#448  from Innovative Leader Volume 9, Number 1          January 2000

FORUM—from our readers

Nuts and Rewards

This Forum section has featured quite a few examples of how certain rewards, instead of driving innovation, actually inhibit innovation.  So let me give you an example of how rewards in my division have been extremely effective.

Our annual salary increases and bonuses, I assume, are pretty much the same as in other companies.  Almost everyone complains that they ought to receive more money.  In fact, it seems that it’s human nature that people never have “enough,” whether they are paupers or billionaires.  Therefore, super raises and super bonuses aren’t that useful--except to retain people who may leave for a substantially higher salary.  But most of us will never get an offer for twice our salaries.

The vice president of my division has taken it upon himself to give an annual gift to each person in the division. The average cost of the gift is about $50.  That, by itself, won’t stimulate anyone’s innovative abilities.  However, what makes this special is that each gift is personalized. The vice president frequently tours the facility and makes sure to chat with each staff member.  Somehow, he remembers everyone’s name and gets to know something about the person.  Either he’s got a great memory, or he jots down the information right after a visit.  We know he also learns a lot about us through our supervisors.

Anyway, the gifts arrive at our homes to celebrate our birthdays.  Attached to the gift is a personal note signed by the vice president.  The note thanks the recipient for a specific contribution, and includes a happy birthday wish.  Gifts include a fancy knife (to a gourmet cook), subscriptions to Business Week and Inc. (for a technologist who is becoming interested in the business side of work), and a box of quality jams (after learning that person enjoys big breakfasts; that’s why he doesn’t eat lunch).

These presents, more than anything else (including bonuses) in the company, has made this division become extremely dynamic.  We would do anything for our vice president, and we will do anything we can to let him achieve his goals, the goals of our division. 

The gifts don’t dent the financial columns in any significant manner.  The personalization of these gifts, however, does involve a significant time commitment to the vice president.  But I’d bet this time commitment is far less than the time that he would have to sacrifice in dealing with unhappy and complaining staff.  We achieve beyond our objectives. 

Anonymous

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