The Truth about Money
There has been an interesting conversation on ASAE & The Center’s Executive Management listserver about bonus plans. It all started when Jennifer put up the following post:
I am working with an organization that has 4 full-time staff, an annual operating budget of $600,000, and a membership of 1,200. The organization is interested in creating a staff bonus plan/program. If you are of a similar size, would you be willing to share your bonus criteria, financial formula, and time lines?
The responses were all over the map! Some hate bonuses, others think they work, others think they work sometimes, others think we should just get a salary and be happy with it, others say it varies by individual, others say generational differences are involved, others say corporate and nonprofit are totally different, others disagree. Sheesh!
And a couple of times people got a bit testy about it. It’s always hard to tell the emotional tone of an email conversation, but it felt a bit charged to me.
And that shouldn’t surprise anyone: we were talking about money! Personally, I think our whole society is a bit pathological about money. We don’t really know how to relate to it, yet we don’t often admit that. It’s like we’re all going around pretending that we know exactly what we’re doing when we decide to pay people what we do, and further: we’re pretending that we’re not pretending.
So I will admit that I’m pretending. I really don’t know how best to pay people or motivate them. But now that I’ve admitted that I am (we all are) pretending when it comes to salaries, etc., let me lob out a few grenades on the topic. Remember, I’ve already admitted that I don’t know what I’m talking about:
1. Pay people more. In general, we should pay people more than we are paying them right now–particularly the people on the lower end of the pay scale. If you say you can’t afford it, then cut other things. Do less. This "doing more with less" thing is not sustainable. There is too much burnout and inefficiency (particularly in the nonprofit arena) in having people work really hard yet feel they are not being paid enough. If you can’t produce a great organization based on good salaries, then go do something else. Because once you DO create a great organization on great salaries…it will become greater. I don’t believe there is real growth in paying people less.
2. Be completely transparent. Publish everyone’s salary for everyone else to see. What is the value in keeping all this a secret? Really. Who benefits from this? The only reason I see for keeping salary information secret is because you are paying people unjustified amounts (either too low or too high) and you don’t want to have to defend it (back to the whole pretending we’re not pretending thing).
3. Make people happy. The money thing is important and all, but if you put HALF the effort you put into figuring out your bonus plan into efforts to help your people feel more engaged, fulfilled, and happy at work, you’d probably get double the performance without spending another dime. Money might be a part of it, but imagine if they totally LOVED their job. They LOVED coming to work every day. They knew how they were making a difference and they felt supported. Why aren’t we focused on that?