Gini Dietrich

Paying Employees for Innovative Ideas: Why It Doesn’t Work

By: Gini Dietrich | August 30, 2010 | 
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Last week I had the pleasure of meeting Christopher Burgess in person. He is a senior security advisor at Cisco and we had a delightful debate about social media, networking online, and location-based technologies. A blog post with his advice on keeping yourself safe online is forthcoming, but today I want to talk about the discussion we had around paying employees for innovative ideas.

Though I don’t have all of the details, the gist of this program is that Cisco pays $500 to every employee who comes up with an idea, a few thousand for those whose ideas are good, and a few thousand more if a patent is sought and the company uses that idea. Cool idea, right? So, why then, other than the person who sends in several hundred ideas a week (known as internal spam), is no one taking part of this program?

While I rode my bike the next morning, I was thinking about that and about Daniel Pink’s philosophy in “Drive.” If you’ve not read the book, I highly recommend it, but if you want to get the Cliff’s Notes version, watch this 12 minute video clip, “The surprising truth about what motivates us” (though, I warn you, it may make you car sick – it did me).

Pink shows study after study about the things that do motivate us, as human beings, and money isn’t one of them. So I have this discussion with Christopher about the program at Cisco, I’ve read “Drive,” and, that very same week, it was a topic of conversation in my Vistage meeting. A lot of my fellow Vistage members believe people are, in fact, motivated by money and that it doesn’t matter what rewards you give employees, they won’t appreciate them unless they’re in the form of cash.

I vehemently disagree. Don’t get me wrong. I’m motivated by money. I love being able to buy wine and shoes. It’s pretty nice to be able to pay my bills without living paycheck to paycheck. But I didn’t take a paycheck for nearly a year during the recession (and I haven’t bought wine or shoes in two years), so it wasn’t money that was getting me up every morning to go to work and to grow a business through an economic meltdown. My employees didn’t receive raises or bonuses for more than a year so it wasn’t money getting them up to go to work every morning.

Put in a different light, if someone were to pay you double your salary, you’d likely take the job, right? Most of us would. But then let’s say you get to your job the first day and they walk you into an empty warehouse. They put a chair in the middle of the warehouse, take away your technology, and tell you it’s your job to sit there and do nothing. How long would you make it? I’m willing to bet not an entire week…despite the amount of money you are making.

I’m not so naive to think that monetary incentives don’t work, but I do think if you want your team to be innovative and create good ideas consistently, the rewards need to be in the form of something they wouldn’t necessarily buy themselves, but would love to have (i.e. gift cards to expensive restaurants or stores, a $300 flat iron, or even a $50 Starbucks card). I wonder what would happen if Cisco changed their program from monetary rewards to incentives that were personalized and meant something to the employee providing the idea?

What do you think?

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

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