Negotiating Employee Rewards in Small Increments

by Bruce Tulgan4 Min Read

Today we live in a world in which relationships are governed by an increasingly short-term and transactional logic. That’s true for people of all ages. But Millennials have never known it any other way. Segmented as a market from birth and armed with credit cards, they have been taught to think of themselves as customers in virtually every sphere. Even in their roles as students, most Millennials think of themselves as buying and consuming the learning services sold by schools. Meanwhile, their parents have been negotiating “choices” with them since they first uttered “I want” as toddlers, trading short-term rewards for short-term desired behavior.

Plug into Millennials’ transactional mindset. Stop paying them and start buying their results.

By the time Millennials arrive at the workplace, short-term transactional thinking is second nature to them. They are still thinking like customers. Sometimes when I point this out to managers, they’ll say, “Yeah, well, they’re not paying us. We are paying them. So what currency do they bring to the transaction? They can do as they are told.” I agree with that 100 percent.

Of course, you want to get more work and better work out of every one of your Millennials. For their part, Millennials want to earn more of what they need and want. The best solution? Plug into Millennials’ transactional mindset. Stop paying them and start buying their results, one by one. The more you trade results for rewards, the more reliable their performance will be. The smaller the increments you buy in, the more effective it will be. “I had this manager who would always say to me: Do you want to make more money?’” a Millennial told me. “I’d always know she was going to get me back with, ‘Great, here’s what I need from you.’ She did that with everybody. She knew I needed the money and went out of her way to help me make more money, which was really great of her.”

The critical element when it comes to rewarding Millennials is letting them know that rewards are tied to concrete actions within their own direct control this might remind you of the old-fashioned pay scheme called piecework in which individuals are paid an agreed-on amount for each defined unit of work they produce. The tailor might be paid per stitch or per finished garment. The accountant might be paid per tax return prepared. The computer programmer might be paid per line of new code written. And so on. The key to your success will be defining those measurable pieces of work and setting a price per piece.

Perhaps, if given the choice, many Millennials would actually opt for a safe lifelong employment relationship with secure, long-term vesting rewards. The problem is that you won’t find any Millennials who actually believe that this is a real option in today’s world. To them, it sounds like an absurd claim on its face – largely because it is. Therefore, most Millennials are concerned about all the rewards they might be able to extract from their immediate bosses in the short term. However, Millennials are also acutely aware that the compensation systems and language of their employers almost always revolve around the traditional elements of compensation and benefits; pay scales or salary, health care plans, eligibility for 401k or pension plans, and the like. They often ask about traditional rewards because they are aware that you only know how to talk about traditional rewards – they figure at least the conversation will make sense to you. They also want you to think they care about the reward system you care so much about. Plus, they figure they might as well get everything they can out of that system, even as they are making their other more idiosyncratic requests.

The critical element when it comes to rewarding Millennials is letting them know that rewards are tied to concrete actions within their own direct control.

So, sure, they want more of everything. But the real performance drivers for Millennials are the short-term, special rewards you negotiate in exchange for their short-term above-and-beyond performance.

So when that Millennial knocks on your office door and asks if you have a minute to discuss his special need or want, you could roll your eyes and think about beating your head against the wall – or you could realize that this need or want might just be the key to driving this employee’s performance to a whole new level, or at least the key to getting more work out of him better and faster for the short term.

The best approach is to negotiate these special rewards in very small increments. You want to be able to say, “Okay. I’ll do that for you tomorrow if you do X for me today.” Work a particularly undesirable shift Work longer hours? Work with a difficult team? Do some heavy lifting? Clean up some unpleasant mess? Then deliver the reward in question as soon as you possibly can. Immediate rewards are much more effective with Millennials because they provide a greater sense of control land a higher level of reinforcement. Millennials are likely to remember the precise details and context of the performance and are therefore more likely to make the connection the next time the desire performance is called for. Plus, they won’t spend time wondering whether their performance has been noted and appreciated, and they will therefore be less likely to lose the momentum generated by their short-term success.

Most managers have more discretionary resources at their disposal than they realize. These are often resources that can be deployed as special short-term rewards. What extra funds are available to you that you might be able to use for special short-term bonuses? What can you do to improve work conditions in the short-term for your employees? How much latitude do you have to make special short-term accommodations in employees’ schedules or paid time off? How much control do you have over extra training opportunities? Can you offer exposure to decision-makers? How hard is it to have a written commendation added to an employee’s file? There are many extra rewards managers have in their control, and you need to use every resource at your disposal.

That does not mean that everything is open to negotiation. You should be rock solid on your basic standards and requirements. What is not negotiable? What is essential? What is not acceptable? That’s your starting point. From there, take control of the ongoing negotiation and help Millennials earn those special rewards they want so much. In the process, you’ll get so much more, and better, and faster work out of them, one day at a time.

Bruce Tulgan

@BruceTulgan | LinkedIn | Website | Email

Bruce Tulgan is an adviser to business leaders, best-selling author and keynote speaker and seminar leader. He is the founder and CEO of RainmakerThinking, Inc., a management research and training firm, as well as RainmakerThinking.Training, an online training company.

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