They Don't Care Too Much for Money

Once again, it behoves CIOs to reward their star performers. But how will they do it? Cutting bonus cheques would be the wrong answer.

The past couple of years have been tough on the morale of IT workers. For those few companies that haven't carried out retrenchments, enforced early retirements or engaged in any other type of downsizing the salaries, promotions and perks they offer today are mere shadows of their former selves. And the outsourcing of work to the Third World is yet another fardel for IT employees to bear.

Six months ago there finally seemed to be a dim light glowing at the end of the recessionary tunnel. If it's not an illusion (or the headlamp of an economic train bringing bad news), the task now for CIOs will be how to recapture the hearts and minds of their employees, who may view an economic revival as a good time to dust off their resumes. First and foremost, getting employees recommitted to working for your company (and working for you) is a matter of motivation. Is it possible that as times get better, purse strings will loosen, and CIOs will once again be able to dip into corporate coffers to distribute bonuses to star performers? After all, isn't money - cold, hard cash - the best motivator for stressed out, disengaged employees?

Maybe not.

Why Money Can't Buy You Love

It turns out that money in and of itself may be an inferior motivational tool. That won't surprise anyone familiar with Abraham Maslow's famous hierarchy of needs - which posits that once people possess the basics (food, shelter and safety), what they look for is self-esteem. Maslow defines two kinds of self-esteem. One results from competence in a skill or task; the other comes from the recognition such competence engenders.

Maslow's theory permeates an article by Anna Fels in the April 2004 issue of the Harvard Business Review. Personal ambition, writes Fels, is directly correlated to the recognition people receive for their accomplishments. While Fels's piece specifically addresses reasons why women seem to abandon their workplace ambitions, her underlying message - that people are motivated to succeed and push themselves because of the recognition they receive from their organizations - is applicable for employees of both genders.

While money certainly conveys recognition for a job well done, it's the kind of carrot that may not have legs. "Bonuses will motivate for about eight hours," says Curt Coffman, global practice leader at The Gallup Organization. For one thing, in an economy such as the US's, bonuses can't be counted on, dependent as they are on cash flow. When tough times dictate a suspension of bonuses, employees who work as hard as ever (perhaps even harder) may no longer feel recognized if that recognition comes solely in the form of an extra paycheque. Take away that cheque and what have you got? An office lousy with cynicism. In that sort of environment, it's little wonder that thoughts of greener pastures become top of mind.

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The Perks That Money Just Can't Buy

Another downside to bonuses is that employees typically receive them for what they've already done, raising the question of how well they motivate people to rise to the next challenge. Better are the kinds of recognitions that spur ambition - things like landing a plum assignment on a high-profile project or being given a chance to attend a training course to develop a new, marketable skill. The latter two perks have another advantage over monetary rewards: They don't foster jealousy. Everyone likes money, but it's only the most ambitious who covet the additional time and energy a new assignment or a class requires.

According to Dean Schroeder, director of the MBA program at Valparaiso University, extra dollars given to acknowledged standouts are likely to create an atmosphere rife with backstabbing, resentment and other nasty organizational dysfunctions. The reason? Those employees who don't get the cash often feel that they contributed to the success of their rewarded colleague. Human nature being what it is, the passed-over employees - those denied recognition for their accomplishments - may at best lose enthusiasm for the job or at worst actively undermine the work of their more fortunate peers. "While bonuses for individuals do create some positive results for an organization - which they get credit for - they don't get blamed for some of the dysfunction that results from them," Schroeder says. Coffman concurs, adding that bonuses often create a culture of entitlement that once established is hard to crack.

And let's face it; bonuses alone are somewhat impersonal and don't require much thought on the part of managers who bestow them. "Money is easy and doesn't require a lot of creativity," says Schroeder. When facing overworked, disgruntled employees, CIOs tend to do what most managers do: They "throw money at a problem instead of creativity", Schroeder says.

What's Good for the CIO Is Good for the Employee

IT for the foreseeable future will probably remain under a budget crunch. So CIOs need to become more creative in terms of finding ways to motivate their employees. That shouldn't be hard to do, according to Schroeder, who suggests that CIOs borrow a page from their own experiences. For years, CIOs have bemoaned their status as interlopers at the executive table (if they got a seat at all). They believe (as we do) that they contribute mightily to the strategic success of a company, yet the recognition they receive all too often centres on their ability to keep the computers up and running. What CIOs want - for their peers and superiors to listen to them and recognize them for their contributions to the business - are the same things their employees want. In that vein, Schroeder advises CIOs: "Ask your employees for ideas, and listen to their suggestions, because they are the ones who work with the systems and the customers every day." Getting feedback from your staff serves two purposes: it shows them that you care about them and the job they do, and it also lightens your load in terms of managing them. "Ideas from the employees destresses the manager's job," says Schroeder.

In essence, says Coffman, CIOs shouldn't fixate on money. How best then to motivate? CIOs need to establish relationships with the people who work for them, particularly the most talented who have the most options job-wise. "Pay is important for everyone," says Coffman, "but it's not the best motivational tool for the best employees." What top performers crave is attention from their managers, opportunities to reach their potential and - despite the perception that everyone is already overworked - more and higher profile assignments.

In the end, throwing money at your employees won't work; it will simply encourage them to jump ship for the next organization that comes along with more green to throw their way. To keep employees motivated and on board, CIOs need to forge a personal connection between themselves and their staffs. Granted, that's not as easy as cutting a cheque, but it's what makes the difference between an adequate manager and a great one.

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Copyright © 2004 IDG Communications, Inc.

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