A Positive Reinforcement: Cash Incentives

November 28, 20161:52 pm555 views
A Positive Reinforcement: Cash Incentives
photo: hrmasia.com
Technology firm Philip Tang & Sons brims with creative energy, from its inquisitive employees eager to try on different hats, right down to its inventive HR policies.

Instead of the usual medical benefits, business software developer Philip Tang & Sons (PTS) gives out cold, hard cash to its employees.

The innovative policy, introduced in 2010, encourages a healthy lifestyle through positive reinforcement, by allowing the staff to retrieve their “unused” medical benefits in cash, says CEO Franklin Tang.

While companies traditionally buy health insurance policies to cover staff’s medical expenses, Tang’s initiative sees the technology company co-pay half of the employees’ medical bills, with any balance amount given to individual staff members as a cash incentive.

“I told my staff they’re very young and healthy, so I’ll give them this money and they should use it wisely,” Tang says.

“If you want to use it to buy insurance from a private provider, that’s your call. Or you may spend it on fitness classes, or on food.”

In contrast, when health insurance is provided, employees may be more tempted to claim for expenses in an attempt to ensure the policy is not “wasted”, he adds.

Leow Wei Wen, Art Director with the company, says the initiative is a “brilliant idea” which keeps staff from developing a habit of calling in sick for minor reasons.

In his 18 years of work experience at other firms, the 40-year-old has seen many colleagues malingering in order to avoid work, or actually believing they are unwell. He admits he once went through that phase, too.

“There’s nothing much the management can do,” Leow says.

“You simply think these people are always sickly, and coworkers may think they’re unreliable, but the management tends to keep quiet even if they suspect employees are abusing the system.”

When Leow joined PTS in November last year, he saw the scheme as a transparent and creative way of rewarding those who work hard. However, he concedes that employees who are seriously ill and actually need to take medical leave often will miss out on the cash incentive.

“But if they are a hardworking employee, I’m sure the company will duly reward them through performance bonuses or other means,” he says.

To date, the number of medical certificates submitted by PTS staff since the policy was enacted has remained low, with more than half of the 20-odd employees having no claims and collecting the maximum amount of cash each year.

Flexible talent management

Despite being more than three decades old, the Singapore-based company nonetheless has a dynamic, vibrant startup culture.

Yet, as a small firm that is not well-known among consumers, PTS has found it a challenge to attract talent.

To work around that, the company recruits all year round. Instead of waiting for positions to open up before starting to actively look for job candidates. PTS advertises on online job sites “very frequently”, even if there are no vacancies at present, Tang says.

“If there are good candidates, we’ll usually take them,” he says.

Afterwards, PTS essentially creates positions for these new hires, based on their areas of interest. The focus hence shifts from whether the person is a good fit for a specific role, to whether they are a good fit for the company as a whole, and for future roles they may take on.

Vacancies may also arise for new recruits if and when existing employees request to transfer to another department in order to try new things. Allowing lateral movement within the company is another of its flexible talent management strategies.

See: Simple Gestures Towards Employees Yields Big Rewards

Trying on new hats

A case in point is Leow, who formally joined the creative team to oversee the art direction, in-house marketing, and design of the company’s products.

That role made him a natural “bridge” between the PTS developers and the company’s clients. He has had to understand both clients’ business needs and also work with developers to build products that will satisfy those requirements.

Those frequent interactions have helped Leow ease into his additional role of being the first point of contact with clients, and gathering their requirements from them.

He has also learnt about the mindset and skills of the developers, such as how to present the information, and how to design the flow of data.

“In the past year I’ve definitely had an increase in knowledge, which lets me help with the systems’ back-end tasks and the programming,” Leow says. This saves on manpower and also results in a refined product that better suits the customer’s requirements, he adds.

Besides this, Leow has also been given opportunities to run projects on his own. He has been discussing with Tang in recent weeks about trying out the role of a project manager and how he can further improve.

“People are not machines,” Tang says. “Everyone is different, and two people with the same technical skills and educational background may still need to be managed differently.”

Leaders need to be able to groom and relate to each employee differently, Tang says. That is why during their first few months at the company, new hires at PTS are observed so that management can better understand where their inclinations and skillsets lie.

“Joining PTS is just a starting point. You may begin in an engineering role, but end up as a marketing or account manager,” Tang says.

Innovating beyond the job

This approach also helps spur more innovation and creativity, which is crucial for a technology company that develops its own proprietary products. Under PTS’s belt are products such as mobyVote, an e-polling platform used by listed companies at their annual general meetings, and Habitap, a smart home mobile application.

PTS employees are urged to be multi-disciplinary in their interests, pursuits and ideas. Innovations should not be restricted to their formal job scopes.

No matter which department they are in, anyone can offer suggestions and create innovations in any of the company’s three core business areas of design, sales, and programming.

During meetings, Tang also takes a step back to let staff run the show. They can talk freely without Tang overriding them.

In helping staff to take full responsibility and ownership of their ideas, PTS gives them all the resources they need to develop a prototype. They are also allowed to work on the project during office hours – unlike in some companies where employers pile regular work on the staff, on top of asking them to innovate, Tang says.

“Innovation comes at a cost, which the company must be prepared to shoulder,” he says.

“If you want to drive innovation, you must make sure to put your money where your mouth is.”

Before taking the helm at PTS in 2011, Tang used to believe innovation could be fostered by simply building a platform and gathering the staff occasionally to share their ideas.

“But that’s wrong, because you need a daily culture for innovation,” he says.

“It’s not just about holding an ‘Innovation Week’ and squeezing all the ideas out of the staff.

“It has to be in your blood.”

Grooming entrepreneurs

One unusual talent management strategy at Philip Tang & Sons hinges on CEO Franklin Tang’s willingness to helping talented employees become their own bosses.

For those with brimming with aspirations and aptitude, Tang is more than happy to support them, be it through finance or by offering experienced business advice.

“I always encourage my staff to become entrepreneurs, and offer to be their business partner if they want to leave the company,” he says.

While naysayers may believe this poses a threat to the company, Tang thinks otherwise.

Sooner or later, these enterprising employees will leave to run their own businesses, he says, so it is worthwhile to make the best of the relationship and learn from their entrepreneurial spirit while they are still working at the company.

“People have to leave eventually,” he says.

“If you’ve stuck it out at a company for 10 years and have nothing much to do, you’d better leave, unless the company is growing substantially.”

Clearly untaken by the idea of lifetime employment, Tang stresses the importance of bringing in new blood so as to get fresh ideas and perspectives.

“These days, five years would be a good time for employees to go learn something else.”

The article first appeared on HRM Asia.


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