3 Innovative Compensation Ideas Ready for Prime Time

A few innovative companies implement compensation practices that others quickly dismiss as (at best) “good for them but it will never work for us” or (at worst) “crazy, impractical and unsustainable.” Both reactions are quite human and derive from a fear of the unknown, from worry over stepping away from “how we’ve always done it.”

And yet, these innovative practices change more than just the conversation. They change employee commitment to their colleagues, their customers, and their company.

Pay to Quit

Look at Zappos’ “I’ll pay you to quit” policy. After completing the 90-day new-hire training period, Zappos needs to know its newest employees are all-in. To make sure, they offer $4,000 to quit. Does it cause turnover? Of course. Does it ensure those who stay are not only committed to the job but also bought into Zappos and its overall mission? Emphatically, yes. And that’s why Amazon didn’t shy away from the policy upon acquiring Zappos. Indeed, Amazon doubled down, offering fulfillment center employees $2,000 in their first year to quit, increasing the offer $1,000 every year to a maximum of $5,000. This isn’t a “pay to quit” policy. This is culture insurance.

$70,000 Minimum Salary for All

compensation approach many dismiss as an unsustainable socialist experiment. I see it more as a classic example of what it means to truly consider the needs of the humans you employ. When an employee can worry less about meeting base needs, they can focus more on delivering the creativity, passion, and productivity needed for organizational success. I would argue this is the first step in closing the dramatic gap that’s grown between productivity and compensation since the 1970s.

Image Credit: Economic Policy Institute

Crowdsourced Pay

A third innovative compensation idea is to crowdsource pay – or at least a portion of it. Most people in an organization know who contributes when and how. Most know who the superstars are. Most would likely agree the superstars deserve higher pay. But what about the “Steady Eddies?” What about the vast majority of people who make up the mighty middle of the performance bell curve – those 80% of people who do good, steady work day-in and day-out, making it possible for the stars to shine? Who sees their good work on a regular basis?

Generally, peers are the best judge of the contributions and achievements of their colleagues. What if we put a portion of payroll into everyone’s hands to apportion to those they see doing great work in a system with oversight and governance? Investment doesn’t need to be extreme. Even 1% of payroll invested into a peer-to-peer social recognition program in this way empowers all employees to essentially “pay” their colleagues for great work by recognizing them for it in small increments throughout the year.

How are you changing the compensation conversation to drive greater commitment in your organization?

As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of “The Power of Thanks” and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

This post originally appeared on Compensation Cafe
Author: Derek Irvine