How to Best Reward High Performers Today

high performer on a winning platform holding a rewardreward high performers

How to Best Reward High Performers
There is some controversy in the talent management arena about how to best reward high performers.  Most everyone wants to create and reward high performance, but their is not much agreement  about the role that extrinsic motivators like money can play in creating a high performance culture.

Recent Rewards and Recognition Research
While the majority of our clients use pay-for-performance as a component of their total rewards and recognition philosophy to create a high performance culture and reward high performers, a recent survey by Towers Watson found that:

  • Only 20% of employers believe merit pay is effective at driving higher levels of performance
  • 26% of employers still pay bonuses to employees who fail to meet expectations
  • Companies are beginning to put more weight on the strategic importance of people’s roles, their contribution to team goals, and their ability to help the company succeed in the future, not just the present

The Role of Intrinsic and Extrinsic Motivators
To complicate matters, authors like Dan Pink have pushed the idea that intrinsic motivators like autonomy, mastery, and purpose drive real and lasting motivation, not extrinsic rewards like money.  In a similar vein, psychologists tell us that extrinsic motivators to reward high performers only temporarily change what people do.  They assert that rewards like bonuses, vacations, and other awards do not change the underlying attitudes and beliefs required for lasting and committed behavior change.

Some even postulate that financial rewards can ultimately have a negative impact on intrinsic goals like personal growth and engagement.

What Role Should Rewards Play in Your Talent Management Strategy?
So when you want to help your people perform at their peak and move the business strategy forward in a way that makes sense, what role should rewards play in your talent management strategy?  How should you reward high performers?

How to Best Reward High Performers
Here’s our two cents.

  1. Base Salary
    Let’s start with base salary.  We consider base salary a “ticket to play the game.”  From our perspective, base pay is a talent management hygiene factor that needs to be at a certain level to be a positive factor in ensuring a healthy organizational culture.

    Similar to basic levels of employee engagement, leadership, trust, safety, ethics, character, and respect, base salaries need to be good enough that they don’t demotivate or undermine performance.  But it doesn’t necessarily follow that significantly increasing a person’s base salary results in higher levels of performance.

    The largest research study we could find on pay and motivation found people’s satisfaction with their salary is mostly independent of their actual salary.  But as most of us know about ourselves, money can be a powerful draw to attract and retain employees.

    Gallup finds that 44% of employees say they would consider taking a job with a different company for a raise of 20% or less.  As you may imagine, the higher the level of employee engagement, the less likely an employee is to leave for more money.  And, the higher the level of employee dis-engagement the more likely an employee is to leave.

    In fact, dis-engaged employees are almost twice as likely to leave for higher pay.  So it is not ALL about the money.

    Our Advice on Base Salary

    Make sure that you have a compensation plan that puts your base pay in a range that allows you to attract and retain the quality talent you need to execute your strategy in your unique marketplace.  If you find you need to “overpay” to lure and keep talent, you are probably compensating for a larger strategic or cultural issue that should ideally be resolved with non-monetary talent management strategies.

    Remember, you can buy people’s time, but not their discretionary effort, loyalty, and advocacy.  If you want employees to be truly engaged, find the sweet spot of base pay that does not serve as the sole motivation for people to join or stay.

  2. Pay for Performance
    Assuming that your base pay is at an acceptable and healthy level to attract and retain the talent you need, the next question becomes how to best use performance-based rewards to motivate higher performance.

    We believe that it is a leader’s job, and the purpose of an effective talent management strategy, to create the circumstances to get the most out of their people.  And we know that rewards and recognition play a major role in shaping a work environment.  Like most talent management challenges, tying rewards to performance or performance reviews has both pros and cons.

    Most of the pros relate to being able to better attract and reward those who deserve it while most cons relate to subjectivity, politics, and muddying the waters with respect to career and performance development.

    Our Advice on Pay for Performance
    For people to strive to perform at their peak there should be, in addition to the intrinsic motivators tied to your corporate culture, a commensurate level of rewards and recognition tied to their higher performance in a way that aligns with the overall company strategy.

    To get it right, make sure that your rewards and recognition create desire and motivation to perform by providing positive feedback for desired behaviors, delivering meaningful and proportional rewards for higher performance, distributing the greatest share of the rewards to the highest performers, ensuring the rewards are timely, fair, proportionate, and consistent, and having the rewards based upon a clear performance cause and effect.

  3. Intrinsic Motivation
    Once your extrinsic motivators of base pay and pay for performance are in place, you should make sure that you have created strong enough intrinsic reasons for people to stay and to perform.  If your organizational culture is devoid of meaning, you will most likely see signs of complacency, minimal innovation, a lack of stretch goals, and comfort with the status quo.

    To add more intrinsic motivation into your culture, make sure that any intrinsic motivators are meaningful, emotionally significant, modeled by leadership, and aligned with the business strategy.  Above all else, make sure your high performers can answer the question, “Why is it worth it to be here and do what it takes to perform at a high level?”

The Bottom Line
Rewarding the behaviors that are in sync with your corporate culture and business strategy can make a huge difference. Setting the right talent management strategy to attract, develop, engage and retain top talent accounts for 29% of the difference between high and low performing organizations.

Is the way you reward high performers helping to create higher levels of performance and engagement?

To learn more about creating a high performance culture, download The Steps to Create a High Performance Culture that Thrives

Comments are closed.

Understanding and conforming to legal compliance was very important to our company. We turned to LSA Global to provide a quality and cost effective way to ensure that we were AB 1825 compliant. Their interactive eLearning program was top-notch. It allowed our managers to learn at their own pace, and on their own time. The program was tailored to include our logo and our internal harassment policies. It was interactive and met all federal and state legal requirements. I would highly recommend LSA Global to any company looking for an efficient and effective and top quality way to train their managers to be in compliance.

Kelly Warren, SPHR
Director, HR & Compliance

I have worked with LSA Global at previous companies and welcomed the opportunity to bring them in to support my new organization. We worked closely with LSA to design a solution for our Client Partner Teams and Management Training on both coasts. LSA designed a customized solution for our business and organizational culture. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner that makes an impact.

Laurie Torres
Chief People Officer

I’ve been associated with LSA for the last 8 years and have found them to be an extremely professional, well managed full service training organization. Since working with LSA, I’ve participated in a number of solutions ranging from Performance Management to Assertiveness Training – I’ve found that the quality of the resources is superior. They are well prepared and have definitely done a considerable amount of pre-work in order to customize our culture and business into the total learning experience – making it most beneficial for our employees.

Duane Schroeder
Human Resource Manager

In the Next Generation Management Development courses, I was trained with skills and tools that have made me and my team more productive, motivated, and successful at communicating with other departments.

 

Kevin Ashman
Firmware Engineering Supervisor

LSA provided top notch solutions right when and how we needed them. They exceeded my expectations from a speed, quality, and cost standpoint. I recommend them to anyone looking for a true business partner in the Learning and Development arena. The breadth and depth of their expertise has helped us hit tight deadlines across multiple projects.

Fortune 500 Financial Services Company
Director of Infrastructure & Technology

SeaTel has found our partnership with LSA Global to be very valuable and beneficial. We turned to LSA to customize a supervisory/leadership solution to meet our needs. LSA delivered a customized top quality solution. I’d recommend LSA Global to any company looking for a best-in-class training and consulting partner.

Kortney Riddle
HR Manager

PalmSource has found our relationship with LSA extremely beneficial. We worked closely with LSA to customize the right Management Training Program solution to meet our unique business needs. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner.

Ken Boehm
Vice President of Human Resources

We consider LSA our true business partner in the areas of Learning and Organizational Development. From Strategic Planning to Presentation Skills and Management Training, they continue to provide excellent value and extremely high quality solutions – not just one time events. I recommend them to anyone looking to drive true business results.

Michelle A. Mitchell
Vice President, Worldwide Human Resources

VNUS Medical has been very pleased with the effective management development programs that LSA Global has delivered for us over the last four years. The programs have been universally facilitated by experienced and best in class instructors. The knowledge gained by our management team has been put into practice very quickly. VNUS is very happy to be working in partnership with LSA because they consistently deliver excellent programs that receive exceptional feedback from our management team.

Cindee Van Vleck
Director Human Resources

I continue to be impressed by the level of leadership development and management expertise and quality of advice and facilitation that LSA has to offer. What a smart and client-centric group of great people who really know how to help leaders attract, engage, develop and retain top talent.

Tracy Esposito
Director, HR Business Partner

In my years working with LSA, it seems like I’ve had a personal consultant at my fingertips to help me identify just the right solution to satisfy our needs. The entire LSA team has become a trusted friend of Actel — assuring we provide state-of-the-art learning to meet our complex, high-tech business and people needs.

Linda Mitchell
Training Manager

We recently contacted LSA Global to assist us with a unique training request. We gave LSA a very short deadline and LSA custom designed a training program to meet our exact requirements within the limited time allotted to them. We found their facilitator to be well versed in the subject matter and very credible; the design provided practical and valuable information to our team of managers. I highly recommend LSA Global, particularly in the area of management training.

Julaine K. Souza
Senior Vice President

Here’s a token of my appreciation for ALL your efforts. I’m offering my most sincere appreciation, and it extends to all the folks who made our customized management development programs possible.

Susan Anderson
Workforce Planning Bureau

LSA has become the gold standard in team building and management training at Genomic Health! I have a hard time finding facilitators that come close to their level of customization, expertise and experience.

Emily Couey
Director of Human Resources

LSA’s customized Effective Presentation Skills program has helped me elevate my presentation skills to the next level. I now have a much greater self-awareness of my presentation skills and can leverage off of my strengths while working to improve upon other areas. I would definitely recommend this solution to anyone for whom business presentations are an integral part of their job.

Jim Elliott
Senior Marketing Manager

Samsung

Evaluate your Performance

Toolkits

Toolkits

Download key published insights and tools from industry experts highlighting best practices in the areas of talent, strategy and culture.

More

Health Checks

Health Checks

Want to know how you stack up against leading organizations?  Receive a complimentary benchmarking analysis courtesy of an LSA Expert.

More

Whitepapers

Whitepapers

Get up to speed on timely solutions critical to your business. Published by LSA Experts based upon client feedback and key industry trends.

More

Methodology

Methodologies

First we identify the key metrics you want to improve. Then we assemble a dedicated team of elite experts who have successfully solved similar problems with similar clients.

More

Blogs

Stay up to do date with the latest information on how we help high growth companies align their culture and talent with strategy.

More

Case Studies

Client Case Studies

Real world consulting and training approaches from LSA projects, providing insights on how your company can outperform the competition.

More