Abstract: Success in any undertaking requires more than ability and resources; it also depends on motivation. Without it, the resources and service capacity of your firm cannot be fully realized. What then can a firm or company do to ensure that employee drive does wither away and die because of inadequate or inappropriate compensation and promotion practices? Most important, managers must understand that annual raises and promotion opportunities aren't always enough. Managing the changing needs of professional staff requires individualized attention, specialized incentive programs and compensation plans more closely tied to individual achievement and performance. This article examines what it takes to motivate a professional staff and lists both monetary and nonmonetary methods managers should consider when planning compensation for their employees. WHAT MOTIVATES PROFESSIONAL STAFF? Do expect a standard compensation plan or a firmwide incentive program to have. the same effect on every employee. To produce top performance, compensation plans and incentive programs must be tailored to meet the specific needs of each employee. Employees of different ages, experience and responsibility levels also have varying needs over time. That is, the impact of monetary incentives usually diminishes as employees get older and gain job experience, while nonmonetary incentives, such as challenging assignments, special projects and personal recognition, grow more important. Therefore, managers must only tailor incentives to specific needs but also consider reevaluating each incentive program to accommodate their employees' needs. KEEPING YOUR BEST The most common compensation scheme involves periodic pay raises tied to an employee's performance review. These reviews determine the employee's pay level and rank according to firmwide salary standards and fixed promotion criteria. However, the difference in pay raises given to average and top performers often is negligible. The result may be salary increases that disappoint the firm's most valued employees. Such methods of compensation can actually reduce employee performance and lower morale. For example, in Punished by Rewards (Boston: Houghton Mifflin, 1993), Alfie Kohn said that not receiving a reward one had expected to receive is ... indistinguishable from being punished. According to the book, whether an incentive, such as a good pay increase, is withheld or withdrawn deliberately, the effect is identical. And the more desirable the reward, the more demoralizing it is to miss out. Managers need to consider more creative ways to link paychecks to the firm's goals and objectives. An obvious first step is to review the firm's current salary standards and promotion criteria -- managers may find their efforts to streamline staff and cut costs have left them with a pay structure that fails to adequately reward their best employees. Expanding pay ranges within job categories. If a firm's payroll guidelines permit substantial raises only in conjunction with a promotion in rank, the firm should consider broadening pay bands for each position or job level so top performers can be suitably compensated without promoting them too rapidly or beyond their levels of ability. The goal is to reward outstanding performance without linking pay raises directly to employee advancement. This technique, known as broadbanding, is one of the fastest growing alternative pay strategies. For example, a firm with two levels of staff accountant -- junior accountant and senior accountant-usually provides specific job descriptions for each position and uses a salary range that fixes a maximum amount of compensation for each level. To receive compensation higher than the fixed amount, the junior accountant must be promoted to senior accountant. Under a broadband approach, the two job titles would be collapsed into a single position, staff accountant, with compensation tied to individual performance. …
Publication Year: 1997
Publication Date: 1997-09-01
Language: en
Type: article
Access and Citation
Cited By Count: 10
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot