Dear Joseph,

One of the most important roles I have as a manager is to be sure my people are properly recognized for their contributions. I do that through verbal gratitude, annual reviews, monetary compensation, and at times, career advancement. I feel heartbroken these days because my hands are tied on the last two. I can only offer tiny salary increases and no advancement opportunities. How do I help my people know their work is valued and keep them motivated in this climate? And/or how do I get upper-management to be more generous?

Signed,
Lean Times

Dear Lean Times,

Your team is lucky to have you as a leader. I can sense the compassion and interest you have for them. Love is the foundation of good leadership. You’ve got that squarely in place.

With that said, many managers misapprehend their basic role. Many unconsciously adopt an agenda of team advocacy. They think their job is to fight for resources and garner rewards for their team. Proximity to their team engenders a sympathy with their people’s needs while distance from other constituencies breeds indifference to abstractions like budget discipline, shareholder returns, and the needs of other faceless managers or employees. Your job becomes fighting for “your” people.

I say this to explain my first point: the basic role of a manager is to advance the interests of the enterprise. This means there are times when your job is to stand tall and tell your team that meager bonuses are the right decision. When you advocate for bigger rewards for your people, it should be because, as you take an enterprise-wide view, you believe this is where those incremental resources should be placed. Companies suffer when managers squabble over capital investment decisions as though their own local needs are all that matter. The result is a budget that reflects politics more than purpose. Organizations thrive when managers offer their specialized team-level perspective in the service of enterprise-focused decisions.

Enough of the sermon. Understanding that your role is to do what’s right by the organization and your team—let me offer some questions you can reflect on as you influence your team’s motivation and ensure they are appropriately compensated.

1. Are you maximizing other motivations? Decades of research shows the most important work motivators are not financial. Don’t get me wrong—money matters. But it matters most when other motivators are missing. Three of the most profound are purpose, connection, and mastery. Are you creatively connecting your team to the larger human purpose of the enterprise? Are you investing in developing satisfying connections of trust and intimacy among team members? Do you support individual team members in creating motivating developmental experiences that give them a sense of increasing mastery? These are some of the basics of motivation.
2. Do you understand the business? Before you advocate for pay or promotions for your team, be sure you understand the larger scheme of the value your team adds to the enterprise, and the relative contribution your people make. Also, do you understand and sympathize with the larger economic realities your senior leaders are navigating? For example: Are you in a growing market? A shrinking market? If you are a government agency, are your budgets increasing or decreasing? Do you work in a growth area of your organization or a declining/legacy area? Your influence with upper management decreases when your motivations narrow. If it’s all about “your” people—expect resistance. If they believe you have a broader enterprise view, they will be far more open to your arguments.
3. Is compensation internally fair? Is it externally competitive? Your arguments will be more effective if they are more informed. The two strongest arguments for increases have to do with internal fairness (Are people who make similar contributions also making similar incomes?) and external competitiveness (Is your team’s pay lower than the market you’re recruiting from?). Notice I am NOT suggesting that everyone in similar jobs should be similarly paid. It’s about contribution not job description. You need to factor in not only what skill set someone is using but also how meaningfully it is contributing to the enterprise’s most important challenges.
4. Can you add more value? The only sustainable compensation principle for organizations is that compensation should follow contribution. It isn’t about tenure, title, rank, or classification. It’s about how important your contribution is to the critical problems the organization faces. You should not ask for more unless you believe your people are not being compensated commensurate with their contribution. And if you do, you need to find a way to persuasively demonstrate this gap. Otherwise, work the other direction: help your team see ways they can increase their contribution in order to bolster the case for increased compensation.
5. What are the natural consequences of the gap? If compensation is clearly out of whack, the best way to influence upward is to meaningfully illustrate the natural consequences of the current policy. Ask yourself:
   • What problems is the current pay gap creating? What evidence do I have of these problems?
   • If the pay gap persists, what problems do I believe will occur? What evidence do I have that they will actually occur?
   • Which of these problems would upper management care about most?
   • How can I present these problems in a potent way? For example, a hospital pharmacy manager who complained for years about underpaid employees finally got results when he showed the relationship between medication errors and staffing turnover.

Best wishes as you continue to care for your team in a way that honors your larger stewardship.

Warmly,
Joseph

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