‘Greed Is Good’ – Remuneration, Motivation And Organisation by Leena Tulsiani

The 1980’s business culture in the USA and internationally put a considerable emphasis on personal reward on the basis that highly motivated individuals could transform organisations and societies. The extreme example in film was Gordon Gekko in Wall Street stating that greed was good. The 90’s, however, have seen companies traumatised and bankrupted by the inappropriate use of remuneration as a motivator. Yet major corporate successes have been built on reward based remuneration systems. Phones4U recently and Allied Dunbar in the financial services market is an earlier example.

The notorious Barings Bank had individual traders on bonuses in the millions yet in the long term these motivated individuals were not fulfilling the company’s objectives. Moreover even when an individual’s reward system is based on entirely appropriate performance indicators, resulting in the organisation’s success and he or she is rewarded, there may still be problems arising from the large differential between salaries of senior people and those of middle management. A payment system that depresses or demotivates 10 people for every one it motivates may not be the best for the organisation.

Wise organisations are therefore trying to reward and motivate all staff so that staff act energetically to further the corporation’s interests both short and long term and feel they have been treated fairly. However there must be properly in place the link between the items on which they are being rewarded and the actions they are able to take to influence the desired outcome.

A wise organisation accepts that:

• It is reasonable for the individual manager to act in his or her own interests.
• Managers work for people not organisations and want to please the superiors closest to them, or failing that, their peer group.
• Managers want to achieve and will be attracted to those tasks at which they know they can succeed, usually favouring the short term at the expense of the long term.

The clear implication is that an organisation should lay some groundwork before relying on a remuneration structure to change performance and behaviour. In other words the management and organisation system must be in balance with the remuneration system.

There are 5 major pre-conditions to the installation of an effective reward structure.

1. Measurement: “If you don’t measure it you won’t get it”. There are various measurement systems of which Balanced Scorecard, which sets multiple objectives and is used by Tesco, is perhaps the best known.

2. Monitoring: If the performance measures are not monitored properly or only monitored in a review at the year end, it can give the manager signals that they don’t really matter or, worse still, that failure is acceptable providing all the managers fail together.

3. Control of the tools for the job: The organisation must ensure that the individual is not over dependent on factors outside his control to achieve the performance measures set out (this is the ‘how’ part of the equation).

4. Consistency: Ensuring that short term organisational factors don’t over-influence managers or drive them from their real objective. The organisation must also ensure that its own design (be it bureaucratic or loose) is appropriate to what is being asked of managers.

5. Reward and strategy in line: An organisation’s achieving a clear strategy is not an event that will take place in the future; it is a journey. A remuneration system can be put into an organisation even when it has a relatively muddled strategy providing that organisational and management disputes are resolved by reference to strategy and the “balanced score card”. Only then will there be pressure on the organisation to refine its strategy, structure and remuneration systems.

Based on these 5 pre conditions, there is a checklist of 10 factors that the effective remuneration and reward structure must achieve:

1. Support the business strategy
2. Encourage the desired behaviour
3. Reward relevant performance
4. Be fair
5. Be substantial
6. Be tax efficient
7. Be timely (The reward must take place close to the achievement)
8. Incorporate non financial rewards (Recognition can be as important as cash)
9. Be firm (A bonus lost through missing target should not be recoverable whereas a salary increase should only be delayed until target is reached)
10. Be crystal clear

Workplace Conflict: FAQs – An Interview with Judy Ringer by Leena Tulsiani

Does conflict disrupt your workplace environment? Read on! Judy Ringer answers some commonly asked questions on the subjects of workplace conflict, difficult people, and how to manage them more effectively.

Q. What are some typical breakdowns in the workplace?

JR: I wouldn’t call them breakdowns, but conflicts. A typical conflict is what is sometimes called triangulation. One person is upset with their coworker, and instead of speaking with the co-worker about their concern, they talk to someone else about it or many others about it. Office gossip starts this way.

Different work styles, misunderstanding of roles, jumping to conclusions — these are all ways that conflicts get started.

Q. Why do people keep falling into the same traps in the workplace?

JR: Our training is insufficient. We’ve been trained to deal with conflict in ways that are not useful. A typical myth about conflict is that it is negative. And so we see people around us either avoiding it or acting out their feelings. The triangulation example demonstrates this myth. I’m afraid to speak directly to you about a conflict, but I will talk to others about it. And so the problem doesn’t go away. In fact it often gets worse.

We keep falling into these traps because we see others doing it that way. In spite of the fact that it doesn’t work, it’s what we know so we keep doing it, hoping for a different result. Of course that doesn’t work, and we keep having the same conflicts.

Q. Please give some examples of disrespectful behavior.

JR: This is an important question. It helps to understand that behavior that appears disrespectful to me may not appear the same to you. Did she mean to be disrespectful? Or is she just tired this morning? Or shy? Or preoccupied? (The list goes on.)

On the other hand, ignoring a new supervisor’s request to perform a task differently can show disrespect, especially if you don’t communicate about it. Eye rolling, sighing, clicking your tongue, giggling conspiratorially with another coworker — these often show a willing disrespect.

Sometimes we don’t know we’re being disrespectful. It’s important that new employees understand the work culture and what does and does not constitute disrespect. Social skills are learned. One of the supervisor’s jobs is to help employees understand when their actions are perceived as disrespectful and to give them alternatives. A good supervisor is a good teacher.

Q. How do I know if my boss is a tormentor or a teacher?

JR: Ha! That’s up to you. You decide. You have that power. Our most difficult situations, coworkers, and bosses can turn out to be teachers if we choose to learn something about why we react to them. What would it take to change my attitude from making a judgment about them to being curious about them, or being curious about my reaction to their behavior?

And I don’t mean to say that the boss is necessarily right or that his behavior is beyond reproach. What I mean is that I have to make some choices about how to handle what’s coming at me from this person. I could talk to him about the impact his behavior is having on me, the team, and our ability to get the job done. Or I could complain to others. Do I have the awareness and skill to notice my resistance, check out which of my buttons are being pushed, and make a wise decision about how to proceed?

Maybe I find that if I change slightly I can regain some confidence and equanimity and be able to handle the situation more effectively. This is how a tormentor becomes a teacher. As I learn about myself I begin to have new options.

Q. How can an employee create a win-win situation with a tormentor?

JR: You begin by being curious. What would make a reasonable, rational person behave this way? The answer is usually something you can identify with. For example, an authoritarian boss usually has values around perfection, looking good, being in control, and getting the job done correctly. I certainly can identify with these intentions. The way the boss acts out the intention may be rough. But now you have the basis for a conversation. You’re entering in a more positive way, and you can talk about commonalities.

Another way to create win-win solutions is by asking useful questions of the other person. What is important to them in this conflict? What would they like the outcome to be? One of the best questions I ever raised in a conflict was to ask the other person what caused them to be so upset with me, and what I might have done differently. She was happy to tell me. I learned a lot.

Q. What are some tips to handle strong emotions in the workplace?

JR: Begin by acknowledging the emotions. Take a minute and take stock of your own emotions. Name them. Are you angry, sad, happy, surprised, disappointed? Usually there are many emotions happening simultaneously. Acknowledge as many as you can. Next, identify the underlying causes. Often there’s a story connected to the emotion that’s causing you to react but has nothing to do with the current event. If you can identify the story (usually an old, familiar one), you can bring some awareness to the situation. The awareness tells you how much of the emotion has to do with the current event and how much of it is from the past event. Once you know, you can choose how to utilize the energy. For example, with a huge emotion, you might be tempted to hide it or to act it out on the other person. When you get a sense about why the event is so charged, you’ll regain some balance and be able to make a wiser decision about how to (or even if you want to) have a conversation with the person instead.

Acknowledge the other person’s feelings as well. Consider what story they might be telling themselves, and inquire about it. For example: “You sound upset (acknowledgment). Are you? Have I said something that caused you to react this way (inquiry)?” It just takes practice, like anything else.

Q. Can you give five tips to managing a difficult conversation?

JR: Most books on this topic, though they may speak differently about them, identify the same basic skills for handling difficult conversations:

1. Start with yourself. Acknowledge your feelings and gain control of them. Breathe. Identify your desired outcome for the conversation and try to guess at theirs. What do they want? What do you want?

2. Be curious. Inquire. Find out how they see the situation. Ask useful questions and listen. Don’t judge or make assumptions. Don’t take it personally. This is their story and they can tell it whatever way they want. Support them.

3. Acknowledge their story and their feelings. Validate their concerns. This doesn’t mean you agree. It means that you hear them. It’s a tremendous gift and moves the conversation in a useful direction. You get a gift, too. You learn a lot about what’s important to this person, which will be helpful when you begin to look for solutions.

4. Advocate for yourself. What is your story? What are they not seeing? Explain how the situation looks from your perspective. Go slowly and don’t assume.

5. Build solutions based on new understanding. As you begin to listen and talk, information comes out that will help you co-create effective solutions with your partner.