I recently went to a conference on employee rewards systems as a function of employee retention. Among the retention ideas presented were:
- “Cause for Applause” Certificates
- “Worthy of Note” Gift Awards
- “Essential and Appreciated” Wall Hangings
And the ever popular and timeless…
- Employee of The Week, Month, Year, Decade… blah, blah, blah.
I found myself remembering the dark and dreary days of 1991-1993, when outplacement work, not unlike today, was more popular than staffing. I had managed to land an unusual gig. The company brought in a couple of senior recruiters to handle their reduction in force instead of the full-time HR staff. The concept had several considerations:
- To keep full-time HR staff from having to play “bad guy” with the half of the employees being terminated and then having to turn around and maintain positive relations with the half who were staying (I call it “Pontius Pilate Syndrome”).
- To select seasoned and experienced behavioral experts accustomed to evaluating and predicting human reaction to positive and negative motivations, to ensure that “RIF’ed” employees received proper counseling to cope with the issues accompanying termination.
- To enhance the “corporate spin” of this process, with the intent to provide as much assistance as possible.
- To accelerate the process so the company could “unload” these folks as fast as possible and get on with the business of doing business. No funeral should last all day.
When my fellow counselors and I exchanged notes, we also discovered that we were all ex-service folks with combat arms experience. Coincidence? I don’t think so. One terminated person in particular comes to mind whenever I hear about employee award systems. He was in his 17th year with the firm. He had the “old school” attitude about the corporate-employee contract: “I’ll work in your best interests, and you’ll work in mine.” Over the years he had moved quickly through the ranks and was an icon to those who worked around him. So, of course, he was being RIF’ed. He had remained calm throughout the exit processing. No signs of visible anger or indications of possible physical rage. He was cooperative and informative ó but only up to what was asked, and nothing more. He responded, but did not participate. When we finished the paperwork and information exchange he left my office for clean out his own, under the supervision of a “rent-a-spy” security guard. He was then escorted out of the building, separated “forever.” About 30 minutes later the guard stuck his head in my office and told me that the exiting employee had a question and wanted just one more minute of my time. The staff ó we called ourselves the “Hit Squad” ó had all worked out hand signals ahead of time to quietly and secretly indicate potential threat situations. I was being given the “all clear” signal by the guard. I assumed a now angry employee wanted a chance to have his final say, and I figured he had worked for the company long enough ó and my hourly rate was high enough ó to justify giving him his “day in court.” The employee entered my office with a copy paper box and dumped the contents on my desk. It was chocker block full of wall plaques, framed certificates, paper weights, name plates (plural), business card holders, desk toys, company rings, business card holders, decorative hour glasses, clocks, pen and pencil sets, framed award ceremony photos, framed company newsletter articles complete with his photo extolling his value as an employee, and all the other trappings of your average company reward programs. He turned and walked out of my office, his point clear enough that it need not be marred by speeches or diminished by histrionics. In his own way he had made his position very clear. To this date, I wonder if any company award ever made it to his office walls again. I took the box, repacked it and went to the VP of HR’s office and gave it to him. He missed the obvious symbolism of the act (why don’t we ever seek “human” qualities in “Human Resources” management candidates?). He asked me what he should do with it. I decided not to give the obvious and uncomplimentary response ó after all, I still had a check to collect. In the early 1990s a generation was taught that, although loyalty upwards may still exist, it certainly had ceased to exist downwards. The last vestiges of the 1950s-1980s work generation of “thirty year service award” employees faded, probably forever. With the boom years of the mid and late 1990s this change became more obvious, and more costly, as the new wave of employees sent the message: “I saw what you did to my father. Keep the certificates, just send cash!” Recruiters fussed and fumed over offer packages that included sign-on bonuses, computers, new cars, paid pre-employment vacations, and other lucrative inducements to try and make up for the fact that the new age candidates and employees knew we would drop them in a New York minute if the company stock price went down more than $2 a share. We all spoke ill of these outrageous candidates “sticking it to us” with their unprofessional requests for sign-on, retention, or even counter-counter offers. But were we angry at their apparent greed, or the fact that they had learned the lesson we had taught so well: “Employees are valued, right up to the moment we can do without them.”? Despite the obvious changes, HR departments still act like awards programs are sufficient motivation to honor and acknowledge the contributions of top employees and encourage retention. But the top employees are smart enough not to be impressed with a chunk of “Things Remembered” crystal artwork with their name on it versus a shot at lasting longer at the company than the next bad day on Wall Street. I mean, if the goal is to keep the best and brightest, why treat them like they are stupid?
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How mature is your hiring process? Answer these 5 questions and find out.
- “Thanks for saving the company $50,000 with your new idea. Here, have a pen and pencil set.”
- “Ten years of loyal service deserves a brass and silver business card holder!”
- “Great idea to enhance our processing of receipts and reduce the daily cash float; it will save us thousands in interest income every week. Here’s a 50% off coupon for Mickie D’s.”
- “You saved our number one customer. Sounds like somebody needs a name plaque!”
Sometimes you have to admit it, we make it easy for our corporate business partners to consider those of us in HR/staffing as backwards. I don’t know what bothers me more: the fact that they think we really consider this stuff critical, or the fact that so many of us actually do think this stuff is critical. Every company tries to reward employees through the annual review, but that is usually as much a function of cost-of-living adjustments combined with the bare minimum a company can get away with in terms of actual growth. If, for example, the average review is posted as 3%, then on average, the high end will be about 6%. In other words, in the case of two employees, both making $35,000 a year, the difference between “showing up” and excellence is about $1,000. With an average of 2080 working hours in a year, an employee doing adequate work gets a $.50 an hour wage increase, and if she’s among the best and brightest, a buck. For those employees who possess a combination of consistent excellence and time with the organization, the goal should be to motivate them to remain. Long-term employees cost more per hour, but are substantially more efficient due to their acquired internal knowledge. Combine that with excellence, and you have the core employees who “get it done.” So, what is a worthwhile alternative? How about something worthwhile. Based on a formula that is computed by both “number of years” with the company and the employee’s performance, the company can offer some real benefits. Here are just a few ideas:
- Reduction of employee contribution for health benefits. Employees ranked in the top five percent do not pay for their health benefits. Employees in the six-to-ten percent bracket only pay half the amount of other employees.
- Enhanced benefits. Employees ranked in the top five percent can sign up for two additional “options” offered by the carrier; employees in the next tier, one additional option. The options are obviously paid by the employer.
- Enhanced vacation. Employees in the top five percent get an additional two weeks paid vacation; the next tier, one week.
- Reduced work week. Employees in the top 10% can opt for a 4-day, 10-hour workweek if it’s not currently offered to all employees.
- Work options. Employees in the top 10% can opt for one “home office” day a week if it is not currently offered to all employees.
- Bonuses. Employees who are consistently in the top 10% receive an end-of-year cash bonus ó exclusive of other bonus programs and representing a percentage of their salary ó for every continuous year they remain as such.
- Severance guarantee. Employees in the top 20% are guaranteed a severance bonus exclusive of any other program in the event of a RIF.
The benefits are tied to consistent performance; if you drop in the rankings, you lose the “benefit.” Using the measurement tools of performance and time with the company gives you the ability to give new “fast risers” the motivation to stay and continue to improve, while also encouraging long-term performers not to “give up a good thing.” There are several good reasons why you should use “enhanced performance” packages for your best and brightest:
- It makes them less likely to move to a company that lacks “enhanced performance” benefits.
- It increases their cash expectations to compensate for what they are giving up if they did look outside the company, and makes it less likely those cash expectations will be matched.
- It is a common trait for people to respond to real and tangible evidence of being appreciated. In corporate America, money is the most sincere form of flattery.
- It is ultimately cheaper than replacement, especially among the top 20% of your employees.
There are those who will see this as a dangerous path, since it does alert your best and brightest as to exactly who they are. What if they decide to “hold you up” for more than you want to offer? Well, first of all, your best and brightest already know who they are. Secondly, in negotiations it is always better to take the initiative and set a price rather than find yourself having to counter one already assumed. An additional advantage is physiological. Most people are motivated to be fair when they see that they are in fact being treated fairly. After all, it is your best and brightest we are talking about. Beads were once enough to purchase Manhattan, but that was 300 years ago and the joke was on the Dutch. The Native Americans did not own the island in the first place; nor do you own your employees. If they were for sale, I doubt the cost of a desk clock would come even close. You are after the best and brightest, aim a little higher. Meanwhile, pass the catalogue, I want to see what is new in this years line of desk clutter. Have a great day recruiting!