How to Best Reward High Performers

reward high performers

Talent Management – 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 Willis 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 rewards 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

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

  1. 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.
  2. 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.
  3. 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 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 high 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:

  1. Providing positive feedback for desired behaviors
  2. Delivering meaningful, customized and proportional rewards for higher performance
  3. Distributing the greatest share of the rewards to the highest performers
  4. Ensuring the rewards are timely, fair, proportionate and consistent
  5. Basing them upon clear, accurate and achievable definitions of success and failure
  6. 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
  • Comfort with the status quo

To add more meaning into your culture, make sure that any intrinsic motivators are:

  • Meaningful
  • Emotionally significant
  • Modeled by leadership
  • 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.

We have worked with LSA Global for our learning and development needs and have always had great success. They helped us recently with customized Management Workshops that we held for the second time. It was fantastic, and I would highly recommend LSA to anyone that is attempting to get immediate and impactful improvements.

Mary Johnston
HR Manager, BU Radiology Informatics

LSA helped change our entire culture around meetings, making them more effective and efficient, thus enabling us to concentrate on driving more business.

Terry Wassman
VP of Human Resources

LSA helped to meet the needs of my teams within a very narrow timeframe. My team walked away with highly useful management tools and practices. LSA saved us time in delivering the right solution for our specific needs.

Sandeep Kumar
Director, Software Engineering, EPG

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

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

Congratulations on your pro-activity in establishing this program and developing such an effective New Employee Orientation course.

Farhat Ali
President and Chief Executive Office

Fujitsu

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

We consider LSA Global our outsourced learning and development partner. We worked closely with LSA to customize a management development program to meet our growing business needs. I would highly recommend LSA to any company wanting to deliver quality learning solutions.

Terri Wright-Scheer
Vice President Human Resources

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

LSA Global’s consultant brought a fresh perspective to our behavioral based interviewing strategy for two key executive positions we needed to fill, and their consultant helped us develop questions that produced a much deeper understanding of candidates’ capabilities. I am confident that the two new executives joining our organization have the right skills to add significant value. Throughout the process LSA was also very responsive in dealing with short lead time requests.

Because of the unique nature of our business, Excel is a core application in our accounting organization. After three attempts to find an Excel consultant who is capable of helping our finance team integrate advanced applications into our work processes we found LSA and Alex. He was not only a “Real” Excel expert but was masterful in helping us identify where to use Excel applications in our processes to increase our group’s efficiency.

SPO Partners & Co
Kim Silva, CFO

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

We recently partnered with LSA Global to offer our Supervisors and Managers a customized two-day management training program. Everyone who attended said it was by far the best management training program they had ever attended. The content was rich and highly interactive. The case studies were relevant. Each participant walked away from the training much better equipped to lead their teams.

Jeff Coon
Director of Human Resources

The LSA Global team was very receptive and flexible to our needs every step of the way. Their staff and facilitator demonstrated attention to detail, responsiveness, and professional courtesy. The participants were thrilled with the outcome and rated the communication skills workshop and the facilitator as ‘Excellent’. I’d highly recommend working with the LSA Global team to meet your professional development needs.

John Mastrorilli
FRDP Leader

Intuit

LSA custom designed a Management Development program that is absolutely “on target” for our technical managers. Their facilitator has done a superb job delivering the material in a way that is fast paced, highly interactive, and fun. She presents practical solutions to the people situations that our managers face every day. I regard LSA as an excellent partner that understands our business needs and a virtual member of our HR department.

Judith Onton
Vice President Human Resources

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