I happened to meet Sam who had just joined the marketing division of a large Info-tech company where I was a consultant. He had an MBA from one of India's leading management institutes and had worked for two years with an international consulting company. The latter had the enviable reputation of paying very handsome salaries. "Why did you leave? And why so soon?" I asked him.
He hesitated before giving me an answer—perhaps wondering why he should bare his innermost feelings to a relative stranger. However, Sam changed his mind over the next 20 minutes of casual conversation.
Sam explained to me how he had been selected on campus. He had been impressed with the consulting company's reputation and joined it with high hopes that this would be a truly 'learning experience'. He was posted in the 'compensation surveys' section. Sam found the first three surveys very interesting. By the fourth, he was beginning to feel bored by the repetitive and routine nature of his work. By the 10th survey, he was bored stiff. He had stopped learning. By the end of 18 months, he felt he was 'intellectually dead.' But he was paid very well and it was not easy getting a job with this kind of salary.
Sam was 26, single and, after a lot of thought, decided to take the plunge now rather than later! He had joined this new company and accepted a compensation that was 30% less than what he was earning earlier. He decided this was the time to garner knowledge and experience. The more he learnt and wider the range of knowledge he acquired, the more he would be worth in the long run. Short-term losses, real and notional, were acceptable in the interest of long-term concrete gains.
My wife went to the local branch of a nationalised bank. A day earlier, the banks were closed due to an all-India bank employee strike. The queues were long, with the unscheduled holiday added to the weekend. The clerk at the counter was only partly apologetic. "We were closed yesterday, and therefore, the crowds," he explained.
On reading the charter of demands, my wife saw that one of the demands was a ban on opening local private banks. "Why this, especially when private banks provide such good service?" My wife asked.
The bank staffer replied: "If we get those salaries, we too will provide better service."
While that can be contested, we were seriously thinking of changing our account to a private bank. Two private banks have open branches in our area. They provide good service and one of them is open on Sundays too. Will nationalised banks offer better service if their staff are paid the equivalent of private banks, or will it be a case of the die being cast and, therefore, no change being possible?
Once again, we have to ask the question: What comes first, the chicken or the egg?
In 1975, a nationalised bank started a branch in our suburb. The bank began with complete' customer orientation'. It had to garner business as a start-up operation, so the staff was very courteous. The branch manager went from house to house and office to office in the area, selling the 'extra service' provided by the new bank. The bank was open from 8am to 12 noon and again from 5pm to 8pm so that the Suburbanites could come back from work in the city and still have time to visit the bank or deal with their bank matters before they left for downtown. This bank set itself apart from all the others in the area. It slowly built up a big business and flourished.
And then it happened: Philip Kotler's dictum- "most successful companies forget the very lessons which made them successful" – came true.
The bank timings were changed to the standard 9.30am to 2pm. The employees came up with the excuse that this suburb had become unsafe after dark. Depositors who worked in downtown Mumbai had to take leave to attend to their personal bank work. The service deteriorated and became the standard 'nationalised bank' variety. The bank started well and ended badly.
Many years ago, I entered an exclusive restaurantfor lunch with the legendary (late) Orville Freeman. When the maitre d' approached, Freeman slipped a note into his hand and quietly specified that he wanted a table at a window so we could have a good view and look down on the city. "Are you corrupting him, Orville?" I asked jocularly. "No," he insisted. "It is just a process of facilitation." It was giving a tip at the beginning to move things his way—rather than at the end, when it is too late, anyway!
The Handbook for the Complete Manager says money is the most overrated, inefficient, expensive and complicated motivator. To me, this does seem a rather sweeping statement.
Money is an overrated motivator because it is easy to confuse the necessity of an income with the effort that goes into earning it.
Most people do not put more time and effort into receiving more pay. At any point of time, they believe that they are paid just less than what they deserve and that if they do more than what they are already doing, they should get additional incentives.
Money is an inefficient motivator because wages and benefits cannot be deferred and employment costs just keep on rising.
Money is a complicated motivator because its effects depend on several other factors like 'whom you trying to motivate?' and 'how much money is involved?'
Yes, money is important up to a point. However, managers have to look beyond money at leadership and job design, which are the most important non-financial motivators. To make workers' jobs, more motivating, managers have to take risks and make sacrifices. That calls for a high degree of professionalism. Unfortunately, there is a great shortage of this commodity. As a refuge, we end up laying the blame on what may be adequate and fair compensation and labelling it as inadequate.
An afterthought -
Money Talks: Elon Musk now calls PMs around the world to give ideas and advice.
Not always: Warren Buffett asked his daughter to get a bank loan for US$42,000, which she needed when he had a US$350bn (billion) wallet!
(Walter Vieira is a Fellow of the Institute of Management Consultants of India - FIMC. He was a successful corporate executive for 14 years, capping his career as Head of marketing for a Pharma multinational, for India, Bangladesh, Sri Lanka- and then pioneered marketing consulting in India in 1975. As a consultant, he has worked across four continents. He was the first Asian elected Chairman of ICMCI, the world apex body of consultants in 45 countries, in 1997. He is the author of 16 books, a business columnist, international conference speaker and has been visiting professor in Marketing in the US, Europe, and Asia for over 40 years. He was awarded Lifetime Achievement Award for Consulting in 2005, and for Marketing in 2009. He now spends much of his time in NGO work - Consumer Education and Research Centre, IDOBRO, and some others.)