The Employee Reward Philosophy That Equals Higher Retention

Bruce Tulgan
May 21, 2019

Bruce Tulgan

Founder of RainmakerThinking, Inc. and Top Expert on Leadership Development and Generational Issues in the Workplace

Congratulations! That great new person has been hired to your team - and they are eager to start adding a ton of value. As a highly-engaged leader, you understand how to create an upward spiral of performance very well: define performance standards, spell out expectations, collaborate on next steps and benchmarks, follow up and adjust. That structure and support goes a long way toward engaging and developing today's best talent. You just hope that great new hire decides to stick around for a while.

 
[LOOKING FOR MORE LEADERSHIP TIPS? DOWNLOAD THE MANAGEMENT FUNDAMENTALS EBOOK]

 

Strong Leadership Is the Foundation of Employee Retention

The foundation of any successful retention strategy today is this: build a strong leadership culture. Without leaders who are engaged enough to help people develop skills and grow their careers there will be no hope of retaining even the most dedicated employees.

But what if you are already a strong, highly-engaged leader? You are a master of the management fundamentals: you have regular 1:1 meetings with each direct report, spell out expectations and guidelines, track performance, hold people accountable, and help them solve problems every step of the way. Perhaps you've even gotten turnover to skyrocket among the chronic low performers hiding out on your team.

But unless you want that turnover trend to affect your high performers, too, you must take your employee retention skills to the next level. The way to do that is focus on how you recognize and reward top performance.

 

Don't Fall for "Fairness" - Use Differential Rewards

One of the most pernicious management myths holding leaders back is what I call the Myth of Fairness, that is, that the way to treat people fairly as a manager is to treat everyone the same regardless of their demonstrated performance. If you take a step back it is easy to see why this is absurd: when there are limited resources with which to reward people it only makes sense to do more for some people and less for others, based on what they deserve.

Of course, if the manager is failing to support employees from the start, differential rewards will never be fair, either. The key is providing the guidance, direction, support, and coaching necessary for everyone on the team to first do their best and then have opportunities to go above and beyond to earn more. A solid process for tracking and documenting employee performance is invaluable in this process!

 

The Philosophy of Control, Timing, and Customization

Once you've embraced a system for providing differential rewards, it's time to make those rewards even more valuable by making use of this simple philosophy: control, timing, and customization.

Control. Put people in control of their own rewards by spelling out exactly what they must do in order to earn them. The classic example is this: say you have an employee who doesn't want to work on Thursdays anymore. You, the manager, must tell that employee exactly what you need from them by each Wednesday at midnight in order to have Thursday off.

Timing. The closer in proximity the reward is to the performance in question, the more powerful the reward will be. Of course, it's rare that a manager will be able to provide any reward immediately. But even if you are only waiting a few days to reward someone, make the connection between their performance and the reward you are giving clear. Be explicit - reiterate exactly what they did in order to earn that reward.

Customization. The more you can identify non-financial rewards that matter to each individual employee, the greater a value proposition you can make to them in exchange for their best performance. The most common and effective non-financial rewards I have identified are: changes in schedule, options for working relationships, choices for tasks and responsibilities, learning opportunities, and choices for work location or workspace.

 
[LEARN MORE ABOUT HOW BRUCE CAN BUILD A WINNING CULTURE IN YOUR ORGANIZATION]

 


Subscribe to Our Blog

The post The Employee Reward Philosophy That Equals Higher Retention appeared first on RainmakerThinking.

Bruce Tulgan

Want Bruce Tulgan for your next event?

Find out more information, including fees and availability.
Find Out More
Keep Reading
No, Your Superstars Don't Want to Manage Themselves
Bruce Tulgan
Bruce Tulgan
December 03, 2019
How much of my management time should I spend on each member of my team? It's a question ...
How to Manage Performance for Creative Work
Bruce Tulgan
Bruce Tulgan
October 25, 2019
If performance management is all about driving continuous improvement in productivity and ...
Soft Skills: Teaching Personal Responsibility
Bruce Tulgan
Bruce Tulgan
October 01, 2019
When it comes to teaching personal responsibility, the key is shifting someone's focus on the ...
No, Your Superstars Don't Want to Manage Themselves
How much of my management time should I spend on each member of my team? It's a question many managers have asked themselves at some point. Should they spend more time with the low performers? The average performers? Should they split their time equally among everyone, regardless of performance? (The short answer to that last one is no.) But wha...
Read More
How to Manage Performance for Creative Work
If performance management is all about driving continuous improvement in productivity and quality--and helping employees strike a balance toggling back and forth between speed and mindfulness--where does creative work fit into the puzzle? How can managers effectively manage creative work? We know that creative work can be extremely valuable. ...
Read More
Soft Skills: Teaching Personal Responsibility
When it comes to teaching personal responsibility, the key is shifting someone's focus on the factors that are within their own control. Most often, when an employee struggles with personal responsibility, it is because they are unable to see beyond the factors that are outside their control. Of course, those outside factors will always be pr...
Read More
Don't Lose Your New Hire--Stay Top of Mind
As important as it is to be very selective when hiring, you also must do it fast! If you move too slowly, you will lose your new hire. The two watchwords of your selection process should be rigorous and fast. Even if you succeed in expediting your selection process, make a solid offer, and receive unconditional acceptance, your prospect is st...
Read More
How Managers Can Help Reskill Your Organization
We are on the brink of a reskilling revolution in the workforce, and it has already begun in organizations such as Amazon and Wal-Mart. The increasing pace of change has made it clear to workers of all ages that in order to remain competitive they must continually improve. Skills that were relevant a week ago may no longer apply today. Conventio...
Read More
When Managing Large Teams, Use Your Chain of Command
Managerial spans of control have gotten wider and wider. As a result, most managers are responsible for too many people. Without a doubt, this has contributed to the under managementepidemic. Faced with managing a large team all most managers can do is throw up their hands in frustration. Often, they are thrust into this position with no guid...
Read More
Help! I Need an Employee to Go the Extra Mile
A lot of managers ask me, "What about the employee who does just enough work and does it just well enough and nothing else? How do you motivate that person to go the extra mile?" The first question managers should ask is: why does it matter? After all, if an employee is performing well enough to meet the requirements and expectations of their...
Read More
Make Your Management Concrete: Turn Company Values into Actions Employees Can Take
Building a strong culture, one that attracts and retains the best talent, is a huge undertaking for any organization. Undoubtedly the most difficult part is aligning the entire company on whatever values--old or new--constitute the core of the culture. Managers play a pivotal role in creating that alignment. Of course, it's not easy. There is no...
Read More
Stick to the Basics: The Leadership Wisdom of Dave Christiansen
Dave Christiansen, CEO of MKC If asked to describe his leadership philosophy, Dave Christiansen may offer you this quote from Walter Lippmann: "The final test of a leader is that he leaves behind him in other men the conviction and the will to carry on. The genius of a good leader is to leave behind him a situation which common sense, wit...
Read More
Employee Burnout? That Could Be a Sign of Undermanagement
Burnout has officially been recognized as more than just a cultural phenomenon. The condition is now recognized by the WHO, probably to some relief from the HR departments who have been trying to combat increasing levels of burnout for years now. According to some research, burnout is responsible for nearly 50% of workforce turnover. Anyone e...
Read More