The Best Managers Now Rely on Short-Term Rewards

Traditional, long-term vesting rewards no longer drive employee performance.

Reviewed by Michelle Quirk

Key points

• Driving performance in today's workplace is often a daily, weekly, or monthly negotiation.
• Younger generations of workers are particularly attuned to transactional management styles.
• Managers often have more discretionary resources at their disposal than they realize.

We live in a world in which relationships are governed by an increasingly short-term and transactional logic. That’s true for people of all ages. But today’s young people have never known it any other way. Segmented as a market from birth, they have been taught to think of themselves as customers in virtually every sphere. Even in their roles as students, most people from younger generations think of themselves as buying and consuming the learning services sold by schools. Meanwhile, their parents have been negotiating choices with them since they were toddlers, trading short-term rewards for short-term desired behavior.

By the time they arrive in the workplace, short-term transactional thinking is second nature to them. They are still thinking like customers.

Of course, managers want to get better work out of everyone. For their part, young workers want to earn more of what they need and want. The best solution is to plug into their transactional mindset. The more you trade results for rewards, the more reliable their performance will be. The smaller the increments you buy in, the more effective it will be.

The critical element when it comes to rewarding young talent is letting them know that rewards are tied to concrete actions within their own direct control. The key to management success will be defining those measurable pieces of work and setting a price per piece.

Traditional Compensation Versus Short-Term Rewards

If given the choice, many young people would likely opt for a safe lifelong employment relationship with secure, long-term vesting rewards. The problem is that you won’t find many young people who actually believe that this is a real option in today’s world. Therefore, most young workers today are concerned about all the rewards they might be able to extract from their immediate boss in the short term.

They may ask about traditional rewards because they are aware that is the language employers are speaking. But the real performance drivers for most of your young employees are the short-term, special rewards you negotiate in exchange for their short-term, above-and-beyond performance.

Negotiating Rewards in Small Increments

So when a new young employee knocks on your office door and asks if you have a minute to discuss their special need or want, you could roll your eyes—or you could realize that this need or want might just be the key to driving this employee’s performance to a whole new level, or at least the key to getting better work out of them for the short term.

The best approach is to negotiate these special rewards in small increments. You want to be able to say, “OK. I’ll do that for you tomorrow if you do X for me today," such as ...:

• Working a particularly undesirable shift?
• Working longer hours?
• Working with a difficult team?
• Doing some heavy lifting?
• Working in some out-of-the-way location?
• Cleaning up some unpleasant mess?

Then, deliver the reward in question as soon as you possibly can.

Immediate rewards are much more effective because they provide a greater sense of control and a higher level of reinforcement. People are likely to remember the precise details and context of the performance and are therefore more likely to make the connection the next time the desired performance is called for. Plus, they won’t spend time wondering if their performance has been noted and appreciated, and they will therefore be less likely to lose the momentum generated by their short-term success.

Most managers have more discretionary resources at their disposal than they realize. These are often resources that can be deployed as special short-term rewards:

• What extra funds are available to you that you might be able to use for special short-term bonuses?
• What can you do to improve work conditions in the short term for your employees?
• How much latitude do you have to make special short-term accommodations in employees’ schedules or paid time off?
• How much control do you have over extra training opportunities?
• Can you offer exposure to decision-makers?
• How hard is it to have a written commendation added to an employee’s file?

There are many extra rewards managers have in their control, and you need to use every resource at your disposal.

That does not mean that everything is open to negotiation. You should be rock solid on your basic standards and requirements. What is not negotiable? What is essential? What is not acceptable? That’s your starting point. From there, take control of the ongoing negotiation and help your people earn the rewards they want.