Dan Schneider

Business Performance: You'll Get What You Pay For
February 15, 2008

At a business reception a few nights ago, a client began talking about how disappointed he is in the performance of some of the people he believed to be his superstars. “How can someone who makes over $200,000 a year become ungrateful and develop an entitlement attitude and believe he doesn’t have to work anymore?,” he asked. 

Saying that “stuff happens” did not satisfy his curiosity, so I had to go a little deeper. If you only take away one point from this article, let it be this: Rewarded behavior is repeated behavior.

Every culture has a body of knowledge called folk-lore. Sometimes it is quoted so often that it becomes a “cliché” at worst an “adage” at best. In any case, one of the most common expressions in our country tells us that we “get what we pay for.” We pay managers to produce results, and sometimes there is no correlation between results and rewards. Just as stagnant water is a breeding ground for mosquitoes, paying people well who produce less than expected results is a breeding ground for the entitlement attitude.

The net effect of rewarding underperformance is that we get more of it the next time around. True, numbers may be better than the last set. But, did your management team get the best possible results? Did they leave something on the table because they aimed too low and hit the mark?

Let’s talk about how to get the most from your team. It’s true that not everyone works for money, but money is a convenient way of keeping score and it is a common reward system. Let’s look at some of the steps you need to build into your reward system to insure consistently high levels of business performance.

• Clearly identify the results you expect, and stick with them. Focus (remember that word from last time?) on what you want to have happen.  

If, for example, you want to increase customer longevity, don’t focus on avoiding customer turnover. Focus on keeping customers.

• Involve the people closest to the production or service delivery in system process improvements. 

Follow the example of Debbie Fields in believing that “Good enough isn’t.”

• Reward performance that exceeds expectations. The reward doesn’t necessarily have to be cash; but it does have to be more than just cash.

Some people say that money isn’t a motivator. Experience shows just the opposite. Money does motivate, but it does not always satisfy success needs on a long term basis.

• Keep people informed about progress toward goals. We seem to have a need to “know the score”, so develop feedback systems that let them know how things are going.

• Celebrate success. Many business owners believe that celebrating success is recognizing people for just doing their jobs. In effect, that means they don’t believe anyone can ever do better than average work.

In the end, your business performance is a compilation of the individual efforts of the people working for and/or with you. The easier you make it for people to know what you want; the more you reward excellence and achievement, and the more you stay focused on what you want to have happen, the more likely you are to get what you pay for.

Posted by Dan Schneider on February 15, 2008 | Comments (0)