COMPENSATION AND REWARDS

Many people are motivated by money—at least for a period of time. But the motivational power of money often wears off as employees simply get used to their current level of compensation. Many studies have confirmed that as long as employees are paid competitively, money is not the main factor that leads to job selection or performance.

Growing businesses that struggle with cash flow issues and “making payroll,” will want to think creatively about how to provide monetary compensation and rewards to their management and staff. When Ewing Kauffman managed Marion Laboratories, he paid his managers, directors, and officers salaries slightly below what competitors were offering, but offered profit-sharing, paid generous bonuses for high performance, and added benefits when the company did well.