Thanks for setting this topic up for some discussion Sean. I think there are a lot of really good questions around this issue and I will look forward to what Jason has to say about this topic. There are also some other folks that I would love to hear from on this topic, and I am going to issue a few “call-outs” before I start scribbling my thoughts on the topic.
Because of the work that they do and because of their interesting perspective on things, I would really love to know what these folks think about this issue:
Charee Klimek @ChareeKlimek
Paul Hebert @incentintel
Jason Seiden @seiden
Bret Simmons @drbret
Susan Burns @TalentSynch
Anne Perschel @BizShrink
Love to hear from you whether you are a thumbs up or a thumbs down on pay for performance.
My personal opinions on pay for performance were largely shaped by two of my own previous work experiences. The first was four years in the United States Marine Corps. I did not get paid very much. I had to work really hard. I spent a lot of time away from my loved ones. I was in harms way. At times the living conditions were pretty rough. And I loved it. I was highly engaged and that had nothing to do with the compensation. The lesson that I took from this experience was this…if you want people to be engaged in their work, give them work that matters and let them do it out loud and together and reward them together.
The second was one of my sales gigs, years ago. This particular sales shop that I worked in was all about the money. When you interviewed to work there, one of the most important questions they asked was “are you motivated by money?” There were some sales people on this team that hung really big numbers up month in and month out…and with a couple of exceptions they were complete assholes. They were assholes to each other to the rest of the team and even at times to customers. And about once or twice a year one of them got caught doing something illegal or unethical and was fired. Stealing sales, gaming the commission structure, fudging paperwork, etc. The lesson that I took from this experience was this…regardless of what kind of team or organization you hope to build, if you hire pirates you are going to end up as the captain of a pirate ship. If you hire people that are solely motivated by money, then you should not be surprised when they put their wallet ahead of your wallet or ahead of group performance, customer satisfaction, policy, etc.
I am not a fan of pay for performance. I think it rarely has the benefits that are attributed to it and more often than not has negative consequences. I think that organizations and managers are really very poor at understanding behavior; I think that they are even worse at accurately evaluating performance and worse yet at having candid, adult conversations with employees about performance.
Hire good people, give them the resources that they need, tell them the truth about everything and work relentlessly to get policy, busywork and yourself out of their way. They will deliver for you, and when they do reward them as a team…and if you ask them, they will tell you how.