Excellence in an organisation can only be achieved on the basis of the overall willingness of its members to contribute significantly more than what they take out. In other words, they need to suspend their self-interest in the interests of others.
As the above has become more widely appreciated, companies have put in place various programmes to boost the contributions of their employees. Many of these programmes are of a financial nature such as incentive bonuses.
The payment of bonuses is consistent with the Legitimate Leadership principle of rewarding exceptional contribution. If applied as such, it is done in appreciation of past contribution and not as an incentive towards future contribution.
The risk of paying a bonus to secure future contribution is that it is likely to solicit greed from the recipients. In order to secure the same commitment, it becomes necessary to constantly repeat the payment as if it were an energy drug. And, as tolerance to the drug develops, more of it may need to be applied to achieve the same outcomes.
Recently, a client was faced with a major employee relations issue following the payment of incentive bonuses. The company’s performance in 2016 had been below expectations and the bonuses paid were thus of a moderate nature. The employees were nevertheless grateful for the payments as they understood the circumstances.
In 2017 the same company achieved exceptionally good financial results. This was, appropriately, communicated to employees. Inevitably, though, the expectation of receiving bonus payments considerably higher than in the previous year was created. In reality, the bonuses paid were only marginally better than the previous year. In fact some individuals received less (with the same individual ratings). The outcome of this was widespread employee dissatisfaction and disengagement. The company had spent millions to alienate their employees.
Paying people unfairly (below the market rate) is very likely to lead to dissatisfaction and it is therefore essential to get this right However, at best, monetary incentives will only be effective in engaging the will in the short term.
The Legitimate Leadership thesis is that managers who have the interests of their reports at heart will gain their trust and thereby their willingness to achieve team or company objectives. In this process, it is immensely helpful if the organisation’s objectives are well articulated and seen as being worthy of the suspension of self-interest.
Unfortunately values-based visions are often absent in organisations and as a result of this the focus moves to results. But what lies behind the results? Employees will be highly unlikely to be motivated by nothing else than enriching shareholders.
A team effectiveness survey was recently conducted for the engineering department of a Legitimate Leadership client. Of the 23 aspects surveyed, the absence of a “vision or objective which solicits the intention to contribute” was found to be the most problematical. Fundamentally this was because there was no passion to act as the reason for the suspension of self-interest.
The human capital director of another client expressed frustration regarding the de facto absence of values-based objectives in the company. In fact, there were three sets of objectives: one emanated from the off-shore parent company; one from the locally-based holding company; and one from the company itself. Nobody knew the origins of any of these and, when challenged, no senior manager could recite a single one of them.
The problem with this is that meaning comes from the “give” of the job not the “get”. People are motivated by the contribution they make and not the reward.
This leads to the necessity of developing a strategy to address real benevolent business contributions calling for the suspension of own interest for the bigger interests of the organisation and its stakeholders – not least of which is customers.
If the intention is to contribute, what would the collective values be which would lead to this being achieved with excellence? Having determined these values, the focus moves to behaviours – in particular, what changes need to be made to enhance the benevolent functioning of the group.
In considering the above, Legitimate Leadership recommends that consideration be given to what is appropriate in terms of contributions. This will include contributions which require the demonstration of both courage and generosity.