Should You Pay Employees Extra for Working on Special Organizational Projects?

Somewhat recently (sorry – I’m a bit backlogged) a question came up on one of my HR-focused discussion groups in Facebook. The poster was seeking ideas on how to compensate employees for being part of a company effort described as…

“…a pretty large scale conversion with two of the major systems that our employees use. The effort is substantial – but not full-time. The employees would bring their experience and the fact that the system upgrade would be beneficial to all employees – not just those on the conversion team.”

The poster was asking about whether they should consider a bonus or possibly a temporary increase in pay while the employee worked on the project. A few folks weighed in suggesting a bonus a project end. Others saw the opportunity as way for an employee to grow in the job and the company with no bonus.

Here’s my opinion – and I have stayed at a Holiday Inn in the past – AND – I’ve been doing this for 25+ years and have probably read more research on motivation and engagement than almost anyone else… almost.

Net-Net:

Tying this activity to more money – either as a bonus or a temporary increase – is probably the worst thing you can do.

Money=Mercenary

The first, and arguably the biggest reason to avoid tying the effort to money is once you do for this one project you will have to do it for EVERY project that falls outside the basic job description. No matter how small a deviation – the person will eventually say – “Wait a minute… you paid Joey a bonus (or raise) for working on the system conversion – what do I get?” To which you would probably respond… “That was a much bigger project and required more time and energy.” And they will respond with “Then pay me less – but pay  me.” And now you’re into a discussion of “how much” for every little thing that isn’t spelled out in the job description. It may not happen at first. You might get away with a couple of little projects – but sooner or later your employee base will learn that extra work = extra pay and they will start to “work to rule” unless compensated for it.

Second – people become income adjusted. Once they get an increase in pay (either as a bonus or a raise) they adjust their lifestyle and spending to that level. Unless they are disciplined and experienced with bonus structures (like sales people) increasing income for a brief period can become problematic because they will feel deprived when the increase disappears. They will feel they’ve had something taken away from them and forget it was temporary in the first place. They say they won’t. But they do.

Recognition=Relationship

If a client paid me to solve this dilemma here’s what I would suggest.

  1. Position the opportunity as a growth, training, career opportunity. Make sure the employee knows they are being chosen based on their history as an exceptional employee and their skills are needed to make the company better for them and everyone else. In this case, additional work is actually recognition. Sure, the disengaged with scoff… but the engaged will love the opportunity to contribute.
  2. Make sure their manager understands the opportunity and scope so there is no misunderstanding of expectations of time and impact to current workload. Allowances need to be made to make this work.
  3. Use internal company communications channels to highlight the efforts of the team and recognize people on a regular basis for their contribution. Being open and transparent about the nature of the project and that this is NOT a paid gig lets the entire company see the impact and the importance of this initiative. This also provides recognition on an ongoing basis for the “project team.”
  4. Make sure the employee, the employee’s manager and the project lead meet regularly to ensure nothing is being overlooked and the core job functions are being handled. No surprises.
  5. Include the project outputs in the employee’s review process.
  6. Consider a final “end of project” recognition event – publicized – with social recognition, a symbolic award if the project is big enough, and a non-cash award that can be used for either merchandise or individual travel (and gross up the award for income taxes!!!)

Your goal throughout the process is to establish that “special projects” is how the company and the individual grows while providing better outcomes for all. Keeping the reward and recognition outside compensation communicates a different, more emotional and less transactional, relationship between the work and the employee.

You don’t need more mercenaries you need more supporters.

Don’t get me wrong – this isn’t about being cheap – or avoiding paying for work – it’s about effectively communicating that being part of the company includes extra effort to make the entire employee experience better for all. Once you link going above and beyond the job description to money, you have established a precedence for all “out of the box” ideas and efforts.

Caveat: If the project morphs, changes, grows and it is something requiring ongoing attention, then create a new function/job class and hire to it. This is not about avoiding headcount – it’s about managing “pop ups”.

If your employees demand a monetary quid pro quo for these kinds of “projects”, you’re already deep in a hole and need some real intervention.

But that’s more of a book than a blog post.

Agree? Disagree? Hit me in the comments and let me know.


 

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