There are many types of payment and people all around the world are using them to get their team up and running but as it seems we need new and modern ways to get our team motivated more and more and that’s why today we want to introduce you to another type of payment that may come in handy or startup companies more than other businesses and it is called Award based payment.
In this article we will take a look at the nature of Award based payment and then we will try our best to explain to you a couple of ways to execute this approach.
What is Award based payment.
Award based payment in short is a way to make your employees payment in a way that it has multiple sections and this must not be mistaken with percentage based payment. In percentage base the employee will get a certain percentage of sale amount but in award based system the awards itself might not be necessarily financial. You may give your employee a day off as reward and stuff like this but remember that the payment is key. You should make it financially worth for people who work for you. In this system you have to make a combination of financial, material and emotional support.
You should put an advantage on doing things well and doing them fast. But there is a critical margin there. If you focus on speed more than quality then they may give you half-baked result and if you focus on result more than time then things may drag a little bit longer that what you expect because it of some sort of extra caution from the employee who wants not to lose the reward. The reward can come from your creativity. Sometimes people needs to be acknowledged and sometimes they need money or a day off and you should be able to analyze their need and give them reward based on their need. Do not put this in the written contract because it may cause unusual expectation in future.
Don’t overdo it
When we say do not overdo it we are literal and you should put limit on your rewards.do not give someone more than usual and try to make a chart for yourself. Using this chart you may see what action will get to which result and this way you will be able to handle it perfectly. Try to rewrite the chart for different projects and put multiple options as reward because this is about personalities as well as project and you have to be flexible.
Overdoing this process will create a type of laziness that manifest whenever you delay or ignore giving reward for some task and then people won’t be that eager to finish upcoming tasks. overdoing will make your team productivity fall dramatically and this is not something you want in a startup.
Make a team not a feeding squad
There is another side of reward which is called punishment. Well when you want to go for reward based system then you should have some sort of opposite system as well. The main purposes is giving people a new sense of responsibility so they know that when they do it right they get the right reward but doing it wrong will have some consequences. Once again this is the main key because you have to a set the punishment in a way that fear of it won’t become a trouble itself and from the other side if punishment is too shallow then people won’t be afraid of making mistakes.
If you give them too much award then the whole purpose of Award based payment will be neglected and you will have a team hungry for more reward. They even may be so eager to get more reward that it distract them from the real work and this is something you should handle with extra care. give them reward but not for every single thing. Do not let your team have the wrong assumption that they will get reward for what is in their normal job description. Give the rewards only for extra things. This may be doing it fast, doing it extremely well or even great team work and if you give the reward for things outside of this role then you will be in trouble and this trouble even may not be solvable and you may have to change your team which can be costly.
Team reward is a thing
When you try to implement such approach then you can consider Award based payment as a team act too. this means that you can give reward to the whole team. For example if your team managed a huge and hard project within a tight schedule then you can reward the whole team by a day off or some percentage of your whole income from that project. In these cases, acting equal is the main key element. You should treat everyone equally and give them the same type of thing. Even if the amount you are paying is not the same, you can still show them that you have treated everyone equal. For example you can give them a bonus for 10% of their wager; this makes a huge difference in people with different wagers but they all feel like they have being treated equal and got the same 10%.
On the other hand you should announce what you are about to do. Give them a letter and by them we mean to every single one of them. you can use written letters, Emails and any other form of official documentation for Award based payment for your whole team. This approach is specially useful in larger enterprises and you can get even better results from Award based payment for larger companies.
Progress in time
Don’t start this approach right of the bat because implementing it needs some experience. Try to start on small scale and learn and rectify problems on the way to get the formula right. If I want to be honest then I have to say that there is no unified formula for Award based payment approach. you have to analyze the business financially, analyze your team based on human aspects and then go for your own formula.
So long story short, don’t expect things to happen too fast because it is not like magic and you can not get the result you may expect in a short amount of time. So be patient, continue to learn, do not get discouraged by some random results at the beginning and move forward.
So these were only some of the things you should know about Award based payment, but there are a lot more on this topic that we can’t cover here in this article and if you need more of the same then let me know and I will put it in my plans to give you more tips and tricks on how to perform this approach and if you have anything else to say about this article or you have any other suggestion or special article that you might need then share it with us and we will be happy to get back to you.