To the last cent...
In my previous post, Leadership, In practical terms, I outlined the Traits of a leader and Principles that great leaders exhibit.
I received feedback that I was missing Integrity principle and Rewarding trait. I admit that the first, Integrity is a glaring omission on my part, but mostly it is self-explanatory*.
For the latter, rewarding, I am addressing it here at length. As we just finished the bonus allocation season in Cisco, which will get rolled out in the end of the month, I have these thoughts fresh in my mind and would be interesting to expand on the topic of compensation – and give you, the leader, some practical advice.
In short, identify your High Performers and your High Potentials. Reward the High Performers openly and the High Potentials discreetly. Reward them first and distribute the rest through your remaining staff generously. There should never be leftover budget. If you end up with one or more cents left, you should consider hiring new people or look inwards for your metrics of success as you may be the problem. For the remaining staff: create growth plans for them and celebrate their accomplishments. Offer them personalized advice on getting to a higher reward level (becoming High Performers) and offer them free coaching and the obligatory regular connects/feedback.
Identify your High Performers and your High Potentials. Reward the High Performers openly and the High Potentials discreetly. Reward them first.
High Performers
The higher performing employees - excelling in communication, organization, delivery or coordination; these are the ones that made your year and helped your own rewards. Pay them well, they should be the first you consider and to the most you can give back. When you deliver the happy news, challenge them for the following year to deliver at something exciting (for them). Note that your top performers are also the highest risk of burnout and money alone does not cut it. Continuously create conditions for your top performers to engage in creative work and don’t lock them to a given scope. Reward them openly and celebrate their success with the team. In short – give them more money (bonus) and opportunities to unwind (like Hackathons).
High Potentials
In many cases, High Potentials and High Performers are not the same people. I recall vividly a few of my high performers that had excelled in the day to day but also had latent leadership ability. Others that had latent potential without the performance. Also had others that performed well but did not show longevity for growth.
Your potentials should be rewarded highly but discreetly as not all their peers may see the potential as you do. The emphasis on rewards for these employees are Equity (RSUs) and Opportunities to Network and Grow. Show them that you are investing long term in their career by telling them what potential you see in them and how you will give them the chance to live it. Also, of course, what is in it for them if they live their potential. If you find people that are both potentials and performers, you are in luck.
Caveat: the “inner circle”
I was challenged by one of my mentees to deep dive and explore the concept of inner circle as he felt it was excluding him from growth in his team. An Inner-Circle rewarding scheme describes the notion of playing favorites at the reward season by continuously, year over year, grow and reward the same sub-set of people and fail to acknowledge and see potential in others.
It is a form of unconscious bias, goes against HR recommendations and, ultimately, goes against your own interest. Inner circle – based rewarding does not foster growth in your organization, causes active attrition, does not welcome newcomers or high potentials and makes your group weaker by being dependent on a specific set of elements and vulnerable to their commitment.
Like most of the unconscious biases – your duty is to identify it, acknowledge it and squash it.
* Consider seeing the Documentary called "The Inventor: Out for Blood in Silicon Valley"
