Reaping What You Sow...

Why are we paying bonuses? 

 

I attended a recent PSVillage meeting here in  Chicago a couple weeks ago.  Since then, I have been thinking continuously about one of our discussion topics that day: motivating today's services workforce.  While much of our conversation centered on the difficulties in motivating today's Generation-Y worker, we did get into a spirited discussion involving bonus compensation for service workers. 

 

Several executives indicated that they feel pressured to pay bonuses to today's service workers because that is the norm in compensation.  Unfortunately, the use of these bonuses often triggers some very undesirable outcomes. 

 

This issue is not a single dimension problem.  Today's workers are quite different than service workers of a generation or two ago.  Several executives at this meeting lamented that key skills they require within service workers are no longer present within their workforce.  Many service organizations worldwide have relied on Big 8 tax/audit/consulting firms to teach people how to act as consultants. Those farm clubs are no longer functioning to the training levels of the past.  More specifically, those organizations have shifted much of their business offshore or have moved their offerings to services like outsourcing which made may not require the same level of training as line consultants received previously. 

 

Years ago, these Big 8 farm club firms spent a decade or more grooming and apprenticing top business school graduates in skills like: consultative selling, appropriate etiquette for dealing with CXOs, business writing, presentation skills, interviewing skills, etc.  Now, many service employees come straight into the workforce from technical schools and/or with technical degrees from universities without ever having an opportunity to hone or develop those critical soft skills. 

 

If that weren't bad enough, this new generation of service worker has not had a enough experience working successfully in teams.  Again, farm club systems made workers sublimate many of their individual needs, wants and quirks to be more effective as a member of the team.  Military organizations around the world have dealt with this phenomenon for centuries.  They take raw recruits and mentally strip them to the bare and rebuild them back as integrated members of fighting units.  No one is doing that with today's mercenary, independent service worker. 

 

Service firms today now employ a number of solitary, What's-In-It-For-Me (WIIFM), independent freelancers who happened to get a paycheck from their firm.  I heard a number of examples of individual behavior tromping client and employer best interests while at the PSVillage meeting.  For example, when workers have been assigned to two different projects and one is fixed cost, workers will book all of their time (and as much time as they can)to the fixed cost project initially even though they may have done no work on the project.  How service workers game time reporting systems is not new; however, the rationale for doing so today has more to do with personal self-interest rather than finding ways to do right by the client and the employer. 

 

So with problems like these whose fault is it?  Believe it or not, I will not necessarily single out workers as the main culprit here. No, I believe it is short-term selfish behavior of employers that has a lot to do with the workforce troubles they experience today.  When employers pay bonuses based on exceeding chargeability goals, they in fact reward employees for violating work-life balance requirements, for sticking it to clients, etc. In David Maister's book,  Strategy and the Fat Smoker, there is an interesting little paragraph on page 111.  It says:

"Doesn't this sound exactly like a group of professionals?  Say "Do it and I’ll pay you" and they will immediately translate it into "I'm not going to do anything you don't pay me for!""

 

That sentiment was at the core of the executive frustration at this meeting.  Workers weren't interested in doing anything else to help their employers for their clients unless there was a specific cause-and-effect relationship between their future actions and their immediate pay.  Bonus payments often reward the wrong behavior. 

 

Service organizations need to rethink the following:

• What are the behaviors we want all of our service professionals to display?
• What are the values we want within our workers and are our recruiting practices focusing on these?
• Should we alter our overly technical training so that we can develop more well-rounded service workers?
• How do we get our compensation systems and methods to align with the values our company desires?
• How do we extricate the worst of the selfish workers out of our workforce and bring in more business oriented, team playing, consultative, and long-term oriented workers?
• Should our managers be spending more time developing our talent?
• Do we have enough role models for our staff?  Are they visible?  Do we reward these individuals more than we do the more self-centered workers?

I have run several services organizations in my career.  Lone wolf, mercenary workers are a quixotic lot for managers.  Yes, in the short term they can deliver in a big way.  But, because they know this, they often adopt a take it or leave it personal style that makes them less than desirable long-term players for co-workers or clients to have on their teams.  In short, they become a costly maintenance issue.  I've seen these workers throw tantrums when they do not get the staffing assignments they covet.  Forget about fairness or equality, they want all of the plum assignments and don't care what happens to their colleagues within your firm.  Make no mistake - they do not have your firm's best interest at heart.  These workers think of themselves first and foremost.  Your firm is but a means to an end for them. Their loyalty is to their paycheck and their bank account not to your firm or to your clients. Their loyalty, to be more succinct, is up for sale to the highest bidder.   The sooner you recognize this and deal with it, the easier your service management challenges will be. 

 

 

Paying bonuses that reward selfish or other incorrect behavior is wasteful but is also wrong. 

 

   

There are probably several books that could be written on the challenges of today's service environment and its workforce.  But, for a blog posting, this will suffice for now.

Comments

[Bruce Lewin]

I guess its a case in part of fit, cultural alignment, building relationships and having a better grip on some of the more intangible aspects you mention in the post.

The quicker these and your questions above can be satisfactorily answered, the easier it will be to reach a resolution.