How to put thanks in your pocket
Essay by Joel Spolsky (Joel Spolsky) about motivation, about cash bonuses and what to do with an employee, if his idea brought your company a million dollars. The original article in English can be read here .
Joel Spolsky is one of the creators of stackoverflow.com and the host of the blog joelonsoftware.com .
Two years ago, a student named Noah Weiss, who had a summer internship at our firm Fog Creek, shared a great business idea with me. He drew my attention to the fact that quite a lot of IT-related sites place paid vacancy announcements, and suggested that I do the same on the pages of my blog, Joel on Software . According to Noah, it will be easier to write a system for displaying such ads (“It's just another table in the database!”). And for other products, we already had ready modules for accepting bank cards and generating payments, so the project really looked simple.
')
But I hesitated. Before that, I did not place ads on my blog, and, frankly, did not plan to translate it into a commercial direction.
However, Noah insisted on his: “The guys from 37signals each month show 50 new vacancies on their website. For the placement of each job they charge $ 250 from the employer, and ... "
“Wait a minute, $ 250 for one announcement per month? I thought that job placement should cost, well, I do not know, four dollars? "
“So sure, 250 dollars. Moreover, posting a job is not the same as advertising. This is helping people, not a desire to cash in on them. ”
But by this time I stopped listening to him. Small gears spun in my head: $ 250 for one ad, 50 ads per month, 12 months a year ... Yes, with this money I can hire another programmer for the team! And I agreed. We immediately began adding vacancy displays to my site. Noah wrote the main code in two weeks, and for two more weeks I corrected minor issues and brought the system to mind. As a result, the whole project cost us about a month of work.
The price of $ 250 did not suit us, and we set a price tag of $ 350. Indeed, why not? I decided that we can bring ourselves into the premium segment in a very simple way - bringing the price up to the premium level. In the absence of additional information, the buyer most often judges the quality of the product at its price. So let our site become Lexus among sites with vacancies! (It is worth noting that a few months after the launch of our system, 37signals raised their price from $ 250 to $ 300.)
To date, this tiny project, for which we spent a month of work, brought us a million dollars - almost 100% of all our profits.
This staggering success immediately put us at a difficult question: how to reward an employee for giving us a million dollar idea? In principle, we can assume that we are not obliged to single out in a special way his achievement. The entire IT industry is moving forward with bright ideas, and programmers, generally speaking, get their wages precisely for inventing unexpected and effective solutions. So why pay twice?
But we decided not to be greedy and somehow thank Noah. But how? Buy him Xbox 360? Give him a cash prize? Give him a beautiful letter of appreciation, printed on thick paper? Give him a T-shirt with the words “My idea brought a million dollars to our company, and all I got in return was this stupid T-shirt”? A lot of options, but none seemed worthy to us.
What about the rest of our staff? They also do their job, and no worse than Noah. The fact that the idea of ​​one employee brought us a million does not mean that the rest of the team contributed less to our business. At the time Noah was implementing the ad placement system, our team was finishing a new, sixth version of our bugtracker Fogbugz, which doubled our revenue almost immediately after the release.
The story of Noah and his idea is a wonderful illustration of a question that I have been thinking about for a long time. This question is: how to reward employees according to their effectiveness in cases where efficiency is difficult to calculate directly? The concept of efficiency for knowledge workers generally looks rather strange, and no matter what metric you take for it, the chance of making a mistake will still be very high.
Psychologists identify two types of motivation: internal and external. Intrinsic motivation is the incentive that forces you to finish a business, regardless of whether you receive a reward or not. You thoroughly wash the microwave from the inside, although there is no special point in this: none of the guests will look there; this is the action of intrinsic motivation. Intrinsic motivation is a congenital trait of character: as a rule, a person tries to succeed in what he does. In turn, extrinsic motivation is an incentive to do something, knowing that a reward is due for the successful completion of the work. Traditionally, it is believed that external motivation is weaker than internal.
Nevertheless, psychologists believe that in some conditions, external motivation can still suppress the internal one. The fact that you reward your employees for a job well done teaches them to think that they only do their own thing for money. If a premium is not expected, then there is no incentive to work well either: the internal setting “do your job well” is replaced by the realization that the quality of the work will not be evaluated materially.
In addition, as soon as you start celebrating the good performance of your employees with bonuses, they immediately begin to compare themselves with their colleagues: why did I get less than him? And such questions are completely legitimate. How do you determine what is more valuable in terms of money: a bug that David fixed on Tuesday, or a feature that Ted implemented on Wednesday? If we had a workshop for sewing men's shorts, then everything would be much simpler: David today made five shorts, and Ted - seven; so Ted will get 40% more money.
But in our industry, things are not so simple: performance evaluation is always subjective, and you often have to set marks with which employees may not agree. Remember that people tend to rate themselves a little above their true level. Those who work for the solid four, are sure that they work for five plus. Those who work for the weak top three are sure that they work at least four with a minus. (By the way, some of those who really work for the top five are sure that they do not even make it up to the top three. This is often the case with perfectionists and just depressed individuals, but such cases are rather an exception to the general rule).
In fact, even if you come up with a magical way to accurately measure employee performance in quantitative terms and give them bonuses corresponding to measured performance, employees will still be unhappy: either because they value themselves higher or out of - because David still gets more.
On the example of the several companies in which I worked, I was repeatedly convinced that attempts by superiors to reward employees in proportion to their effectiveness lead to misunderstanding and mutual resentment in the team. When I worked at Microsoft, my colleague was very poorly rated by the managers on the results of the quarterly performance review. Moreover, this assessment was absolutely unfair: the managers rated him for the five percent of his work, which they saw directly, and 95% of his efforts to build good relations with clients remained unnoticed by the management. An unfair assessment so offended him that he was ready to leave the company, but still he restrained himself - and did not lose. He now leads the development of a product so widely used that you (personally you) will almost certainly use it every day.
But back to our little nugget Noah and his million dollar idea. We decided not to tempt fate and not to offer him a cash bonus. Instead, we offered him ten thousand shares of our company Fog Creek, but with the condition that he can get them for full use only if he decides to stay with us after the end of the internship. Fog Creek is not a public company, its shares are not traded on the exchange, and their actual value is quite difficult to assess. But in any case, this stake was worth a substantial amount of money. This decision was not ideal, but everyone agreed that there was a certain meaning in it.
Noah was flattered by this gift, and we hoped that it would encourage him to continue working in our company, but ... he decided not to stay with us. Google made him a more interesting offer. By the way, here is another disadvantage of proportional premiums: a rich competitor can simply answer a larger amount to any, even a rather serious amount of money that you pay to an employee, and take a person to yourself.
Noah, thank you for the summer you spent with us. If you suddenly change your mind - your workplace is waiting for you.
Joel Spolsky is one of the creators of stackoverflow.com and the host of the blog joelonsoftware.com .
Two years ago, a student named Noah Weiss, who had a summer internship at our firm Fog Creek, shared a great business idea with me. He drew my attention to the fact that quite a lot of IT-related sites place paid vacancy announcements, and suggested that I do the same on the pages of my blog, Joel on Software . According to Noah, it will be easier to write a system for displaying such ads (“It's just another table in the database!”). And for other products, we already had ready modules for accepting bank cards and generating payments, so the project really looked simple.
')
But I hesitated. Before that, I did not place ads on my blog, and, frankly, did not plan to translate it into a commercial direction.
However, Noah insisted on his: “The guys from 37signals each month show 50 new vacancies on their website. For the placement of each job they charge $ 250 from the employer, and ... "
“Wait a minute, $ 250 for one announcement per month? I thought that job placement should cost, well, I do not know, four dollars? "
“So sure, 250 dollars. Moreover, posting a job is not the same as advertising. This is helping people, not a desire to cash in on them. ”
But by this time I stopped listening to him. Small gears spun in my head: $ 250 for one ad, 50 ads per month, 12 months a year ... Yes, with this money I can hire another programmer for the team! And I agreed. We immediately began adding vacancy displays to my site. Noah wrote the main code in two weeks, and for two more weeks I corrected minor issues and brought the system to mind. As a result, the whole project cost us about a month of work.
The price of $ 250 did not suit us, and we set a price tag of $ 350. Indeed, why not? I decided that we can bring ourselves into the premium segment in a very simple way - bringing the price up to the premium level. In the absence of additional information, the buyer most often judges the quality of the product at its price. So let our site become Lexus among sites with vacancies! (It is worth noting that a few months after the launch of our system, 37signals raised their price from $ 250 to $ 300.)
To date, this tiny project, for which we spent a month of work, brought us a million dollars - almost 100% of all our profits.
This staggering success immediately put us at a difficult question: how to reward an employee for giving us a million dollar idea? In principle, we can assume that we are not obliged to single out in a special way his achievement. The entire IT industry is moving forward with bright ideas, and programmers, generally speaking, get their wages precisely for inventing unexpected and effective solutions. So why pay twice?
But we decided not to be greedy and somehow thank Noah. But how? Buy him Xbox 360? Give him a cash prize? Give him a beautiful letter of appreciation, printed on thick paper? Give him a T-shirt with the words “My idea brought a million dollars to our company, and all I got in return was this stupid T-shirt”? A lot of options, but none seemed worthy to us.
What about the rest of our staff? They also do their job, and no worse than Noah. The fact that the idea of ​​one employee brought us a million does not mean that the rest of the team contributed less to our business. At the time Noah was implementing the ad placement system, our team was finishing a new, sixth version of our bugtracker Fogbugz, which doubled our revenue almost immediately after the release.
The story of Noah and his idea is a wonderful illustration of a question that I have been thinking about for a long time. This question is: how to reward employees according to their effectiveness in cases where efficiency is difficult to calculate directly? The concept of efficiency for knowledge workers generally looks rather strange, and no matter what metric you take for it, the chance of making a mistake will still be very high.
Psychologists identify two types of motivation: internal and external. Intrinsic motivation is the incentive that forces you to finish a business, regardless of whether you receive a reward or not. You thoroughly wash the microwave from the inside, although there is no special point in this: none of the guests will look there; this is the action of intrinsic motivation. Intrinsic motivation is a congenital trait of character: as a rule, a person tries to succeed in what he does. In turn, extrinsic motivation is an incentive to do something, knowing that a reward is due for the successful completion of the work. Traditionally, it is believed that external motivation is weaker than internal.
Nevertheless, psychologists believe that in some conditions, external motivation can still suppress the internal one. The fact that you reward your employees for a job well done teaches them to think that they only do their own thing for money. If a premium is not expected, then there is no incentive to work well either: the internal setting “do your job well” is replaced by the realization that the quality of the work will not be evaluated materially.
In addition, as soon as you start celebrating the good performance of your employees with bonuses, they immediately begin to compare themselves with their colleagues: why did I get less than him? And such questions are completely legitimate. How do you determine what is more valuable in terms of money: a bug that David fixed on Tuesday, or a feature that Ted implemented on Wednesday? If we had a workshop for sewing men's shorts, then everything would be much simpler: David today made five shorts, and Ted - seven; so Ted will get 40% more money.
But in our industry, things are not so simple: performance evaluation is always subjective, and you often have to set marks with which employees may not agree. Remember that people tend to rate themselves a little above their true level. Those who work for the solid four, are sure that they work for five plus. Those who work for the weak top three are sure that they work at least four with a minus. (By the way, some of those who really work for the top five are sure that they do not even make it up to the top three. This is often the case with perfectionists and just depressed individuals, but such cases are rather an exception to the general rule).
In fact, even if you come up with a magical way to accurately measure employee performance in quantitative terms and give them bonuses corresponding to measured performance, employees will still be unhappy: either because they value themselves higher or out of - because David still gets more.
On the example of the several companies in which I worked, I was repeatedly convinced that attempts by superiors to reward employees in proportion to their effectiveness lead to misunderstanding and mutual resentment in the team. When I worked at Microsoft, my colleague was very poorly rated by the managers on the results of the quarterly performance review. Moreover, this assessment was absolutely unfair: the managers rated him for the five percent of his work, which they saw directly, and 95% of his efforts to build good relations with clients remained unnoticed by the management. An unfair assessment so offended him that he was ready to leave the company, but still he restrained himself - and did not lose. He now leads the development of a product so widely used that you (personally you) will almost certainly use it every day.
But back to our little nugget Noah and his million dollar idea. We decided not to tempt fate and not to offer him a cash bonus. Instead, we offered him ten thousand shares of our company Fog Creek, but with the condition that he can get them for full use only if he decides to stay with us after the end of the internship. Fog Creek is not a public company, its shares are not traded on the exchange, and their actual value is quite difficult to assess. But in any case, this stake was worth a substantial amount of money. This decision was not ideal, but everyone agreed that there was a certain meaning in it.
Noah was flattered by this gift, and we hoped that it would encourage him to continue working in our company, but ... he decided not to stay with us. Google made him a more interesting offer. By the way, here is another disadvantage of proportional premiums: a rich competitor can simply answer a larger amount to any, even a rather serious amount of money that you pay to an employee, and take a person to yourself.
Noah, thank you for the summer you spent with us. If you suddenly change your mind - your workplace is waiting for you.
Source: https://habr.com/ru/post/285478/
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