Right Tasks + Right Rewards = Great Performance
Most traditional organizations focus their performance and reward policies on attendance. They pay employees simply to show up. That doesn’t make sense. No wonder they worry why employees are not performing.
But there is no rocket science here. Do you want quantity and quality? Then you need to reward quantity and quality. Do you want productivity? Then you need to reward productivity. Do you want service? Then you need to reward service. Etc—as simple as that.
But how do you create progressive performance and reward policies? Let us share what we learned from Belasco & Stayer’s ‘Flight of the Buffalo’ and from visiting the most progressive firms around the globe.
Before designing your progressive performance policy you first need to define a mission for the organization. Only when that is crystal clear can you start defining great performance.
Most progressive firms have crystal clear missions. Handelsbanken’s mission is to achieve higher profitability than the average of peer banks in their home markets.
Then, to achieve your crystal clear mission you need to translate it into great performance at all levels and corners of the company.
- Start with the top-management that defines great performance for the company.
- Then let all teams (or departments) define great performance for the team or department, within the context of great performance for the company.
- And last, let each employee define great performance for her or himself, within the context of great performance for the company and the team (or department).
Perform the right tasks
For employees to achieve great performance they need to be able to perform the right tasks. And to be able to perform the right tasks they need to own the right responsibilities.
These are the criteria you need to think about when defining the right tasks. They need to answer the following questions:
- "What task will we do?” Tasks need to be deliverable. So, they need to be concrete, tangible and specific.
- “How do we know when the task is done? ”Tasks need to be measured by a specific indicator. This must signal when you have accomplished the tasks.
- “By when will the task be performed?” Tasks must have an end date. There must be a date set by when the tasks will be done.
- “Who will perform the task?” There needs to be a person responsible for the task. This person must be named as the one responsible for getting the task done.
Set the right rewards
When the right tasks are set it becomes time to determine the right rewards. And who knows better what performance needs to be rewarded? And what is an effective reward for a specific task? That is, of course, the employee who performs the task. That’s why employees are the best persons to determine their own rewards.
A few things to keep in mind:
- Employees need skin in the game. Performance must truly matter – it must have consequences. It must be crystal clear to everyone in the organization that the one who performs is rewarded, and the one who doesn’t perform is not.
- Reward results, not efforts. Too many employees are rewarded for working hard, rather then getting the right shit done. That’s wrong. Reward those who achieve great performance. So be clear about what performance you want to accomplish and how you can measure what you are doing.
- Make rewards transparent. Rewards for performance should be fair to everyone in the organization. So, make performance and rewards transparent. In that way everybody can benchmark his/her own performance against peers.
- Blend different kind of rewards. Make sure to reward employees with a mix of monetary and non-monetary rewards. Think about tangible things like profit sharing and bonuses, but also less tangible things like pride and recognition. These are as many ways to reward employees as there are roads to Rome. Use your imagination. Be creative.
Great performance seems to be the simple sum of combining performance of the right targets with setting the right rewards. But in all these steps, there is one important disclaimer—employees must be involved in the process!
Because as long as leaders, or worse, a bunch of anonymous outside consultants own the responsibility for designing these policies, they will be a source of frustration.
Instead, transfer that responsibility to employees and it will be a source of motivation and success.