“Start with good people, lay out the rules, communicate with your employees, motivate them and reward them. If you do all those things effectively, you can't miss.” - Lee ia coca
Borrowed above quotation Lee Iacoca describes the variables for success of business basically in terms of human resources. On the other hand these can be viewed as general perceived norms that most HR managers tend to practice more often. However the significance of rewarding as a mechanism to motivate employees is highlighted and accepted around the world. The back ground to this essay is an offshore software research and development organization which employ skilled set of well qualified young graduates, experienced and seasoned managers, enough modern layouts and rules supported by sophisticated technologies and backed by a world famous industrial giant, effective communication through flat organization structures and offers best reward packages of incentives in monitory terms. Even though they provide everything so far the business fails to retain their top engineers.
AS explained in stage one, a new rewarding scheme for developers of this particular organization was introduced suddenly as part of the alliance agreement with the foreign party. It was decided to reward employees with merit increments to their salary after a yearly evaluation against achievements derived on a balance score card based forced rank method. Parallel to that structural regulation was also brought to duplicate the structure of foreign counterpart in order to centralize the control of administration. The immediate diffusion of top talents following new rewarding scheme evident the failure of that incomplete approach and paved the way for this research. This investigation explores the theory behind how these software companies can reward developers in order to motivate and retain them to become top-producing organizations that will invent the best ideas and products for future.
There is a popular belief that, what gets rewarded gets done. You get more of the behavior you reward. (Michael le Boeuf) Even though this is true to some extent, the concept of rewarding is much more complex, and can easily be shown with numerous failed attempts like discussed in the background scheme. According to Green (1995), motivation refers to the initiation, direction, intensity and persistence of human behavior. A reward is that which follows an occurrence of a specific behavior with the intention of acknowledging the behavior in a positive way. These definitions help this essay to indentify mutually exclusive nature of rewards towards motivation.
Steve Jobs, the reputed CEO of Apple computers, define reward types while highlighting the significance of a reward system to his business (Kotelnikov, 2008). According to him reward types are more than just bonus plans and stock options. While they often include both of these incentives, they can also include awards and other recognition, promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you. There he brings a broader variety to the reward types and a deeper sense to concept of rewarding.
According to McClelland’s (1987) theory for motivation, the need for achievement, the need for affiliation, and the need for power are three factors for motivation. The assumption of McClelland’s theory of needs is that people with different needs are motivated differently. The implication here is finding what motivates certain individual groups and assigning them with different rewards. Those with high needs for achievement should be given challenging projects with reachable goals. They should be provided with frequent feedback. Those who seek a need for affiliation should be placed in groups that can work as a team. Those who have a need for power should be given an opportunity to manage others (Long, 2009). Hypothetically that seems to be a good method, but practical application of such approach is questionable due to difficulty to realize individual expectations in to exact organization objectives.
Herzberg (1959) introduces two-factor theory of motivation. The two are called the hygiene - motivators, or the extrinsic-intrinsic factors. Considered implications of Herzberg’s theory, there can be two kinds of rewards, termed extrinsic and intrinsic. Extrinsic rewards are external to the individual (Work conditions, salary, job security etc). That can be monitory and non monitory. Intrinsic rewards are internal to the individual which cannot be measured in monitory terms (recognition, sense of achievement, personal growth, responsibility, nature of work etc). Author got a chance to interview the crowd who left the organization immediately. According to them majority were not happy about the tasks they were assigned as part of their new roles. Apparently most of the developers quit the job for a lesser salary. That reaffirms the significance of non monitory intrinsic rewards to developers.
Discussed above views on rewarding essay argues that external benefits are not always the most motivating reward. There it needs to consider the other different expectations of employees. Effective reward may be knowing what employees will find rewarding. Monitory rewards only will not help motivate employees all the time. When an employee’s performance, morale or motivation has not been influenced by a reward, it is likely because it can be the wrong reward for that employee.
Importance of intrinsic rewards
Lucia (2009) finds people naturally want to feel valued and appreciated, not only when contributions are significant, but anytime of the year. She suggests verbal praise and recognition is easy and delivers a big impact. There for it can be done more often at a less expense but can have a greater positive impact contrast rewarding annual performance evaluations. Recognition and appreciations may act as intrinsic rewards, which in other terms can be effectively used to craft effective rewarding mechanisms. Going further at an offshore development environment recognition programs can surface internationally accepted careers.
Given the importance of recognition as an effective intrinsic reward, essay highlights the importance of inculcating a culture of recognition and appreciation.
What can be the best reward for developers?
Taking background organization into example, majority developer demography falls between 23 – 35 age range and they are all graduates with proven academic records. Specifically most the time fresh graduates join R&D because they expect good industrial exposure. This you crowd may like challenges. At the same time it is the industry induced passion for developers which is also influenced by university culture.
Joshua Cook (2009) defines the key to success at Google, Inc, beyond the incredible perks and the compensation is their work process which offers intrinsic rewards: no real hierarchy, tiny work groups and purpose, did not create monolithic groups or hierarchy, no official channels, and employees were kept very independent. The basic concept inspired by this is to maintain an entrepreneurial culture. Author Trucker (2002) finds organization can design programs and rewards specifically to spark and encourage employees towards innovation that add value to organization.
There for considered the psychological need for achievement as the key expectation of developers this essay argues entrepreneur culture can be an alternative best reward for employees of effective R&D environment. To establish this culture key intrinsic rewards have to be correctly understood.
It's natural to achieve a good response from workers when they know there are positive rewards. In order to reward, achievers should be recognized. There can be many methods to recognize achievers.
An achiever can be defined contingently. Also achiever can be defined based on annual performance. It will be hard to predefine contingent achievements due to variable situational significance and difficulties in measuring the outcomes. However author admits that recognizing and rewarding these behaviors are highly desirable. There rewarding should be done immediately so that the reinforcement effect will be high, otherwise people won’t see and remember the importance of it.
But for the sake of rest of essay, taking compliance to back ground scheme into consideration, it will look at performance based evaluation systems to identify high achievers.
Importance of a comprehensive evaluation system
For example performance of sales engineer can be measured in terms of sales volume. But in case of software developer, depend on the requirement he may do many things – including customer meetings, junior trainings, write codes, test codes, designing software components, prepare graphics, and many more. The complexity of tasks can also be different from individual to individual. This diverse nature of job description makes life of evaluators hard to measure comparative performance.
However at this particular organization individual performance were evaluated based to developer lead agreement on appraisal review. But Lead was responsible to rank the people according to a provided frame work considering many aspects like code quality, delivery time, attitude, behaviors, team skills, task complexity, business impact, communication etc. The complexity was intensified when teams are operating from global remote locations and cross team ranking was requested. In addition to that it also finds flaws due to,
1. Lead’s favorableness
2. Employees bargain power to convince his contribution
3. Variation of cultures
As a result recognizing high achievers so far become very controversial. The conflict between leads and developers are always evident when both parties couldn’t agree.
Taking the same process, leads must also at a confusing state even though they found many good performers, the normal distribution curve base force normalization methods does not allow them to declare them as performers. In other terms performers are forcefully defined to be minimum so that it forcefully neglect recognition of work of many good developers. This can obviously negate the motivation of developers.
Pierce (2007) is of the view that performance is always a function of ability and motivation. He gives the equation below to underscore his argument.
Job Performance=f (ability) (motivation)
Provided above equation, when negate motivation, Job performance will decay. This will best explain the repulsive effect of incorrect evaluation.
Described above limitation in force ranked performance evaluation methods, essay point outs the significance of just and fair conduct of evaluators and processes to business. Essay argues that organizations should inculcate just and fair judgment culture to retain motivation of R&D Engineers.
Global behavior of software research and development business makes it often famous for multicultural, diverse work forces. Having people from different regions, different ages, ethnicities, educational backgrounds, R&D teams boast for diversity. The perception towards the way employees exhibit their performance at the workplace can be highly diverse when it comprises these kinds of global teams. There are high context cultures and there are low context cultures. According to the Hoftstede (2001) cultural dimensions the leader subordinator relationship and perception can be dependent on cultural variables like masculinity feminity, power distance, Long term short term orientation, individualism collectivism etc.
There for realizing the cultural aspects will be very important during performance evaluation and bringing in recognition.
It is at last the remote partner, who is going to take the final decisions on performance based annual rewards. Local organization’s try to please them as much as possible and will hardly intervene the parenting decision. Remote observers most the time have perceptional biasness to the individuals based on communication they kept, not on what actually performed. They don’t actually see and convinced the realities of actual work place. This invisible nature makes the situation more favorable for people good at convincing communication. In contrast unknowingly it may side line good developers who doesn’t possess such skills.
Firtz (1996) defines "Structure is an entity (such as an organization) made up of elements or parts (such as people, resources, aspirations, market trends, levels of competence, reward systems, departmental mandates, and so on) that impact each other by the relationship they form. There for a structure which brings more visibility to the contribution of Engineers may result positive relationships which may positively impact organization objectives. Then it will easy to recognize achievers and will make it help others to admit that.
As discussed before organizations objective towards rewarding is positive reinforcement. A line of sight should be maintained between rewards and actions. There for a rewarding mechanism has to play a vital role here. Analyzing above facts the essay suggests an SMART approach to rewarding mechanism.
1. Specific - achievements rewarded should provide an important return to both the performer and the organization.
2. Measurable - The employee's or group's goals should be within the reach of the performers.
3. Relevant - The program should operate according to its principles and purpose.
4. Time - The recognition/rewards should be provided frequently enough to make performers feel valued for their efforts
Controversially rewarding mechanisms should discourage unintended behaviors. There for it may also define disciplines for punishments.
The authors Bruce and Pasternack (1998) describe reward system reinforces the company's high expectations of its employees to grow, learn, and lead. Offshore software R&D business strategically can stay ahead in the competition, by means of employing and facilitating innovation through employing skilled innovative people and inculcating an innovative culture. As Bruce suggest, reward system can effectively contributed to attract motivate and retain good people, which obviously highlight the strategic importance of a good rewarding mechanism.
Rewarding high achievers – if done improperly?
“Used properly, rewards can increase the frequency of a desired activity (or conversely, can decrease the frequency of an undesired activity). Used improperly, rewards can result in the desired activity being suppressed and/or undesired activity being encouraged; improperly used rewards can also create confusion among employees” (Labelle, 2005). The above sentences will not only explain as to why an organization should commit to designing the best possible reward scheme for its invaluable people, but will also will reminds the negative impact of it if improperly used as discussed through the back ground scheme. Employees were not empowered; poor motivation and encouragement; people do not feel their contributions make a difference; people work defensively and not creatively, they did their job, and nothing more. Once they find a good offer they may quit.
On the other hand if rewarding only high achievers, others might feel they are sidelined and not recognized. In ethical dilemma it is so questionable, weather it is ethical to rank and reward only a single player in a team game.
Conclusion
The literature review and the research conducted proved quite useful in understanding the importance of a ‘proper’ design for a reward program for offshore software R&D business.
Reasons for failure of the rewarding program were clearly identified. The program requires to respect expectations of developers. It must have well communicated. The nature of business and the existing culture of organization must also have taken in to consideration.
Motivation was a behavior that can be influenced by reward. Even highly motivated can be frustrated, discouraged, or tired on a project. Team members like to know they are valued, their efforts are noticed, and their good work is appreciated. Each employee is different and motivated by different things.
Many rewards types were understood. Money was not always the most important. But using both intrinsic and extrinsic rewards with cash and non cash means may have led to the majority of the positive reactions. In order to reward the correct behaviors, identification of right achiever was found vital. There the role of evaluation and identification mechanism should be carefully and fairly handled. There can be limitations in any evaluation mechanism. However rewarding can also be strategically important.
Finally these kind of rewarding schemes teach employees to be good, for the sake of rewards and to avoid punishment. There for if a rewarding mechanism can address the morality of employees to keep them all happy, probably that can where most success to business be.
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1 comment:
Thanks for the great blog.
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