I’m often asked, “What is the ONE best way to motivate your workforce?” Well, I immediately want to say, “There are a series of different techniques you can use”…and then go on to explain all of them, but I know nobody wants to hear that. They want one thing. So, I tell them the ONE thing that I’ve discovered is the most motivating technique (even though you really need to develop a positive connection between you and the employees before you do it).
The ONE thing is something I call De-linking. It is a totally different approach to giving performance reviews and raises and it calls for shorter, more focused, more frequent “coaching sessions” with the employees and the awarding of smaller, but more frequent raises. That’s the 20,000 foot view description of the process. To get a bit more detail, I am adding a short article I wrote a few years back that explains the tactic. After you read it, if you’d like greater clarification on the process, send me a note with your email address and I will send back an excerpt from Express Exec that features Andrea Lane, the hero of the story, explaining the process to others (in normal English!).
Changing Corporate Culture and De-Linking
“Get to the good part! How much of a raise do I get?”
Any manager who has given a yearly performance review knows how difficult it is for the employee to stay focused on the conversation when all they can think about is their personal bottom line! An important step to take when attempting to re-energize your workforce and improve your Corporate Culture, is to de-link pay raises from performance reviews.
A company can solve this problem by informing new hires and all personnel that raises will be given out periodically as merited and that performance reviews will be replaced with ad-hoc ‘coaching sessions’ where managers will help employees better understand what they need to do to earn their next raise. By doing that, both parties can focus on the conversation/training and communicate clearly without being concerned about dollars and cents as they are in a yearly review. Management should clearly identify what the company is looking for from the employee and give examples. Make it clear that performing at a certain measurable level will result in future pay increases.
OK, now comes the part where you have to follow through. Part of improving your corporate culture is nurturing and enhancing your credibility. The employees must trust you and believe that you, as Manager, and the company as a whole, will live up to its part of the bargain and be consistent about it. The promised raises must be given.
So how do you decide when and how to grant a raise if you are not doling out the pay increases according to a set time schedule. Through massive trial and error in the real world, I have identified a few steps that work quite well:
Step 1: Reward improving performance. When an employee has shown sustained effort over three to six months, bring him or her into the office and tell them that you have noticed the effort and are appreciative, give some specifics and then inform them that you are increasing their pay level by x%. Remember, in contrast to a yearly review, the raise amount is not nearly as important as the fact that it happened without expectation and it is all good news. The dynamics are different after you’ve de-linked—a raise could come at any time. With on once-a-year raise it has to meet the employee’s hopes and expectations or it is bad news. With de-linking, it is never bad news. It is simply one more step toward the higher pay they aspire to receive. And after they get that raise, management can start coaching them on what they have to do next to get another one. Now management isn’t the evil, greedy overlord—it’s the partner who is helping the employee succeed.
Step 2: Reward moments of brilliance. When an employee does something that results in gaining important new business, saving significant funds or some other noteworthy event (and overall performance is also acceptable) reward that individual with an immediate bump in pay. Other employees will see that positive ACTION gets immediate results and they will all be looking for their opportunity to do likewise.
Step 3: Be sure to coach everyone multiple times per year regardless of the fact that you are not operating on a set schedule. Privately, assess each individual at least yearly and if no opportunity has arisen for giving a raise, decide whether this is someone who deserves a bump up based on potential, general effort or steady, modest improvement. Yes, longevity fits in there somewhere too, but it can’t be the only determining factor. If you are giving out raises because someone is still around, you will not be improving Corporate Culture.
As an added benefit to de-linking, Managers will find they no longer have to “manage expectations”. When raises happen periodically and at no set schedule, employees realize that they can more easily affect the size of their own paycheck. Getting a small raise unexpectedly is a positive experience rather than a once-a-year disappointment because it is not as much as they had hoped. In fact, bestowing a series of small raises increases productivity far better than one large bump up per year.
For a more “live action” description of how to de-link in your organization, read Express Exec—A novel approach to outrunning the pace of change. Express Exec is a business novel about turning a company around in six months, demonstrating to readers exactly how to build trust with the workforce in order to facilitate rapid change.
And remember: If you’d like an excerpt from Express Exec that will help you to better understand how to begin employing De-linking in your organization, send me your email address requesting it. Contact me at Gary@smallbizsherpa.com