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How Companies Can Rethink Their Compensation Strategy With the Help of Behavioral Science
You value your team. That’s why you put together a compensation package that includes a competitive salary, generous benefits and even the occasional rooftop happy hour. But, if you add in a few more key elements, you’ll create a compensation strategy that helps you connect emotionally with your employees, keep your existing team motivated and attract the right candidates when it’s time to grow.
At Next Step, we look to the latest research in Behavioral Science to create marketing campaigns that help companies motivate their users. It turns out you can tap into this same psychology to motivate your own team as well.
In our Discovery Meetings, we like to kick things off with a Simon Sinek, “Finding your Why” video. Thinking about the Golden Circle gets you to shift your mindset. We want you to go beyond thinking about what you do and dive deep into how and why you do it. When you make your messaging come from the inside out, you go beyond the basics and create something unique and powerful. As Sinek says, “People don’t buy what you do — they buy why you do it.”
Basing your messaging on this concept creates something authentic. It helps you generate momentum and inspire loyalty. Knowing the driving purpose behind your business is an essential element of any website or marketing campaign. Applying this concept of why can also help you generate an inspiring company culture, starting with your compensation.
Let’s apply this Golden Circle to your compensation strategy. The outer ring, the what, is the wages and benefits. This is just the basics and you’re already covering it. Unfortunately, if you stop there, as many companies tend to do, you’re missing out on a powerful way to motivate your team.
Let’s step one level deeper and focus on the how.
How: Accessing More Potential By Seeing The Whole Person
Here’s a simplified version for helping your employees access more potential:
Whenever we add a new member to our team, I ask them to visualize their lives a few years down the road. What’s making them happy? What bold details stand out about their jobs? When I asked Molly, our project manager, to visualize her ideal future, we quickly discovered how much she craved taking on a leadership role.
We created a strategic three-year plan to identify and overcome gaps between her current skillset as a project manager and those needed to take on an executive role at the agency. I asked a senior advisor to mentor her each month. Together they set goals for the year and broke those goals down into quarterly and monthly milestones. I also met with her quarterly to review her progress and sign off on new responsibilities.
When I mention this to other business owners, they often protest that they don’t have time for such a time-intensive investment. Yes, I reply: Quality mentoring is time-consuming. But, I also remind them that today, Molly is practically running the show at Next Step.
- Dream Assignment: Ask them to envision themselves three-to-five years down the road.What are they doing? Where are they in their careers? What specific details of their dream assignment excite them most? Encourage them to trust their imagination, pick up their pens and free-write or sketch their dream vision.
- Roadmap for Success: Either work directly with your employee or ask their manager to help them draw a visual roadmap on how they can reach their dream state. Be sure to list plans and potential allies.
- Roadside Assistance: Assets within your company can help lead the way. For example, we paired Mitchell, our webmaster, with Diana, our senior developer. As his mentor, she’s teaching him advanced coding skills and getting experience as a leader in return. Another option is to create an “accountability” group made up of peers who have similar, but complementary goals.
- Accountability: What gets measured gets done. What needs to happen each month, each quarter, each year to get your people closer to their desired dream state? During our annual strategy session, we first review the firm’s goals, then our team splits into groups and discusses their top goals for the year, both personal and professional. We encourage them to share their progress every month in a variety of formats, from a dedicated Slack channel (e.g. #personal_goals) to monthly meetings where we discuss which goals we met, give encouragement and then head off to a well-deserved happy hour.
Diving Into The Company’s Why
Every business has its own unique why. Just as you asked those tough and respectful questions of your employees, it’s critical to do the same for your company: What gets you excited to come to work every day? Why did you build and/or stay at this particular company? That’s your why. Once you’ve found it, share it. Your why is so powerful that you can use it to empower your team, get buy-in from prospects, loyalty from clients and support from your network.
I’m on the board of the San Francisco chapter of the Entrepreneur’s Organization, a global business network of 10,000-plus leading entrepreneurs. One of the businesses we worked with was founded by a woman who runs a beauty salon that specializes in eyelash extensions. At first glance, it’s “just” eyelashes. But everyone who works there has a sense of purpose that goes beyond beauty products. They know and support their company’s why: teaching the skills that empower women to become financially independent. That’s way more than eyelashes.
By clearly articulating its why, the small company created an atmosphere of purpose. It inspired workers to become part of something bigger than themselves.
It’s not just Next Step that these ideas are working for. The folks who regularly show up on Fortune magazine’s annual Top 100 Best Companies to Work For have found ways to integrate these concepts into their compensation strategy. Move your Mollies up the growth ladder, and the company will follow.