Motivating people: It is about Money!

3 2 09  Bearman Cartoon Job Satisfaction copy

3 2 09 Bearman Cartoon Job Satisfaction copy (Photo credit: Bearman2007)

The issue of employee motivation and productivity is one that should be the primary concern for any executive, from the first line supervisor in an assembly plant, to the CEO of the largest multinational corporation. Being able to properly allocate resources to as it is said in corporate speak “meet or exceed the expectations of your stakeholders”, many CXOs forget that their primary engine of growth is actually the effort that their employees put to meet the expectations of the customers. The needs of the employees are in many cases easily discounted, and/or explained away in multiple meetings, and by Powerpoint specialists, without a real knowledge of the business, and with a focus on their own rewards (Money). They use headlines of articles like the one from McKinsey to justify denying company wide salary adjustments, by explaining that employees do not need more money, they just need a pad in the back.. If they even open the article at the end of this post, they can realize how wrong they are just by reading paragraph one…

“Numerous studies1have concluded that for people with satisfactory salaries, some non-financial motivators are more effective than extra cash in building long-term employee engagement in most sectors, job functions, and business contexts” (Dewhurst, Guthridge, Mohr, 2009).

SAH international

SAH international (Photo credit: Wikipedia)

During my years as a regional manager with operations and employees in many countries, I experienced how the corporate executives will just tell me directly that there was no money for raises for “international employees”, and that we should not advertise that the U.S. employees were getting one (after years of nothing). At the same time the same executives will ask me why the employee satisfaction scores (mine and company wide) were decreasing on a yearly basis if we were “implementing more recognition programs”? It always puzzled me how these people had been promoted if they didn’t understand the basic principle of business  the “Return on Investment” .. I told several senior executives that ROI meant that you should have a multiplier “R”eturn” on your “I”nvestment”, and that if your “I” was Zero, your “R” should also trend to Zero (the old .. anything multiplied by zero should be equal zero) .. And I say should because in corporate speak, you could invest zero and they expect the result not to be zero, but that’s a math that I am not familiar with.

Employee Motivational Factors - courtesy of johngray.com

Employee Motivational Factors – courtesy of johngray.com

In my opinion, this is one of the biggest challenges that organizations can face today, the seemingly disconnect between the interest of the stakeholders, and the interest of the executives. Recognition is one of the important factors, but it is so, “after” the most basic ones are met, including “financials” if we look at the most basic Maslow’s Theory of Motivational Needs. In many cases these executives are still receiving and cashing in their stocks and bonuses for a substantial profit, while at the same time they are arguing for “recognizing people” and not paying them a fair salary for their efforts. Executives think that employees are not aware of their games, and that they can continue their games at their employees expense. They forget that today it is easy to see which company executives are cashing in their stock options, and which ones got bonuses (at least in the U.S.).

If as the article heading say you want to find out how much your company executives are making, here are some tips that can help you:

One year of insider stock transactions 2012-05-02

One year of insider stock transactions 2012-05-02 (Photo credit: faul)

Executives and Insiders Stock Profits

  • Using Yahoo Finance: Enter the company stock at the top left field where it says get quotes, select “Get Quotes”, then scroll down on the page looking at the left column until you see the option “Insider Transactions” and there it is.. Here is the example for Cisco’s Insider Transactions
  • Using the InsiderTrading.Org site: Perhaps this is even easier.. Just go to the page and you have the latest listing of insider transactions. You could also choose between the options on the top menu for insider “selling, buying”, large stock “buying, selling”, etc.

Executives and Insiders Bonuses

  • Using Yahoo Finance: Enter the company stock at the top left field where it says get quotes, select “Get Quotes”, then scroll down on the page looking at the left column until you see the option “SEC Filings”, and then scroll down until you find the form named “10-K”, and select the “Full Filling” option.
  • Using the U.S. government database EDGAR: On the web site select the option Search for Company Filings, then select the Company of fund name, and on the left hand side look for the document called “DEF 14A”. 

Now that you have some information about how to find your organization’s executive compensation figures, and the original McKinsey article on employee motivation, I wanted to ask you. In reference to the McKinsey article, do you believe that executives actually understand that recognition as a motivator is in addition to money, or do they think that it is just recognition?. In addition, if you used any of the tools to find your organization’s executive compensation figures, do you think they are being compensated on the same way as the company employees, and organizational performance?

Motivating people, getting beyond money – McKinsey Quarterly – Organization – Talent.

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