Archive for the ‘Personal Story’ Category

Outsourcing and Offshoring your SPM Implementation

July 6, 2008

I’m planning to write several articles related to sales performance management outsourcing and offshoring. Let me first define what outsourcing and offshoring means.

Outsourcing: This is when you subcontract the design and implementation of your compensation plans.
Offshoring: This is when you subcontract (typically parts of the implementation) to another country. India and China are well known IT offshoring destinations, but there are many others.

One of my first post on the blog was about in-house development versus outsourcing. Most SPM implementations I see follow one of these patterns:

Pattern 1:
An implementation partner is selected – this can be a vendor agnostic implementer, or the product vendor. As part of their submission, they propose the use of an offshore team to reduce the cost of their bid, or to be able to “go-live” more quickly.

Pattern 2:
An implementation partner is also selected. There are no upfront discussions about offshoring any work. The concept of an offshore team is brought up if the project falls behind schedule.

Upcoming Topics
The reality is that most vendors and consulting companies use offshore teams. I will write about the pros and cons of offshoring, the associated risks, the challenges it will add, the importance of communication strategies, and a few personal stories of managing offshore teams.

I will also write about which aspects of the implementation can be “offshored” more easily. The good news is that with an SPM implementation, once the design phase is completed, there are different way to “break-out” work in different components which are not on a critical-path to each other.

Finally I will answer several questions I have received on this topic. If you have any questions, please don’t hesitate to send them to me.

For Love or Money: Social vs Monetary Reward

May 26, 2008

Social Status and cash activate the same reward centre in the brain. That’s what two papers in the latest Neuron journal (Volume 58, Issue 2) are saying. I’m always very interested by cognitive research attempting to explain how certain activities can affect human behavior.

The article “Know Your Place: Neural Processing of Social Hierarchy in Humans” by Dr. Caroline Zink and colleagues explains how information about social status activated the same brain regions.

The second article “Processing of Social and Monetary Rewards in the Human Striatum” by Dr. Norihiro Sadato supports how reputation affects people in the same way as money does.

A subscription is required to read those articles, but they were summarized in ABC Science article “Praise or Cash? Your brain doesn’t care“.

Personal Story:

These studies support my own view on the topic. Last month I discussed the impact of the size of a money bonus on performance. It would be very interesting to see a similar experiment where some a group receive a lot of encouragement and the other group receives no praise at all, to compare their performance.

One of my previous employers, as many employers do, offered an annual performance bonus. This bonus was a percentage of the annual salary, but every employee received a very similar bonus. Employees developed a sense of entitlement to this bonus, and always thought they had met all their performance objectives and deserved the full amount. I’m just giving this context to illustrate how the cash incentive most likely did not have a positive impact on performance.

The employer, aware of this problem, introduced a “praise” program, consisting of recognizing employees who had made a significant contribution. Managers were encouraged to simply give a “Thank You” card to exceptional employees. I have no idea how this program affected performance… But it’s impact on motivation was priceless.

Employees receiving these “praises” would shine for weeks. Common sense tells me that motivation can easily be correlated to performance. I can safely say that the thank you notes I received from colleagues I had helped during evenings and weekends really motivated me to keep working hard – there is nothing like feeling appreciated!

Another Story on Social Status

A few weeks ago I read an article about how job titles could be used to motivate employees, even if no pay increase is associated with the new title. I have a friend who had his job title changed from “Business Dev Manager” to “Manager, Entrepreneurship and Innovation Development”. He’s been jumping up and down since he got this “promotion”. His reasons for being so happy: the title is unique, distinguishes him from his peers, and sounds better from his perspective.