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It makes technical people greedy – as a result, people won't waste their
time on ideas that can't be
commercialized ...
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 Monsanto
At Monsanto, when it started its
transition
from a chemical giant to a life sciences company, reward systems
have been redesigned to focus on growth and instill a sense of
ownership
in the corporation. Monsanto granted stock option to the 95% of
employees who previously didn't participate in a stock-option program. Economic Value Added (EVA) was adopted as the primary measure of
financial performance. Incentive plans are tied to EVA, and employees
eligible for management incentives have had a portion of their incentive
converted into option...
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Winning
Corporate Culture
Fidelity
Investments
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 his or her start date.
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IDEO's
6 Innovation Practice Tips
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Surprise To Win:
3 Strategies
GE
GE used to reward success in an unusual way. If an executive and his or
her team exceeded their objectives they were challenged, the next year, to
meet tougher goals with fewer resources and smaller budget. Those who
experienced this hard practical school have learned how to achieve more with
less.
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25 Lessons from
Jack Welch
Intel
At Intel, rewards are clearly linked to
performance. About half of pay is tied to company and/or divisional
performance, and more than 70% of employees have rights to purchase stock
options. The way Intel management sums this up is, The reward system
reinforces the company's high expectations of its employees to grow, learn,
→
innovate
and
→
lead
.
Dell
"At Dell, the vast majority of our employees
are owners as well, a result of employee stock purchase plans, stock option
grants, and a 401(k) plan in which we match employee contributions not with
cash but with company stock," says
Michael Dell, Founder of
Dell Inc.. in his
book Direct from Dell. "Stock ownership in the computer systems business is
nothing new. At Dell, though, it comes with another
commitment.
To be an
owner, you have to
think like one. The personal investment people feel when
they think and act like owners manifests itself in a true commitment to the
company. I'm surprised that most companies offering stock to their employees
have missed this critical point."
"We decided to reward employees around a matrix
of Return on Invested Capital (ROIC),
and growth; higher performance directly correlated to higher ROIC, which
came back in the form of higher compensation," says Michael Dell. "What was remarkable was that we took a concept
that was both powerful and sophisticated and translated it so that it could
be understood by every employee in the company. It wasn't something that
benefited only senior executives. Every person who works at Dell – from
engineers to product managers to our support teams –
started thinking about
→
what makes the business profitable and what she could
do to improve ROIC."...
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