I like to start my work week with a quick review of the business press. One line I read about the leadership development efforts at IBM struck me. An employee involved in their development program which includes lateral assignments for experience said this, “I don’t want to be groomed, I want to be paid.”
I am a big fan of giving top talent an opportunity to experience a wide range of organizational assignments. I have written before about my concern that currently too many financial people are running companies with little or no understanding of operations, sales, research and development, human resources, and other critical aspects of business. I honestly believe this has hurt decision making at the top. I praise IBM’s efforts to move their talent around to build a broader view. It is part of a formula for success.
However, we should hear the voice of this employee. The intrinsic rewards of work that offers interesting challenges, opportunities for achievement and recognition, and professional growth are still powerful motivators. They are not be enough. People must be paid equitably or they become dissatisfied and their results show it.
It has been over forty years since Frederick Herzberg published his findings on motivation. (‘One more time: How do you motivate employees?’, Harvard Business Review, Sep/Oct87, Vol. 65 Issue 5, p109-120). He pointed out the negative affect of “dissatisfiers” on employee performance. Compensation is an extrinsic reward, and one that increasingly matters, if people feel they are not being paid equitably compared to others. Companies have taken some extreme measures to cut labor costs to boost their profits. Let me be one of the first to say, enough is enough. Our companies’ leadership must be smart enough to recognize that changing one cell in an excel spreadsheet (labor costs) does not equal long term success.
Like the employee cited above, many talented people are bombarded daily with news of excessive executive compensation. Executives are being rewarded for improving the bottom line at the expense of their employee’s livelihood. In some cases, executives are being rewarded for a loss in performance! An exaggerated concern for shareholder wealth has employees openly questioning why they should continue to sacrifice for other’s gains. Wage and salary administrators need to provide predictive data to executives on what the real cost of wage reductions are instead of chasing the short term numbers. Ultimately, talent is going to move to organizations that reward their efforts the good old fashioned American way….more dollars. If companies don’t act soon, they may find themselves with a mediocre workforce paid a mediocre wage. I don’t think it is worth the gamble.