Why Cash Isn’t Always The Best Motivator
Robert Glazer, Acceleration Partners
December 05, 2016
Cash is the ultimate carrot, right?
Not necessarily. Especially for Evergreen entrepreneurs. We are building businesses based on passion, principal and Purpose. We want our employees to be part of our mission, and although people might believe money is important, it’s not the ultimate motivator.
We have given a lot of thought to bonuses at Acceleration Partners, my 9-year-old marketing firm, and are moving to a system that focuses more on experiences and meeting employee needs in a more personalized way.
For truly special bonuses, we’ve started something exciting at AP. We’re rolling out our own version of a “Dream Program,” where we subtly collect ideas—dreams, wants or preferences—from employees in interviews or casual conversations. Then, when the moment is right for a bonus, we turn to that catalogue for inspiration.
Just recently, we sent someone on a trip to Napa—plane tickets and a paid-for hotel—because she had always wanted to visit wine country. Another colleague wanted to take his kids to London, so we are flying them out before a conference this fall when they will have extra time to sightsee.
Buying tickets for a travel experience or giving an employee an opportunity they never would have had otherwise is not that expensive—often less than what a bonus check is expected to be. But a free vacation is a wallop of a gift. Employees are touched that we noticed their interests and that we helped create a long-lasting memory connected to the business. It creates loyalty.
On a smaller scale, about a year ago, we launched a program called TINYpulse to get a better read on our employees. TINYpulse is an employee engagement software platform that offers surveys, peer recognition and performance reviews. We use TINYpulse every week to ask people questions and to send cheers. I send personal thank you notes to employees when I notice they’ve been doing a great job. This kind of weekly recognition is supremely motivating to employees, and many have told them my comments made their day. People can handle stress and hard work if they feel supported. If they are just getting cash bonuses as a reward and no emotional support, the job starts to become transactional.
Cash, whether in the form of a bonus or salary, is not actually a great stimulus for great work, with the exception of a few functions such as sales. Several years ago, I read an exciting book: Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink. It explores intrinsic motivators vs. extrinsic and why people do things. If people are motivated entirely by money, there is always someone out there who is willing to pay them more.
Evergreen companies need high-quality people who are invested in their work, and they need to avoid turnover. At Acceleration Partners, we focus on paying people in the 80th+ percentile while also working hard to recognize them as individuals. This provides an environment that makes them want to get up and go to work. And when someone comes to them with a better offer, it makes them think twice about what they value and would be giving up.
And we now surprise them with our new bonus program. We don’t want anyone changing jobs just so they can make $5,000 more somewhere else.
As a result, our turnover rate for top performers is very low. They are deeply invested in our company, and I don’t believe anyone has ever left with money as the primary motivator.
Rather than hand my employees a bonus check, I’d much rather hand them tickets to Hawaii and an experience they will never forget that is more personal.
Robert Glazer is the Founder & CEO of Acceleration Partners.