Imagine your company is overwhelmingly losing talent. One after the other, every month. By the time you realize it’s too late. What to do?
That was the case in one of my clients from the Telecom sector. The consequences were huge: product delays, loss of a market window, distrust of the environment and high HR costs of bringing in new talent.
It’s not a rare case. According to Gallup (a researching consultancy), just 13% of employees are engaged at work worldwide. But in our case, by the beginning of 2017, we were starting to have a turnover rate of about 30%. When we began to study in detail the reasons why employees left, most of them (about 65%) admitted leaving because they were disengaged.
One of the most significant challenges for modern companies that works with creative employees is how to pay people for work without destroying their motivation. For the Management 3.0 perspective, most compensation systems are considered unfair by employees and unscientific by experts. That’s why it would be wise to consider some lesser-known alternatives that are based on real merits instead of imagined performance.
Thus, I suggested introducing two Management 3.0 practices to try to face the situation: Kudo Box and Merit Money. We are going to talk here about how we implemented merit money. One of the downsides was that, because company policies, we couldn’t use real money. So what we did were use tokens that employees could then exchange for prizes. These prizes could range from t-shirts to vacations trips and were based on the number of tokens obtained.
Each quarter, the teams (no more than nine people) had 37 tokens that could be shared among themselves. And to distribute them, we established some basic rules:
- The person who gave the token had to justify it (through a platform).
- No more than two tokens in a row could be given to the same person.
- No one could keep any tokens.
Once the quarter was over, the points were reviewed and computed. Employees could decide whether to use them in the marketplace at that time or to accumulate them for later.
I remember in particular one day that somebody used his points to buy an amazing Halloween ghost.
We got this results so far:
It is challenging to correlate merit money practice with results in turnover rate and happiness index. Nevertheless, we can have some signals about the tendency over time. So far, we were able to maintain and improve both: the employee turnover rate and the team´s happiness index. That was great news for the company, and the future looks hopeful.
So next time, when your company has problems with loss of talent, keep calm and use merit money.
Image: (c) 2011,Erik Mattsson, Creative Commons 2.0