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Avoiding the "Provider Trap": Don't Let Rewards Discourage Employees from Thinking Like Businesspeople

Cathy Ivancic

December 1998

Employees who own a piece of the company are supposed to begin to act more like business people, right? One might expect employee owners to focus more on performance and adjust their behavior to support a long-term vision of success. That is one of the key benefits of shared ownership. But frequently employee owners continue behaving like "hired hands" even though they are co-owners.

Hired-hand behavior is easy to identify. Hired hands are not partners in success they expect someone else to be responsible for it. Hired hands are not problem solvers; they are order takers. They are quick to blame another department, supplier, or even the customer for problems. Hired hands have a tremendous amount of energy to focus on what the "company" ought to do and very little energy available to change the parts of the business they control. Hired hands may be "good employees" who do what they are told but probably only when the boss is watching.

If hired-hand behavior has been difficult to eradicate at your company, maybe it is worth considering how much you are adding to the problem. It may be time to consider whether your own behavior and attitudes are actually encouraging people to think like hired hands. You may be falling into the traps that make it easy for others to think like a hired hand. Leaders -- all the way from company president to front line team leader -- unwittingly fall into these traps when trying to build business people. In this article, I will outline just one of these traps: The "Provider Trap."

Providing Rewards Can Make People Think Like Hired Hands

Have you ever found yourself wondering, "Why don't people appreciate all that I have done for them?" If you're the one who dishes out the "goodies" in your company, division, or department, you may feel your rewards are encouraging improved performance and improving morale. After all, you're providing positive reinforcement for good behavior, and if you're a good leader you have taken the time to carefully explain why you were able to make the rewards possible. Why don't employees listen or care? Why doesn't this information change their behavior?

It is particularly frustrating to see apathetic "hired hand" behavior if you worked hard to make the annual bonus possible, got your department earning gainsharing, gave employees an extra holiday, saved their jobs and you're working like crazy to improve stock value.

Consider another view of the situation: it may be your actions that have laid this trap. As long as leaders believe that it is leaders who make rewards happen, that's what others will believe too.

People who think like hired hands undervalue their own contribution to earning rewards. In their minds, they are neither responsible nor capable of effecting business performance. When you dish out rewards as the "great provider" -- whether it be in an annual performance raises, the bonus, or the annual statement on stock value -- you support their suspicion that pleasing you is the way to be rewarded in your company. It may feel good to be "Santa Claus" and dish out the goodies but this may also be a root cause of why people are not taking responsibility for performance. Employees believe that you are creating and handing out rewards.

Getting Out of the "Provider Trap"

Once you recognize that you have become "the provider" you need to take clear steps to dig out of the trap so that you can begin to be "the coach" or "the teacher." Below are the steps to make this happen.

Check your own perceptions. Where do rewards really come from? The first step out of this trap is develop a genuine appreciation for how others in your company do contribute to business performance. You must really believe that employees can help enerate rewards if you want them to take shared responsibility. You can't fake it. Park your own desire to be appreciated and practice attributing rewards to the things that generate those rewards your business. That is, find the drivers of business success. Is it customer satisfaction, improved efficiency, on-time delivery, unmatched customer service, innovation or some combination of these that drives success in your business?
Find another way to get appreciation. It may be that your own need to get appreciated that is getting in the way of teaching others about the business. Let's face it, being the provider might be one of the few high points in your work. Giving up this satisfying role may sap the last bit of joy left in your job. And that's not good for you or the business. Find another way to get the appreciation you deserve. The transition from thinking like a hired hand to thinking like a business person will take time. Initially, people will need to resist it and they will not appreciate it. You will need a way to pat yourself on the back when you see evidence of change. Believe it or not, resistance is a sign of early success. It is important to find a way to define success as a leader that does not involve looking to employees for immediate appreciation. The most effective leaders of "business people" set small objectives which measure the progress toward "business-like" behavior and they seek support from other leaders who are doing the same.
Stop handing out rewards if they are not earned. A person who acts like a hired hand assumes that leaders -- or mysterious market forces -- are controlling rewards even when the reward has been earned.. It is important that you are not the source of the reward and rewards are not created to make employees happy. Business people are winners when there is business performance not when they need or demand rewards. This may mean that you will have more success if you are no longer in the role of handing out and explaining group rewards. In addition, you may need to shock people out of their comfort zone by discontinuing rewards or entitlements that are not earned. If employees are not contributing to performance but they are getting rewards anyway, you are in effect deceiving the co-owners of the business and preventing them from being able to help themselves. This is a disservice to employees, to yourself, to shareholders, and to your customers.
Create rewards that are linked to the drivers of the business and talk about them. Employee-owned companies have a built-in shared reward that is tied to performance: company stock. It is important, however, to identify simple, routine, ways show people how they affect improved stock value. Creating shorter term rewards can illustrate how daily work can be a powerful tool for making this connection. Even low-cost rewards like pizza or doughnuts can be very rewarding when people know they are the "winners" who helped make it happen. Frequently, annual bonuses are tied to performance, but employees don't know it. If you track rewards more frequently -- or better yet, pay them more frequently -- you can show the relationship between the drivers of your business and rewards. For example, if on-time delivery is a key to your success, focus people on how on-time delivery made the reward possible. Create an excuse to talk about it, track it (weekly or monthly), and watch it.

It isn't the existence of the shared reward that causes people to act like business people or hired hands; it is the way we communicate about it. Closely examining the way you communicate about rewards may reveal whether you have fallen into the "Provider Trap." Adjusting the way you look at rewards and talk about them can make all the difference in their effectiveness.

Cathy Ivancic is a consultant and co-owner at Workplace Development Inc. Since 1985, she has helped more than 100 ESOP companies enhance ESOP communications and develop an ownership culture. She is active in national organizations that promote shared ownership and has served on the NCEO's board of directors and as an officer of the Ohio chapter of the ESOP Association.She can be reached at civancic@workplacedevelopment.com.

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