What Could be Better than Working for a Tech Company with a Strong Sense of Social Mission?

by sharing more profits!

As the competition for top tech talent heats up, more and more businesses are beginning to look outside the box when it comes to employee motivation. According to data, the IT sector has the largest employee turnover of any sector, with 13% of workers quitting their employment on average each year due to rising demand and pay.

But are there any other incentives besides pay increases, performance bonuses, and equity?

Elon Musk, the CEO of Tesla, chose not to take a salary and instead received billions in stock options in 12 payments. Before he can be granted one of the stock options, the company must achieve specific performance benchmarks over a 10-year period. Initially, Musk's first stock options weren't granted until Tesla's market value exceeded $100 billion. After that, Musk will be eligible to receive a batch of stock option awards any time Tesla's market value increases by an additional $50 billion.

Following in the footsteps of Elon Musk, Axon CEO Rick Smith created his own staff reward plan. If you are unfamiliar with Axon, remember the stun gun (also known as a taser gun) used in American movies. Axon, a pioneer in the public safety sector, aims to "make the bullet obsolete" through fostering greater openness and confidence between law enforcement and the communities they serve.

A similarly motivating internal culture exists at the business. The Seattle-based team members of Axon were introduced to us last summer, and we were astounded by how driven, considerate, and ambitious they are.

Pay for performance's benefits

In 2018, CEO Rick Smith presented Axon's staff with a courageous proposal: an innovative retention strategy that would let the business "bet" their compensation on the business's expansion. One to five percent of Axon's staff members make more than $100,000 annually, and they can choose to bind their pay to the company's successes by only getting paid when Axon reaches specific performance benchmarks.

The plan contains 12 different levels of stock awards and can take up to ten years to complete. According to Rick Smith, the ROI is probably approximately 15 to 1. For example, if the company's performance meets all benchmarks, an employee who is willing to contribute his $10,000 annual income to the plan will receive $1.5 million worth of stock after ten years.

In a GeekWire interview, Axon CEO Rick Smith said that Elon Musk's incentive program at Tesla gave him the idea to forego a salary and only receive payment when the business achieves specific performance benchmarks.

What's more fulfilling than employees thinking about making the CEO richer, Smith asked, "If I hear people in business meetings saying, 'We've got to find out how to hit Rick's milestone,' that's right up my alley."

According to Smith, the program differs from earlier compensation and incentive schemes and encourages employees to participate in the company's growth strategy.

The Motivating Factor Behind Transformational Incentives

How effective are transformative incentive policies in practice? The provision of transformational incentives for businesses has deeper symbolic significance in addition to financial and technical considerations. It highlights a fundamental conviction that the work we are doing together is significant. It enlivens the team spirit within the company and lets your staff know that their efforts can contribute to the overall success of the enterprise.

In an age where most people (at least in the tech business) have adopted the Tour of Duty 2-year firm term, such a policy represents a significant mindset adjustment for your staff. Allow employees to understand that they are not only growing as individuals in the company, but also as a team or organization.

Should your business adopt the same policy?

Not all businesses should use transformative incentives. You should ask yourself these three questions:

1. Does your business have a clear sense of purpose?
2. Is your business a leader-driven one?
3. Do you have a strong following in the marketplace?

Transformational incentives may be the best option for you if the answer to any of these questions is yes.

For a small team, transformational incentives can have the same impact, even though they are typically more challenging to implement at the organizational level. If you are a team's manager or leader, you can considerably influence your teammates' motivation to collaborate to manage the team.

You can take the following actions:

Step 1: Set a clear, long-term team goal and work with your team to develop an action plan with milestones.

Step 2: Create a team incentive as a means of self-motivation for achieving specific objectives.

Step 3: Review team milestones from time to time. Review the factors that stand in the way of each goal ahead of time and remember to celebrate the small victories along the way that lead to bigger victories.

Step 3: Periodically review the team's accomplishments. Review the obstacles that each goal faces in advance, and don't forget to rejoice in the tiny successes that lead to bigger ones.

In the end, what your employees desire most from their positions is the ability to work hard and produce results. You can accomplish this goal by encouraging group rewards, which will encourage everyone to put forth their best effort for the success of the team.