Can money buy happiness? Apparently not, but it can buy a whole heap of other stuff that might just lead to a happy life.
Salaries are becoming less important when professionals are looking for career fulfilment. With the tech industry suffering from a talent gap, appealing to the best talent doesn’t just mean offering a decent pay packet.
However, money is naturally still important when considering whether or not to take a job, as well as deciding whether or not to stay in a job.
We’ve previously looked at the dangers of being slowly left to dwindle in your current role, with no stimulation or motivation to excel or challenge yourself, as a result of being overpaid.
While most people may not think being overpaid is a bad thing, being priced so far out of the market that you can’t move jobs without taking a serious drop can make you feel trapped and disengaged, which is bad for you and your employer.
However, another side of the overpaid coin has been revealed by Google earlier this month.
No incentive to stay
According to a recent Bloomberg report, early staffers of Google’s car project were given supersized payouts in line with the value of the project.
However, these figures skyrocketed so high that by late 2015, the workers didn’t even need job security anymore.
While some employees might have been able to retire on the money they were earning from the project, others allegedly had their sights set on their own goals.
According to Bloomberg, people familiar with the situation said employees were given so much money that it was no longer a strong enough incentive to stay with the project, with some employees wanting to leave to start their own autonomous vehicle companies.
While this payment scheme might seem to have backfired in spectacular fashion on Google – which is allegedly haemorrhaging staff on this autonomous vehicle project – the system has some merit.
Google started the system in 2010 in a bid to tie employees’ fortunes to the performance of the project as opposed to external – and in many ways, irrelevant – factors such as company advertising.
Indeed, the ‘pay-for-performance’ model can work in the right setting, as employee interest in the outcome of their project could encourage more productivity and engagement.
This model needs to be set out properly, with clearly marked, achievable goals. Those goals need to have trickled down from the very top goal of the organisation, whether that is more brand awareness, higher revenue or a global reach.
However, a performance-based pay model can also be seriously problematic, not least demonstrated by Bloomberg’s report on Google’s talent exodus.
But even on a smaller scale, when employees are offered pay incentives tied directly to their performance, this model doesn’t always give the results it should.
Career analyst Dan Pink has spoken on numerous occasions on why financial incentives don’t effectively motivate staff.
In his TED talk about motivation, Pink said that in an experiment showing the effectiveness of financial incentives, rewards were proven to dull thinking and block creativity.
Pink discussed how business is built around carrots and sticks. “That’s actually fine for many kinds of 20th century tasks,” he said, “but for 21st century tasks, that mechanistic, ‘reward-and-punishment’ approach doesn’t work … and often does harm.”
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