It’s not about the money. If you haven’t seen Dan Pink on the surprising truth about what motivates us then you must watch this now. In fact, you know what, just watch it again anyway.
Also, we’re much more motivated by short term rewards vs long term rewards, something called ‘hyperbolic discount’. We discount the future reward, and over value the short term one. It’s why we don’t got to the gym.
It’s also a key reason that Agile as a development approach can be very motivating: a weekly cycle, the thrill of showing off your work to your peers every iteration at your demo or showcase is a reward you can look forward to getting soon and regularly. Teams find this success addictive and motivating. I think this is also why a regular team lunch, or knocking off early on a Friday for a few drinks, is a good motivator and reward for a team.
So let’s imagine you work for BigCo and have to figure out the bonus structure for your Agile team(s), what should you consider ?
First make sure you’re paying everyone a fair salary for their role and make sure that there is good parity within the team. If you haven’t got this much right, then your environment will turn toxic with jealousy way before bonuses are even due. In the past it may have been considered quite rude, or not the done thing, to share your salary with your co-workers. Today, especially among Gen Y, it is almost a norm to discuss pay, bonuses, etc openly… or on Facebook at any rate.
My second instinct is to say it’s all for one, and one for all – Agile is about teams. If there has to be a reward or bonus, it should be applied evenly to the whole team – that’s the only thing that’s fair in a cross functional, team focused work method.
Finally, Agile teams are good at recognising individual performance; the weekly retrospective and the transparent team mode of working builds a culture where often teams will call out stellar performance by individuals. As a team lead or manager, watch for these clues and use your discretion to reward those individuals with pay rises or other incentives. If you are careful and have your finger on the pulse, this is a fair way to reward individuals who have gone above and beyond in a way that that other team members won’t resent. But, remember it’s probably not about the money – often the best reward for someone who has gone above and beyond is the chance to take more responsibility or autonomy, the chance to improve themselves and gain mastery or the chance to influence the direction of their team and work gaining a stronger sense of purpose.