What Can We Learn About Rewards From a Company With No Rewards?

I came across a funny short video the other day of a nihilistic machine that turns itself off as soon as you switch it on.  One man's stubborn determination to defeat the machine reminded me that people want to feel in control, although it’s easy to forget this when it comes to employee motivation and rewards.  

Designing rewards to motivate employees is a complex and multi-faceted task.  Rewarding individual performance may motivate people to work harder or in a particular way but also tends to encourage competition rather than cooperation.  Some companies try to offset this risk by rewarding team performance, which can work well but can also lead to frustration unless all team members pull their weight.  Rewarding based on company performance makes good financial sense but unless clear and attainable goals are defined it’s difficult for employees to see the link between their own performance and business outcomes. 

I’m over-simplifying in order to make the point that paying for performance in a way that makes people work toward a common goal, share information and help each other be successful is harder than it sounds. 

Despite challenges, many companies with a strong pay for performance culture have achieved impressive business results.  Moreover, companies are becoming increasingly creative and open minded when it comes to rewards.  For example, see 2010 Salary Increase Plans Dip; Employers Look to Non-Salary Rewards by Ann Bares.  The primary motivation seems to be a reluctance to spend on base salaries rather than a grassroots movement toward a more holistic talent management strategy but let’s not split hairs. 

So, we’re definitely getting there but there’s still uncharted territory when it comes to rewards and motivation.  And interestingly, one company that seems to have the inside scoop on motivation isn’t a company at all but a non-profit organization that doesn’t even pay people: Wikipedia.

Wikipedia has managed to capture the collective imagination of subject matter experts all over the world without using monetary rewards of any kind.  They have achieved this by embracing a modern business philosophy that allows contributors to be self-selected and largely self-directed as long as they work on a common platform toward a common goal.   Their reward is the unfolding of that shared goal and the satisfaction that comes with creating something worthwhile. 

Wait a minute.  Self-selected?  Self-directed?  But… we can’t just let people do whatever they want or they’ll… do whatever they want! 

Which is why Wikipedia strikes a balance between creative freedom and clear rules of engagement.   Self-appointed content approvers ensure that these rules are followed and non-compliant content is removed.  And as a final check, Wikipedia users can report violations.  It’s the ultimate example of collaboration with the broadest possible reach and least possible bureaucracy, where ‘suppliers’ and ‘consumers’ collaborate from different locations.  Perfect?  No, but pretty darn good.

Since the primary goal of rewarding performance is to motivate people, it is remarkable that Wikipedia has managed to harness the creative energy of 85,000 active contributors all over the world without paying them.  They do this by tapping into the desire most people have to contribute, to share, to be acknowledged, to be part of something. 

I’m all for rewarding business success and I’m not suggesting that salaried employees would embrace self-direction in lieu of cash.  But it may be time to broaden our definition of rewards to include more chicken soup for the soul, such as acknowledgement of expertise, opportunities to teach others, increased autonomy and non-traditional career paths.

Or… we could just keep flipping that switch.

*Picture courtesy of The Most Useless Machine EVER! on YouTube.

Laura Schroeder is the Product Manager for Compensation Solutions at Workday, headquartered in Pleasanton, CA.  She has more than twelve years of experience designing, developing, implementing and evangelizing Human Capital Management (HCM) solutions in the US, Asia and Europe.   Her articles and interviews on HCM topics have been published in national and European trade journals.  She currently lives in Munich, Germany and enjoys reading, writing and spending time with friends and family.  

Comments

[Paul Weatherhead]

Outstanding post! I'm putting you in for a Pulitzer Prize!

[Derek Irvine, Globoforce]

Excellent post. You have simplified a very complex situation without oversimplifying. One way to achieve what you seem to be seeking is through strategic employee recognition. Such recognition is based on company values and strategic objectives (getting everyone involved in achieving the big picture but only within the context of desired behaviors), but also strongly encourages peer-to-peer recognition. This helps eliminate some of the competitive aspects that can happen in manager-to-employee only approaches (the "teacher's pet" phenomenon) by letting anyone recognized their colleagues. This spreading of goodwill throughout the organization also rewards based on personal and company performance. Best of all worlds...

[Laura Schroeder]

Paul, thank you for your feedback as well as for bringing this discussion to the WorldAtWork online community.

Derek - I agree and enjoyed your recent post on peer to peer recognition programs.