Vadim Kotelnikov    

Reward Systems

Increasing Performance and Creating Happier Employees


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Three Greatest Rewards of the Universe

By Peter Riggs

  1. To do the thing you enjoy doing

  2. Recognition in all its various forms

  3. Money only becomes a prime motivator if there is no sufficient of it coming in to meet one's immediate daily requirements

Two Rules of an Effective Reward System5

  1. Strategic Alignment: Carefully align your reward system with the values, vision and mission of your organization.

  2. Practicability: Reward behavior that is under employees' control.


The Silicon Valley's Approach to Gain Sharing

Five Beneficial Effects

  1. It evokes entrepreneurial spirit which in turn heightens energy and pushes creativity

  2. It forces people to look beyond technology to the value it creates for the customer

  3. It makes technical people better team players, because they realize that they cannot deliver customer value unless their efforts mesh with others

  4. It makes technical people greedy as a result, people won't waste their time on ideas that can't be commercialized

  5. It eliminates resentment, demotivation, and turnover that frequently occur when the technologist receives only a patent certificate, while corporate managers get wealthy from stock options

The GE Leadership Effectiveness Survey (LES)

  • Recognizes and rewards achievement. Creates positive / enjoyable work environment... More


 Discover more!

Effective Motivation

Incentive Motivation

Attitude Motivation

Strategic Motivation

Strategic Motivation System

Performance Management

Performance Measurement Systems

Employee Empowerment

Employee Satisfaction

Case Studies

Toyota Production System (TPS)

Canon Production System (CPS)


Why Reward Systems?

The only way employees will fulfill your dream is to share in the dream. Reward systems are the mechanisms that make this happen. "However, reward systems are much more than just bonus plans and stock options. While they often include both of these incentives, they can also include awards and other recognition, promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you."5

"You get more of the behavior you reward. You don't get what you hope for, ask for, wish for or beg for. You get what you reward." ~ Michael le Boeuf

You Get What You Reward

The greatest management principle is that the things that get rewarded get done. "You get more of the behavior you reward. You don't get what you hope for, wish for or beg for. You get what you reward."7

When your employees do hit the target and meet a stretch standard you set for them, reward them immediately. Never stall. By doing this, you help employees directly connect the reward with behavior and higher performance they've attained.4 "Fail to reward the right behavior and you will most likely get the wrong results."3

 Case in Point  Fidelity Investments

At Fidelity Investments commitment to Kaizen (a continuous improvement strategy) is reflected in its performance management and compensation systems... More

Stimulating Entrepreneurial Environment

Your reward structures providing "a high upside for the success, and at the same time a downside for the failures help to encourage managers to stimulate an entrepreneurial environment."5

Linking Pay with Performance

Great managers create heroes in each role and link pay with performance. "They create broad bands for pay within each role. They also create overlapping bands of pay to encourage people to assess their strengths before moving to the next rung on the ladder. This means that a great salesperson could earn much more than a new sales manager who is yet to demonstrate performance in his role."6

Rewarding Idea Generation

Recognition and rewards are fundamental elements of any successful Idea Management program. They perform a number of important roles. Most programs now provide a mix of corporate recognition, career advancement and trinket-style gifts... More

 Case in Point  IDEO

IDEO's compensation is very competitive. They have a profit-sharing bonus, which is based on company profitability as well as on a specific studio's profitability. IDEO Ventures offers additional reward opportunities. The company work on so much great stuff that succeeds in the marketplace that it  makes sense for them sometimes to invest in their clients. They could put money in if it's a startup or they could negotiate a royalty agreement with a more established company on that product. An employee of IDEO receives X number of points in any venture fund that opens after hiw or her start date.8


 Discover much more in the


Two Guidelines for Rewarding Innovative Behavior...

Effective Performance Measurement System: Key Features...

Manager's Diagnostic Toolkit...

Measure-Management Companies...

Evaluating Corporate Performance: New Metrics...

Two Questions You Should Ask Yourself...

Measuring Productivity...

Six Sigma Tells You...

Measuring Coach's Effectiveness...


360 Evaluation and Feedback...

Enterprise Performance Management (EPM)...

Process Thinking...

Systems Thinking...

 Case in Point  Intel Corp...

 Case in Point  GE...

 Case in Point  Dell Computer Corporation...

 Case in Point  Monsanto...

 Case in Point  IDEO...


Henry Ford advice

Make the best best quality of goods possible at the lowest cost possible, paying the highest wages possible.

Henry Ford

Ford Moror

Jack Welch advice business quotes

Provide rewards

for the soul and for the wallet.

Jack Welch


Mahatma Gandhi advice quotes

It is the quality of our work which will please God and not the quantity.

Mahatma Gandhi

Steve Jobs advice quotes

The journey is the reward

Steve Jobs





1. The Centerless Corporation, by Bruce A.Pasternack and Albert. J. Viscio

2. Driving Growth Through Innovation, Robert B. Tucker

3. Motivate to Win, Richard Denny

4. How To Motivate Every Employee, Anne Bruce

5. Leading on the Edge off Chaos, Emmet C. Murphy and Mark A. Murphy

6. Four Keys to Great Managers, The Gallup Organization

7. How To Motivate People, Michael le Boeuf

6. Recruiting Q&A: IDEO. Beth Strong

SYNERGISTIC ORGANIZATION (Ten3 Mini-course) - How To Build a Modern Winning Organization