did I think of the upcoming NHL season, and what were my thoughts on the MLB strike (I interviewed on the day the MLB strike was averted in 2002, and a cheer went up in the newsroom at the players and league reached an agreement very close to the deadline.) It was only after making sure that I was as passionate about sports as everybody else there did the interviewers talk about the technical requirements for the job.
The message was clear: we only want to work with passionate sports fans, so if you want a job here, we’d better make damn sure you’ll fit in.
So I ended up taking a $17k pay cut to go work in Bristol, Connecticut (a hell-hole if there ever was one) with displaced sports fans from around the country. The first year working with passionate sports fans was awesome–there was a gym on campus, any game you wanted to watch available at your desk every night, ultimate, softball, basketball, and gatorball games during work hours, and tickets to NY-based teams floating around (although not as many as you’d think ) The work itself was also exciting and challenging. I spent 7 days a week from May to August building a new fantasy football system with other passionate people for what was, at the time, one of the coolest brands in the world to me.
Halfway through the summer, when I started burning out, I told myself it would be worth it in the end.
It wasn’t.
Come bonus time, I probably got less than what I spent on dinners during the summer months spent working late at the office. And my raise was the standard “you didn’t mess up, here’s 3%” raise that’s supposed to make you feel extra good about all that shareholder-value-building you did.
Now, what added to my sense of unfairness was that salary info came out into the open. It almost always does, which is why secret salaries are a baaaaaad idea. But what I–and many of my co-workers–learned was that our salaries were a function of how well we negotiated, and not how well we performed. This practice of paying people is unfortunately standard operating procedure in most big companies.
So what are the lessons here?
First, when an individual is intrinsically motivated–like when my co-workers and I were building the best freakin’ fantasy football system in the world–he or she will run through walls to make something happen, and will have fun doing it. The problem occurs when people start doing what they’re doing only for the money, like when I was burning out. As Alfie Kohn wrote in 1993, “About two dozen studies from the field of social psychology conclusively show that people who expect to receive a reward do not perform as well as those who expect nothing. This result, which holds for all sorts of rewards, people and tasks, is most dramatic when creativity is involved.” In other words, carrot-and-stick motivation is not effective.
And second, inequitable pay practices in corporate America contribute to much counter-productive wasted time, energy, and dissatisfaction. Kohn sums it up: “I recommend that employers pay workers well and fairly and then do everything possible to help them forget about money. A preoccupation with money distracts everyone — employers and employees — from the issues that really matter.”
Synthesizing the take-aways means that you should
- hire people who believe passionately in your company’s vision, and
- pay people equitably, and then take their minds off of money so they can continue to be excited about fulfilling your company’s vision
It’s not brain surgery, but it does take courage to change or establish a new way of doing things, especially when it comes to a sensitive topic like pay. But it can be done, and it will make your people happier and more productive, and your company better off and a more desirable place to work.
I’ll leave you with a success story that underscores the benefits of establishing a vision and paying equitably:
One of my favorite examples of a company that took this advice is Marshall Industries, a huge electronic components distributor based in southern California. Long locked into a pop-behaviorist sensibility, myopically concerning itself with the “dos and don’ts of financial incentives,” they finally realized that none of this advice seemed to help and that the problem was with the premises on which the use of any financial incentive was based. It was the very existence of sales commissions and other rewards that was preventing the company from moving forward. Only when this light bulb clicked on did things begin to change. After a full year of listening, reflecting, and “losing sleep,” CEO Rob Rodin and his associates first got rid of all contests and other practices that set employees against each other, then eliminated management incentives, and finally replaced sales commissions and everything else smacking of pay-for-performance with a base salary. [10] The result: turnover (one of the many hidden costs of reward systems) was reduced by 80%; morale soared; salespeople began coordinating their efforts more effectively; and sales, along with profitability, grew dramatically. About five years ago, when Marshall began its de-incentivizing process, its stock was about $8 and its annual sales were at $575 million; today, its stock trades in the $30-$40 range and annual sales have hit $1.3 billion.
Like all valuable things in life, it takes work to establish, but the rewards (ironically) of implementing such a system are worth it!
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