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10 May 09 Pay Peanut, Get Monkey

If you pay peanuts, you will get monkeys; if you pay carrots, you will get rabbits. This adage has nothing new to offer but it still amuses, and in this laughter and gag, management misses the point. They keep on paying peanuts and they keep on getting their back itched. This is the reality of the corporate world. Companies have lost the trust of employees and thus the loyalty is waning out. What is the reason behind this depleting loyalty? Well, one of the answers could be, or more precisely the answer could be a lack of a proper recognition and reward system in companies.

It is not uncommon to find people who complain about not getting credit or rewarded for the role they played and the benefits they bring to the company. Hence, the employees’ morale weakens over the period of time, and they hop to another job as quickly as they can. The reason behind this job hopping is the absence of any intangible (read quality) benefit, in the absence of which employees look for the money and money alone. If money becomes the sole criteria for taking up any job then there will be nothing like loyalty and long-term commitment.

A proper reward system is one of the things that can stop quality employees from leaving. A reward should acknowledge the importance of the work the recipient has done for the company. The person should get due credit for the work he or she has done. This will infuse quality at the workplace, and the appreciation they get in return of the work they have done will motivate them not only to stay with your company but also to better their performance. If your company provides better work environment, and promptly return the employees’ dues then the importance of money gets belittled. Money only works wonder if everything else is indistinguishable.

A proper reward system should be responsive and customizable. No one-size-fits-all strategy should be used for rewarding the employees. If your company indulges in this then always expect the same mediocre result from the people on the other side. You pay peanuts and you get monkeys! There will not be even a single star performer if all a best performer of your company gets are peanuts and carrots.

Star performers do not just help satisfy more customers but they also help in securing good investments. We should understand here the triangular relationship between, employees, customers and investors. One better employee will fetch at least 10 loyal customers and 10 loyal customers will bring 100 more like them. This way the customer base of your company will grow and with it will grow sale of your products. The more you will sell the bigger your company will become and the better employees you will attract. These high quality employees will breed more sales that give investors more confidence in your company and the more confident the investor will have the more he or she will invest in your company.

For investors, the size of the customer base of your company is indeed important but the quality of the team that you have assembled to satisfy the needs and wants of your company’s customers are more important. Employees, customers and investors are three sides of a business triangle, weaken one of them and your business will tilt and tip over.

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