Rewarding people

June 21, 2011

Years ago, I worked for a software company, the first company I worked for after leaving teaching. My job lasted from 1992 to 1998, when the company imploded (a long story best told over a bottle of wine!). It was a small company (five or six when I started and 21 staff at the maximum). The boss, Allan, was the initial developer of the software and also the owner of the company.

Allan was not a good people or business manager. He was terrific at the visionary and computer and technology stuff, but he failed miserably in his interactions with staff and his knowledge of the day-to-day running of a business. Fortunately, he had employed some great people who looked after much of that for him, often without his knowledge.

Anyhow, that’s all a preamble to one ‘management’ technique of his that I never understood. When the company was doing well (as we did for several years), Allan rewarded staff with monetary bonuses at the end of the financial year (June 30 in Australia), believing that extra money was a great motivator and a suitable reward for our hard work, which had contributed to the company’s success.


I’ve never been in the ‘money as a reward’ camp — unless you’re very disciplined, cash is too easily frittered away on paying the bills or on day-to-day living expenses, or perhaps on an expensive meal at a restaurant you wouldn’t normally go to. It’s gone all too quickly, and is not remembered by the recipient. In fact, I can recall at least two substantial bonuses (in the thousands of dollars) in the time I worked there, but don’t ask me how much they were for as I’ve long forgotten. And don’t ask me what I used the money for, as I’ve forgotten that too — I know I didn’t purchase something I’d remember (like a holiday, or a large screen TV, or a computer, or a car). It probably went on paying a bit more off the mortgage.

I recall discussing this ‘money as a reward’ thing with Allan several times, but he was adamant that a bonus check or cash was the way to go. My argument was that we were all working so incredibly hard (60-100 hour weeks weren’t uncommon prior to a major release), that we didn’t have time to spend the money! I argued that it would be better to get a sense of each individual and tailor a bonus to suit them and their interests. Remember, we were a small company and very much like family — it wasn’t hard to find out what motivated individuals.

For me, it was travel, so a paid holiday to anywhere for a week — or even a weekend — would’ve been very welcomed. For one of my colleagues, getting her gym membership paid for the year would’ve been great motivation. For another, a gift voucher to a clothing or shoe store of her choice would’ve put a big smile on her face. Yet another was putting his three elementary school children through the private school system, so paying a term’s fees for one child would’ve helped him a lot.

Let’s assume that Allan gave us bonuses that ranged from $1000 to $5000, and he did this for all 20 staff — that’s a $20,000 to $100,000 outlay. If he’d just asked what we would’ve liked, he could’ve spent much less on each of us, and we’d have remembered the bonus for much longer than a couple of weeks. For example, to pay for me to have a weekend in a luxury hotel with meals covered as well, would have cost him less than $1000 (it was the early 1990s!); my colleague’s gym membership was probably about $500 for the year; the clothing/shoe voucher could have been for $500 or $1000; and the private school fees for one term for one child might have come in around $1000. So just on four people he’s outlaid a maximum of $3500, whereas to give us cash bonuses, he would’ve have laid out between $4000 and $20000.

Sure, there may have been tax reasons why he gave us cash bonuses, but knowing him as I did, I expect much of it was laziness and an unwillingness to really find out what excited people outside their work.

If you’re looking for ideas on how to reward staff with something other than cash bonuses, take a look at this list of Low Cost / No Cost Recognition for Teams and Individuals from Mentoric: http://www.mentoric.com/resource_low_cost_recognition.html

While bonuses and rewards may have their place, I get the most job satisfaction from sincere, unsolicited words of thanks and praise from colleagues and bosses for a job well done. Respect for what I do also goes an awfully long way.

[Links last checked June 2011]

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