Using Compensation to Motivate Teams
3 January 2012
Read by 1935 persons
Title: Using Compensation to Motivate Teams. Some companies are well-structured and know how to value human capital because, with equal technology, it is the men and women who make the difference.
Currently, many employees expect a year-end bonus from their employers. And for good reason, if companies use December to take stock and review achievements in order to set goals for 2012, employees review their efforts and accomplishments to qualify for either new positions, if the company's organization allows it, or failing that, a salary increase or higher compensation.
This means that the employer must think twice before making any decision, because the company's competitiveness is at stake. And for good reason, satisfied and fulfilled employees even surprise their boss with the quality of their work and their level of involvement, always in a good atmosphere. Indeed, if the company has a high-performing and harmonious team, everything will run smoothly. Similarly, this will develop a sense of belonging that will propel the company to the top ranks, nationally and why not internationally.
Conversely, oppressed or underpaid employees cannot give their best if there is no recognition from management. As a result, quality decreases very visibly, much to the delight of the competition, which is only waiting for this moment of weakness to regain market share. Worse, these same competitors come to poach the good employees who are unhappy and aspire to a better situation.
Of course, it's the law of the market. The strongest hold the reins and the weak lag behind, waiting for better days when they can take the lead, but to do so, they must wake up early and have all the ingredients to achieve this goal.
Fortunately, in Morocco, not everything is bleak. There are well-structured companies that know how to value human capital because, with equal technology, it's the men and women who make the difference. Recently, the best employer award recognized five companies. It was their employees who gave them this opportunity to stand out as the best place to work. This initiative will further improve HR practices in national companies and give more visibility to people who aspire to more well-being in addition to a good compensation package.
Companies that have understood this are using the end of the year to reward the most deserving and encourage them to give their best. Their bosses even go so far as to use variable compensation to motivate teams in order to encourage them to put in more effort to achieve achievable goals, because in the end it's a win-win operation. There's nothing like making meritocracy the cornerstone of the company's success, as Ali Serhani, HR Consultant & Associate Director at GESPER Services, explains.
-----------------------------------------------
"All well-structured companies talk about fixed and variable pay or bonuses"
Ali Serhani, HR Consultant & Associate Director - Gesper Services HR Firm
How can managers make variable compensation a source of motivation?
To get straight to the point, I would say yes, and when the variable compensation offered is very attractive, it will not only be a source of motivation. In two words, the employer's message to his employee is very clear: "If the company wins through your results, you will also win, and not just a pittance", so it's a win-win relationship that is established between the two. This compensation should be so tempting that the employee will work tirelessly to obtain it, even if they have a very good fixed salary. Of course, you shouldn't ask the impossible of the employee. You shouldn't assign them objectives that even "Hercules", if he were among us, could not achieve. You should ask for the "top of the top" results, but within the limits of what reason can accept. On the other hand, if the employee is a weak performer, it's better to thank them. And if the company itself is a "dump" rather than a company, then the employee should quickly flee before it pollutes their mind and jeopardizes their skills and qualities.
What are the most commonly used compensation elements?
Currently, all well-structured companies talk about fixed and variable pay or bonuses. As a reminder, we only talked about variable pay a few years ago when it came to salespeople. Today, most well-structured companies offer all employees, regardless of their function, a variable component that is paid based on the results achieved by each individual. Example: An excellent communication campaign will allow the Communication Director and their team to receive an excellent annual bonus, especially if the company's image has been enhanced thanks to an excellent communication campaign. A Purchasing and/or Logistics Director will receive an excellent commission if the cost optimization policy has allowed the company to make excellent savings which, in times of crisis and in some cases, protect companies from the need for external financing.
It remains clear that the kings of commissions remain salespeople (Directors, Managers, Sales Representatives), which is quite normal because the more the company sells, the more the turnover increases, and let's not forget that the reason for being of a company is to make profit, nothing but profit, of course after having honored its legal, tax, social and sometimes even, in these times when we talk a lot about solidarity and CSR, societal obligations.
To conclude, there is no need for me to dwell on the classic elements of compensation, alongside the fixed and variable salaries of classic compensation, which are certain benefits in cash and/or in kind or in the form of expensive financing of diploma-granting training.
At the end of the year, employees expect a "gift" from their boss. Given the crisis facing some companies, how can you get the message across that there will be "nothing" this year, without, of course, creating a climate of mistrust?
You know, there is a Moroccan proverb that I am very fond of, which says that "sometimes things are so visible that even a blind person could see them".
We are then faced with two cases. The first: The company is doing very badly, and everyone knows it, both internally and externally. Consequently, there is no need to draw you a picture to understand that everything is going wrong. So, in this case, if the employees or their delegates ask for a gift or bonuses, then it is better to find them a psychiatrist as quickly as possible. Let them thank heaven that they are still receiving their salaries and that they have not been laid off due to reduced activity.
Second case: The company is doing well, and the employer wants to play the fool by trying to appear clever and pretending that everything is going wrong in order not to increase the salaries of their employees or give them a bonus, while they are receiving very attractive dividends. In this case, the social climate will be and remain execrable since the employer is, excuse the expression, a "liar". We are not asking them to share the profits, but simply to encourage the most deserving by giving them a share of the profits and making meritocracy the cornerstone of the company's success. So it's not rocket science. Everything is clear: it is enough, both on the part of the employees and the employers, to open their eyes and have a little common sense.
How to prevent a decision contrary to the expectations of employees from being a source of demotivation and causing a drop in productivity?
In my opinion, this question complements the previous one. I think it all depends on communication. You need to know how to communicate on time and well, that is, no double talk, whether with staff, delegates or unions, within the company.
When the situation is catastrophic, say so and share your problems with your staff, otherwise the ship will sink and with it the fate of several families. You need to explain everything to the staff through the channels of HR and employee representatives. If you communicate and are transparent, you will never have problems with your staff, your unions, or your suppliers. However, if you are the kind of person who uses double talk, then you will reap what you have sown, with all the consequences that this can entail, such as strikes, for example.
What advice would you give to managers?
In my humble opinion, ask yourself if you are indeed managers in the modern and ethical sense of the term. If the answer is an undeniable "yes", I would then ask them to move on to the next step, which consists only of meditating on this quote from former US President Theodore Roosevelt: "The best manager is the one who knows how to find the talent to get things done, and who also knows how to restrain their desire to interfere while they do them." The last words of this quote are very important because we sometimes have this tendency in our country to want to control everything to the point of stifling skills within the company, not to mention always wanting to control information, believing that "he who holds the information holds the power", whereas in fact, in a company, one holds nothing except that one delays the resolution of certain problems that end up exploding in our faces at a time when we do not expect it.
Nadia DREF
Lematin.ma
Published December 25, 2011.
Posted online January 3, 2012.
Currently, many employees expect a year-end bonus from their employers. And for good reason, if companies use December to take stock and review achievements in order to set goals for 2012, employees review their efforts and accomplishments to qualify for either new positions, if the company's organization allows it, or failing that, a salary increase or higher compensation.
This means that the employer must think twice before making any decision, because the company's competitiveness is at stake. And for good reason, satisfied and fulfilled employees even surprise their boss with the quality of their work and their level of involvement, always in a good atmosphere. Indeed, if the company has a high-performing and harmonious team, everything will run smoothly. Similarly, this will develop a sense of belonging that will propel the company to the top ranks, nationally and why not internationally.
Conversely, oppressed or underpaid employees cannot give their best if there is no recognition from management. As a result, quality decreases very visibly, much to the delight of the competition, which is only waiting for this moment of weakness to regain market share. Worse, these same competitors come to poach the good employees who are unhappy and aspire to a better situation.
Of course, it's the law of the market. The strongest hold the reins and the weak lag behind, waiting for better days when they can take the lead, but to do so, they must wake up early and have all the ingredients to achieve this goal.
Fortunately, in Morocco, not everything is bleak. There are well-structured companies that know how to value human capital because, with equal technology, it's the men and women who make the difference. Recently, the best employer award recognized five companies. It was their employees who gave them this opportunity to stand out as the best place to work. This initiative will further improve HR practices in national companies and give more visibility to people who aspire to more well-being in addition to a good compensation package.
Companies that have understood this are using the end of the year to reward the most deserving and encourage them to give their best. Their bosses even go so far as to use variable compensation to motivate teams in order to encourage them to put in more effort to achieve achievable goals, because in the end it's a win-win operation. There's nothing like making meritocracy the cornerstone of the company's success, as Ali Serhani, HR Consultant & Associate Director at GESPER Services, explains.
-----------------------------------------------
"All well-structured companies talk about fixed and variable pay or bonuses"
Ali Serhani, HR Consultant & Associate Director - Gesper Services HR Firm
How can managers make variable compensation a source of motivation?
To get straight to the point, I would say yes, and when the variable compensation offered is very attractive, it will not only be a source of motivation. In two words, the employer's message to his employee is very clear: "If the company wins through your results, you will also win, and not just a pittance", so it's a win-win relationship that is established between the two. This compensation should be so tempting that the employee will work tirelessly to obtain it, even if they have a very good fixed salary. Of course, you shouldn't ask the impossible of the employee. You shouldn't assign them objectives that even "Hercules", if he were among us, could not achieve. You should ask for the "top of the top" results, but within the limits of what reason can accept. On the other hand, if the employee is a weak performer, it's better to thank them. And if the company itself is a "dump" rather than a company, then the employee should quickly flee before it pollutes their mind and jeopardizes their skills and qualities.
What are the most commonly used compensation elements?
Currently, all well-structured companies talk about fixed and variable pay or bonuses. As a reminder, we only talked about variable pay a few years ago when it came to salespeople. Today, most well-structured companies offer all employees, regardless of their function, a variable component that is paid based on the results achieved by each individual. Example: An excellent communication campaign will allow the Communication Director and their team to receive an excellent annual bonus, especially if the company's image has been enhanced thanks to an excellent communication campaign. A Purchasing and/or Logistics Director will receive an excellent commission if the cost optimization policy has allowed the company to make excellent savings which, in times of crisis and in some cases, protect companies from the need for external financing.
It remains clear that the kings of commissions remain salespeople (Directors, Managers, Sales Representatives), which is quite normal because the more the company sells, the more the turnover increases, and let's not forget that the reason for being of a company is to make profit, nothing but profit, of course after having honored its legal, tax, social and sometimes even, in these times when we talk a lot about solidarity and CSR, societal obligations.
To conclude, there is no need for me to dwell on the classic elements of compensation, alongside the fixed and variable salaries of classic compensation, which are certain benefits in cash and/or in kind or in the form of expensive financing of diploma-granting training.
At the end of the year, employees expect a "gift" from their boss. Given the crisis facing some companies, how can you get the message across that there will be "nothing" this year, without, of course, creating a climate of mistrust?
You know, there is a Moroccan proverb that I am very fond of, which says that "sometimes things are so visible that even a blind person could see them".
We are then faced with two cases. The first: The company is doing very badly, and everyone knows it, both internally and externally. Consequently, there is no need to draw you a picture to understand that everything is going wrong. So, in this case, if the employees or their delegates ask for a gift or bonuses, then it is better to find them a psychiatrist as quickly as possible. Let them thank heaven that they are still receiving their salaries and that they have not been laid off due to reduced activity.
Second case: The company is doing well, and the employer wants to play the fool by trying to appear clever and pretending that everything is going wrong in order not to increase the salaries of their employees or give them a bonus, while they are receiving very attractive dividends. In this case, the social climate will be and remain execrable since the employer is, excuse the expression, a "liar". We are not asking them to share the profits, but simply to encourage the most deserving by giving them a share of the profits and making meritocracy the cornerstone of the company's success. So it's not rocket science. Everything is clear: it is enough, both on the part of the employees and the employers, to open their eyes and have a little common sense.
How to prevent a decision contrary to the expectations of employees from being a source of demotivation and causing a drop in productivity?
In my opinion, this question complements the previous one. I think it all depends on communication. You need to know how to communicate on time and well, that is, no double talk, whether with staff, delegates or unions, within the company.
When the situation is catastrophic, say so and share your problems with your staff, otherwise the ship will sink and with it the fate of several families. You need to explain everything to the staff through the channels of HR and employee representatives. If you communicate and are transparent, you will never have problems with your staff, your unions, or your suppliers. However, if you are the kind of person who uses double talk, then you will reap what you have sown, with all the consequences that this can entail, such as strikes, for example.
What advice would you give to managers?
In my humble opinion, ask yourself if you are indeed managers in the modern and ethical sense of the term. If the answer is an undeniable "yes", I would then ask them to move on to the next step, which consists only of meditating on this quote from former US President Theodore Roosevelt: "The best manager is the one who knows how to find the talent to get things done, and who also knows how to restrain their desire to interfere while they do them." The last words of this quote are very important because we sometimes have this tendency in our country to want to control everything to the point of stifling skills within the company, not to mention always wanting to control information, believing that "he who holds the information holds the power", whereas in fact, in a company, one holds nothing except that one delays the resolution of certain problems that end up exploding in our faces at a time when we do not expect it.
Nadia DREF
Lematin.ma
Published December 25, 2011.
Posted online January 3, 2012.
