Break the Golden Rule: How to Retain Your Best People
by
Daiv Russell
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Published on this site: January 2004 - See
more articles from this month
It seems so simple, doesn't it? "Do unto others as you would have them do
unto you." The Golden Rule seems so universal that it should be a panacea
for all human relations. Simply treat everyone the way you would like to be treated
and everything will flow smooth as silk, right?
But wait... something's
wrong...
Does your twenty-something hotshot Java developer want the
same things out of their job that your forty-something database administrator
wants? Is your technical writer looking for the same opportunities and rewards
as your webmaster?
Obviously, their needs are very distinct, but many IT
managers use a one-size fits all approach when rewarding their key employees.
When a project completes, everyone on the team gets the same thing, be it a comp
day or $100 gift certificate to Amazon. Giving the same thing to everyone is what's
fair, right? But is it really fair to your best people?
Hold On to Your
Top Performers
Most CTO's realize that The
Pareto Principle applied to IT staff means that 20% of your people are delivering
80% of your entire team's bottom-line value. In addition, nearly every software
management book cites studies comparing the productivity of the best software
developers to the least competent (yet still useful) programmers. The difference
between the extremes has been reported as high as 100:1. The closest these numbers
ever seem to come to one another is about 4:1. But how much more does this extreme
difference in value end up costing?
Assuming that your annual cost for the
least competent developer is $50k, what are you paying your best developers? $80k?
$120k? $150k? Since a lot of the costs for an employee are fixed, they don't increase
in relation to base salary. For the purposes of this examination, let's use some
worst-case figures, $150k. Assuming that your $50k developer delivers $50k of
value (otherwise they'd be reallocated, right?). If your best developer
is a mere four times more productive than the worst, they deliver value
$50k in excess of their cost. The following chart depicts how this rate of return
skyrockets, depending upon which assessment you trust.
Note: The 100:1 comparison is intentionally missing, because
the curve was so staggering that viewing the distance between cost and value of
the 1:4 best programmer on the chart was not possible with the naked eye.
If
IT Management invests in more training for the bottom-rung programmers, costs
immediately increase, but without any guarantee that productivity will likewise
increase. Consider, also, how much of your salary is factored into the
"cost" of this moderately competent employee? Probably none. Management
costs are usually invisible, factored away as overhead. It certainly feels
like you're being productive - trying your hardest to bring along the strugglers,
hoping that they eventually rise above their shortcomings. Consider how much of
your time is spent with either of these employees:
- The self-managing dynamo who, with speed of a bullet train,
handles customer complaints, delivers defect-free results,
and even cleans up after himself in the breakroom
- The trainee who has some interpersonal issues, occasional
product defects, difficulty understanding requirements,
and shows up late on Mondays because of his hangover
Obviously your best performers are worth their salt. As such, it's
incredibly important for the CTO to impart effective retention strategies, as
this handful of hotshots embodies 80% of your team's value. Their experience with
your unique systems combined with their talents and ability to get the job done
in a pinch makes them nigh unto invaluable.
But, what's the best way to
invest in your best people? What should you do to show those top performers that
they're appreciated, and increase the chance that they'll be there for you when
you need them again?
What's the best way to reward your superstars?
Pay
them cold hard cash. If your $100k developer puts in 70-hour weeks during
the final push of a key project, most pure cash rewards would come in at a rate
less than minimum wage. Simply reconsider this alternative. This can be quite
insulting, seen, instead, as a paltry offering to buy them off and ease your guilty
conscience. Regardless, after the taxman gets his share, the net impact of this
money can be far less than it costs to pay it out.
Send them to extra
training. Some engineers might be excited about an opportunity to take training
in a new city on the company dime. They may even ask to spend the weekend before
or after, at their expense, just to cash in on this chance to get away for a bit.
Be careful though, this could appear to your high achiever that you found their
performance lacking. They might assume that they need further training to be worthy
of the real reward that lies waiting. If your achiever is sensitive, they
might get concerned that all of that effort they exerted was a red flag to you
that they were struggling along. Offering a training reward in this situation
could be interpreted that this struggle was obvious to you, and you are now taking
corrective action.
Offer a promotion. Though the allure of an impressive
title or tangible benefits accompanying a promotion may motivate some, most technical
people have come to realize the dangers of the
Peter Principle. They fear that their world will change drastically should
they become a team lead, project manager, or department head. Your turbocharged
techy probably likes what they're doing right now. That's why they're
so darned good at it. Before considering a promotional reward, make sure that
the new position actually leverages the skills and talents exhibited by these
high achievers, or you may end up losing them. If you decide to take this chance,
make sure your top performer knows that he can switch back, if thing doesn't work
out with the new role.
Provide additional holiday or vacation time.
Everyone likes time off, right? Unfortunately, if you offer this reward to a very
techy person who is so completely immersed in their occupation that they have
little social interaction outside of the workplace, they may not know what to
do with themselves during this free time.
Give them stock options.
Although this may seem like a decent idea, with the intent of imparting ownership
and profit sharing to the worker, most I. T. staff are gun-shy of the stock market
since the tech stocks tanked with the dot com bust. If your company is public,
employees know that the future value of stock may end up being less than the option
strike price. If your company is not yet public, your staff might feel that you're
handing them a wad of lottery tickets, in lieu of a real reward they can actually
feel.
Do unto others as they would have
done unto them.
There are many ways to reward your best. It's easy to
be tempted to offer all of your high performers the same reward. It's especially
easy to offer them what you would want.
All of this leads to a very simple
concept: communication. Simply put, ask the your shining stars what
they really want. What is it that will allow them to truly feel appreciated? The
path that leads someone to be a great technical resource is very different than
the path of a great IT Manager. You may be surprised by the answers you hear.
In fact, your employees may be surprised, as well, to learn that you are actually
giving them a say in determining the reward for their efforts.
- Do they want cash?
- Do they want more challenging job assignments?
- Do they want some time off to appreciate their children?
- Would they prefer more mentoring?
- Do they simply want to be acknowledged at a company function?
- What rewards have they received in the past that really
made them feel good?
The answers can vary significantly for each person, depending
upon their long-term goals, how their needs are currently being met within Maslow's
Hierarchy of Needs, and the current stressors in their life. Don't make the
mistake of assuming that the answer you receive today will hold true throughout
your top performer's career.
Ultimately, instead of attempting to reward
your people the way you would like to be rewarded, break The Golden Rule,
and spend the time to actually learn their needs and wants. By involving them
in decisions that affect their lives so directly, you might coincidentally cash
in on the
Hawthorne Effect, and motivate your employee by showing you care. You will
likely find that you've created a work environment that has makes your high achievers
happier than they've ever been. As a result, they will find a way to push themselves
to new levels of productivity, realizing that their efforts will result in rewards
that are truly meaningful to them. You may even earn their respect and
allegiance for a lifetime.
Daiv
Russell is a Software Engineering Strategist with Envision
Software, a software project management and development
outsourcing company committed to helping information technology
organizations solve problems, increase revenues, and reduce
costs by guiding software development teams through project
management chaos. This article was originally published in
Luminary, Envision's monthly software
project management newsletter.
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