Joel Spolsky recently posted his latest inc magazine article dealing with the topic of performance rewards. While I think he dropped the ball on the actual reward he offered, I feel he has good food for thought on the subject. Questions like:

How do you measure performance and contribution?
If you measure, how do you know you’re measuring enough pieces to get a proper view of the employee?
How do you reward contribution without stepping all over your other employees?
How do you reward such that a competitor can’t just match it and steal away the employee?
How do performance rewards influence the attitudes of the other employees?
Should you reward based on how their updated resume would look to someone else?
Do you want to run a socialist or capitalist company? (Ok, I’m stretching it there!)
I think Joel has a good approach when he talks about the intrinsic and extrinsic motivations. Money and peer recognition are cool, but ultimately geeks like me derive their motivation internally because we love what we do and want to do it well. Obviously, that is not for everyone or every company.

Why do I think Joel dropped the ball with his example? Because that intern walked away with absolutely zero reward from Joel; instead walking away with what amounts to a coupon for a store you may or may not want to shop at again. Granted, his real reward (especially as an intern) are the line items on his resume and knowing Joel was impressed. I’m also not a big fan of ‘stock’ in its various forms. I’m not a huge fan of only doing peer recognition (unless it winds up as a resume line item) because it really has little monetary value (the fundamental reason almost everyone works) and can become so unvalued in other ways over time and if mismanaged. And I can go both ways when it comes to performance-based rewards.

Obviously Joel does other little things beyond direct monetary compensation to make work enticing and fun for his programmers; making it a place they *want* to work. So maybe he doesn’t truly need to think too hard about monetary performance-based reward schemes and instead keep doing what he does. Maybe give Noah an extra gift of some sort, but don’t otherwise break the cooperative culture that he obviously values. Maybe the reward or lack of one should not be a reason his workforce remains present and motivated.

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