COMMUNICATION _ Do your participants feel this way ab out your programs?
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DW - I found this on a blog site. It is amazing how a good thing can be communicated so poorly. How do you ensure that this does not happen at your company (or with your clients)?
A welcome call
I
received a very surprising phone call this morning, from the Vice
President of the Aerospace Integrated Supply Chain. Ordinarily, this
is the sort of thing that causes panic in one's heart but he was quick
to inform me that this was "a good thing". I had no idea just how good.
He
was calling to inform me that I was now the owner of 900 shares of
restricted company stock. It's current value is almost half my annual
salary, for crying out loud.
Apparently, my company selects 400
people (out of the 100,000+ corporation-wide) for not-talked-about
recognition/retention awards each year. I have no idea what goes in to
the selection process, but I was told that the corporate board of
directors actually reviews and approves the awards. Apparently, again
as I know only what I was told today, I was somehow designated as a)
exemplifying our corporate behavior principles and b) one they want to
actively encourage to stay. So the "restricted" aspect of this stock
is that while it is mine today, it vests in 3 years - meaning if I
leave the company before that time I lose it. And obviously between
now and then I would be working as hard as always to make our stock
price go up, so when you think about it it is a double incentive; both
to stay there and to continue to deliver profitability.
I am
pretty shocked, frankly. I really wish I understood the system so I
would know who to thank for putting me in. But apparently we're not to
discuss these things (and I can see why). It certainly brightened up
my morning, I tell ya. Glad I picked up the phone.
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Although, interestingly, awards like this represent the most effective way to retain and motivate (as is apparent from the reaction of the blogger).
I have seen that approach taken in some companies - I may even have worked for his company once --
I think in today's equity environment though, when companies are using stock it is probably from a transition from options to RSU's, so there is broader awareness and communication. That means the problem is a different one though, taking a broad-based program (read: Entitlement) and having fewer employees eligible with more of the retention and reward focus.
Sadly this seems to be a common way of rewarding - From a communications perspective.
Imagine how much productivity we would get if others knew this was a carrot to reach for.
Interesting.
Maybe it's because we in the UK are behind the US in matters of communication, but it seems to me that this kind of award hits the spot:
1. The recipient of the award seems enthused, being recognized for his/her contribution and for receiving something valuable that was unexpected, for living the values of the business without changing behaviour solely with a view to being compensated.
2. The recipient recognizes that it is now in his/her best interests to remain with the business and to act positively (including persuading his/her colleagues to act positively) towards improving corporate performance/share price.
3. The only negative seems to be that, being a decent person, the individual wants to know who to thank. The fact that it is secret, and hence will not distort future behaviour of the recipient and/or his/her colleagues seems to be a small price to pay.
The alternative would be:
1. A distortion of behaviour in front of those that judge.
2. 100,000+ employees being upset at not receiving the call.
3. The creation of an expectation.
4. The potential for a dilution of the value of the award (through increasing the number of participants).
All the studies that I have seen seem to prove empirically that the best form of incentive is the one that is unexpected. Those that have an expectation of an incentive and receive it outperform those that have an expectation and don't, but the effect lasts for around 12 days. Of course, the debate could have moved on.
I don't think that there is any suggestion that this is the only form of incentive that the blogger's employer provides. For a purely discretionary award to a small number of key and performing individuals, it seems well placed.
This is great discussion, I hope we hear from others.
I think Nigel makes an interesting point.
With such a small number of recipients out of such a large population it may seem like a lottery to most of the employees. I for one, would have loved to receive such an award (please feel free to send my notification to my email address)
I think there is also something to the point that there seems to be greater emphasis on public displays of recognition in the US, versus other parts of the world. Perhaps our fascination with award ceremonies and acceptance speeches can color our view of how certain awards should be paid out and communicated.
I think there is also merit on the other side of the argument. When a recipient does not understand the award, they do not truly value the award. I think that a good addition may have been to provide some useful information on how the programs works, how an individual is selected etc...
Lastly, while the individual may believe he knows why he received the award, it is a good idea to explicitly emphasize specific behaviors. In the end it might be nice for the company to use the individual (perhaps as an anonymous example) to promote what the company views as an archetypal employee. It may help others modify their work to fit the design.