What is your company doing to keep you?

First posted in May, 2014. Updated February, 2017.

On April 30th, 2014, I held an all-employee conference for our Arbtechers (employees) at 85 Tottenham Court Road, London.

The day was one of the regular opportunities for far-flung colleagues to meet up, share a beer or two, and for those of us with something to say (anyone, basically), to make presentations to the rest of the team about ideas they have had and to raise points for discussion. Among the many things discussed were, according to my iPhone notes app (where would I be without you?), getting ID cards made up (Craig); a workaround for the unpredictable nature of the cost of biological records data (Martin); new ways of looking at client site plans (Dave, Jon); new ways of collecting and processing BS5837 tree survey data (Alan, Matt); setting up an internal ‘Professional Standards Committee’ to feedback, consider and govern on important issues to the business and our clients (me), and, the subject of this post: employee incentives (me).

Rather than re-type my initial proposal and then highlight all the tweaks made to the system, I thought it’d be easier to simply copy and paste the internal memo entitled “Cheers, Mate” that went out today, confirming the basis for our bonus scheme and the reasons behind it.

Why make this information public?

Why not? I’m not ashamed of it. Quite the opposite. I’m proud of the culture we have at Arbtech and our decision to focus on putting employees first, before everything. I’m also a big fan of transparency, sharing ideas and business practices. (So if you like this, please share it!). I also hope that it will add to the strength of the message we try to communicate to those of you who seek a career with us. And ultimately, all of this is designed to align our actions, with our goals (chiefly, becoming the best place to work in arboriculture and ecology). In other words, if we want to continue to attract and retain the best talent; then we need to show people how their talent would be rewarded at Arbtech.

So here it is: “Cheers, Mate”

Memorandum
Subject: The ‘Cheers, Mate’ Bonus Scheme
14 May 2014

Arbtechers!

The culture at this company is probably the one thing I am most proud of. I am excited about it too. But not for the reason you might think. It excites me because our culture is the one thing in which I think we still have the most progress to make. Our best days are still ahead.

Why is culture so important?

I define culture, in a business context, as people operating in an environment of shared values. Some cultures are cutthroat and destructive (trading desks at investment banks) and others are inclusive and constructive (sports teams, democratic governments… at least in theory!).

My thesis is that unified around a compelling strategy, we succeed or lose as a team, and how we perform as a team, is unquestionably a function of our culture. Therefore, as you will (hopefully) recall, I set out at our London all-employee meeting in April my ambition to create more ways to incentivise and reward you as a team. Rewarding contributions to the team effort has got to be a worthwhile step in progressing and deepening our culture.

In practice, how does this work?

The flat management structure we have at Arbtech, with no seniority among colleagues below Board level, to my mind at least, means that it makes no sense for you to be rewarded based on my sometimes limited interaction with each of you individually, especially when I could delegate this responsibility to those much better informed; the rest of the team that rely on you.

Moreover, I dislike the traditional model of handing bonuses out periodically (quarterly, annually, etc) because of bias blind spots, a general lack of transparency, and the worst culprit: keeping score. History shows us over and over that the ‘do X and get Y’ system of awarding incentives, is rarely efficacious in the long-term.

As consultants that frequently rely on the work or at least the help of one another, you know doubt prize, as I do, flawless admin. And, when the occasion calls for it, someone digging you and company out of a hole (rarely are the two exclusive).

Pulling a late one–taking on an extra survey because your colleague’s child been sent home sick from school–just to make sure our client gets the speed and service they have paid for, is a classic example of this sort of everyday heroism that goes unrewarded at other companies. But not here. Here, we say “Cheers, mate.”

Why did the banker put his money in the freezer? To get cold, hard cash. You can laugh now.

I propose that each of you award cash bonuses to one another, absent of any supervision, for any amount you like, up to £100 at a time.

You have all been hired into Arbtech because you have demonstrated the three traits, that notably have precious little to do with your technical discipline, but are absolutely crucial to team success: integrity, intelligence and energy.

The system is, on paper, open to abuse. But people with high integrity don’t abuse. Awarding bonuses to one another lightly, or on the basis of a ‘you scratch my back’ devalues the system and highlights a lack of integrity in the persons concerned (and very quickly identifies them as a poor fit for the business).

In contrast, awarding the incentive on the basis of hard work undertaken to help the team rally around each other is to be actively encouraged. My hope is that this system promotes the values we share and encourages each of us to deepen our company culture by turning principles and tenets into action.

I want to give away company cash, how do I do it?

All you need to do is send me an e-mail with the subject “Cheers, Mate” stating the name of your colleague, the award you’d like to bestow them with and a brief explanation of why. That’s it. No questions asked. Thy will be done.

Rob

PS – this looks like it will be a record month for the company. Fantastic work guys. Keep it up!

Paying for performance is dead

Instead, we must pay for culture.

It’s a variation on a scheme implemented by an American company, but it goes a lot further (to the point where it’s not really similar at all).

They place a strict limit on the amount you can give (receive) each year, meaning once you have earned X bonuses, that’s your lot for the year. This hardly rewards people who go the extra mile in December if they maxed their bonus in July (and let’s be honest, someone who maxes a bonus by July is probably the kind of person you want to incentivise and reward).

The American version also fixes the amount you can gift at a pre-defined figure (I forget now, but it was quite high), meaning there’s no ‘spectrum of good things’ against which to scale a reward. You either did enough to get it all, or you didn’t do enough to get anything.

All or nothing is not how we want our people to think about their contributions to our team’s success, as it encourages and rewards doing enough, rather than doing your best.

What’s next?

I’ll be sure to update this at some point in the future, once the scheme has been used for a while. It’s summer so the ecology season will undoubtedly provide us with a few difficulties opportunities to field-test the system. I’ll probably do this around August, so check back then.

-Rob.

I hope you enjoyed reading this. I’d certainly love to hear your thoughts on how you think this might play out, whether it will be a roaring success or is doomed to fail. Have you done something similar? Whatever you think, let me know using the comments box below, or tweet at me. Finally, if you think someone else would like to read this, I really do encourage you to share it using whatever method you choose.

Update 1 (21st May, 2014):

I have had some amazing feedback about this via e-mail and personal messaging on e.g. LinkedIn. Here’s an example of how a good idea can spread… (Andrew Bartley is a Partner at solicitors Jolliffe & Co.)

 

Update 2 (17th February, 2017):

The scheme is still going strong. We have never, ever declined a request for a “Cheers Mate” bonus, which evidences the fact that people take it seriously. It is also widely cited among candidates we have interviewed over the last three years as a reason people have heard about the company in the first place, or having read about it on our web site, were attracted to us. This is fantastic news, as attracting and retaining talent is the primary reason we try to push the envelope with employee engagement.

We have made two modifications, recently, as follows:

First – company principal, Chris, came up with the idea in 2016 to allow employees the option to gift one another books (paid for by the company), in place of a small cheers mate (e.g. <£50). These don't have to be related to work, but they can be. For instance, if you know a colleague is interested in Allied naval strategy during WWI, you could buy them a nice addition to their existing library. Conversely, if a colleague has recently asked you for help with public speaking, or has an upcoming engagement, you could buy them something along those lines, etc. It seems my bias/enthusiasm--I am a voracious reader of books, so naturally, I loved the idea--was not ill-founded, since everyone else I have spoken to thought it was a great idea, too.

“One of the many tangible benefits of a career at Arbtech is the ‘Cheers Mate’ scheme, which we think is a fairly unique offering in the world of environmental consultancy. The facility provides for colleagues to recommend a reward for other colleagues who have “gone the extra mile” for them in the workplace. It differs from a Company bonus scheme because it is a peer to peer reward…and it is just a nice way to say thank you to someone in the workplace. Traditionally staff have made a cash recommendation to the management team but the scheme has recently been extended so that colleagues can recommend an appropriate book to each other as an encouragement of wider reading and “deep-thinking”. The scheme is very popular amongst our staff and regular sub-contractors, and is well utilised but never abused.”
– Chris Formaggia, 2017

Second – client service manager, Julia, suggested we extend the scheme to include subcontractors that go the extra mile. I like this idea too, and having put it into recent practice, it was very warmly received. We have many subcontractors, but probably 10 or so of them have been loyal to us for years (in one case, over a decade), and are always so accommodating and enthusiastic. Julia recommended that it would foster a better relationship if we did more than simply say “thanks” each time a subcontractor re schedules their life around our clients’ wishes. I agree wholeheartedly.

We don’t wait for an annual review to say “Thank you”. We say “Cheers, Mate” loud and often; every time one of us has pulled it out of the bag to assist a fellow colleague. It shouldn’t just be the privilege of management to reward staff, so we (all of us) nominate one another whenever it’s deserved. Any amount, up to £100 at a time, with no limit on the number of times this can be done.

Further, due to our ever-expanding business (and increased workload!), we have become more reliant on our “Super Subs”. These are our support system – our Go-To-Guys-and-Girls – whom we can call upon to deliver the same level of professionalism and unrivalled customer service as our full-time Arbtechers, when their calendars are full up!
– Julia Robinson, 2017

The “Cheers Mate” scheme is a way for ‘Arbtechers’ (the 20 or so of us that are permeant team members) to give each other a pat on the back for going the extra mile with tasks. As a close-knit team, we are always happy to help each other out, and a CM goes a long way to help us recognise that our special efforts have been appreciated by someone! It’s a great way to reward one another, and contributes to our unique and special culture. Recently, it has also extended to our reliable and hard working subcontractors (who not so surprisingly, also enjoy the scheme!!!)
– Amy Stanley, 2017

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