Leadership Myth #2: Performance-based compensation works
I am inside the Apple store in Nice, France, and observing the running of the show. Lots of blue t-shirts are sprinkled evenly over the shop: I count 18 employees in total. Tattoos are bared; shaven heads, goaties and studded belts are sported - Pretty much anything but the "conservative" look. The Blue T-shirt unifies their identity as staff, and they are all busily engaged with customers. Whilst the store is packed with people wanting to browse around, check out the latest laptop or have an Apple product repaired, harmony reigns. In fact, the noise level is very pleasant despite about 30 conversations going on at the same time in the same place.
Three Blue T-shirts are standing at the store entrance to greet you with a smile and ask "How can I help you?" Wow: As a potential customer you already feel looked after and valued, and you haven't even ventured in yet!
The Blue T-shirts are all equipped with their own i-pad or other similar i-device as they serve the customer. These "techy" store guys and gals (note!) all appear to be engaged, competent, helpful and above all, enjoying what they are doing. Those who want a thousand features uploaded into their i-pads are patiently listened to, whilst others with endless questions on a potential purchase are answered to. No eyeballs are rolling, no huffing is heard: This is a place run with a genuine concern for customer service. Hiding behind the counter or a screen is simply not the Blue T-shirts' operational philosophy. They are working by choice, with commitment and autonomy, and with a strong sense of belongingness and pride in what they do.
So how is it that this buzzing and even slightly over-crowded store still attracts more customers to come on inside and live a buying experience, besides the competitive products and design of the store? And just how is this pleasurable retail experience led from behind the scenes? The quote "caring starts at home" comes to mind, "home" referring to the work environment. In the case where employees do not feel valued from within the Organisation, how can they be expected to go about their daily work engagingly, let alone show commitment to providing high quality customer service?
Behavioural science proves that human beings are not rational, but social. In other words, it is not the "hard money" which motivates employees to want to play a part in the company's success, but rather the "softer" forms of compensation, such as Learning & Development and Autonomy. For instance, granting autonomy to your employees by giving them the leeway to choose their own methods to achieve the common goals of the team, your underlying message is Trust. Trust fosters rapport, and the two together foster a culture encouraging engagement levels to rise.
So, whilst performance-based compensation might support employee engagement, it certainly doesn't drive it!