A Simple Employee Incentive


April 11, 2008

by Marshall Goldsmith

The multi-billion dollar incentive industry would like to convince managers and small business owners that gift cards and free trips hold the key to employee retention and engagement. It’s true most employees expect bonuses, products, and trips, but recognition really boils down to the act of granting attention. What type of recognition are you offering employees once the Starbucks (SBUX) gift card runs out?

Consider the approach of founder and former chief executive officer of 24 Hour Fitness, Mark Mastrov. He told me he motivates his people by making an emotional investment. That means showing genuine concern for peoples’ lives outside of work. Mastrov said: “Sales associates are looking for leaders to believe in. Managers should sit down with them and ask what their goals and aspirations are. Ask them what they want in life and how working for the company will help achieve those goals. Ask them about their family and friends, their passions and interests. Bring up those questions even before you ask about sales. It shows that you care about who they are. It earns respect and it’s the easiest thing to do.”

Motivating is about bringing out the best in people, but your people will not listen to your message until they know you care. Clearly, Mastrov was onto something. Over the past two decades he has turned a $15,000 loan from his grandmother into a worldwide health club chain.

Separating the Great from the Near-Great

Think about what Mastrov did. Instead of rewarding his sales associates just with bonuses and commissions, he inspired them by showing he cared about them as individuals. A fellow BusinessWeek.com columnist, Marshall Goldsmith, concisely describes this strategy in his book, What Got You Here Won’t Get You There. He writes: “The ability to make a person feel that, when you’re with that person, he or she is the most important (and the only) person in the room is the skill that separates the great from the near-great. Oprah (BusinessWeek.com, 2/2/06) and Bill Clinton have it. When they’re talking to you, on camera or off, you feel as if you’re the only one who matters to them. It’s the skill that defines them.”

Goldsmith’s lesson reminds me of an experience I had with financial guru Suze Orman. She was a guest on a TV show I was hosting. Prior to the show, Orman asked the makeup artist about her financial situation. The woman opened up to Orman and told her about her struggles with debt. Orman was dispensing advice as the show’s producer was urging her to get on set. I know because I was standing off to the side of the makeup room and heard the conversation. I doubt Orman remembers it, but it left an impression on the makeup artist, who changed her lifestyle after that brief exchange. For that short time, Orman made that young woman feel as though she were more important than anything else, including the show. And the cameras were off.

Going Topless at Yahoo

Surveys conducted by Laurel (Md.) research firm The Jackson Organization find that the majority of employees feel unrecognized. People who feel recognized, however, demonstrate a stronger desire to do what it takes to see the company succeed. Why then, if most every company offers incentives, bonuses, and gift cards to reward desired effort, do most companies fall short when it comes to employee engagement? I believe employees want to be recognized by their direct supervisors, but many bosses are too fixated on their e-mails, phones calls, or daily tasks to pay attention.

There does seem to be a crisis in getting employees’ attention. A recent Los Angeles Times article by Jessica Guynn featured companies like Yahoo! (YHOO) going “topless” – no laptops allowed in meetings. It seems as though people are so connected to their Blackberrys, iPhones, and notebook computers that they are only paying partial attention in staff and business meetings. One engineer in the story said he felt discouraged after being asked to spend hours creating a report, only to find three-quarters of the executives in the room busy on their laptops.

Respect is the Best Incentive

He felt “disrespected” and “ignored.” His supervisors missed the simplest way to give employees a sense of fulfillment and meaning. When you’re face to face with a colleague, employee, or customer, and you check text messages or Blackberry e-mail, you’re communicating something – you are telling that person that whoever is on the other end of the message is the most important person in that conversation.

In your next conversation with one of your employees, try speaking as if he or she is the most important person in the room at the moment. Look him in the eye, avoid interruptions, ignore gadgets, and ask questions about his interests. It’s the simplest, least expensive, and most effective incentive available.