By Derek Irvine
I came across an interview with Tony Hsieh the other day, as I wrote recently in this post on Compensation Cafe, where he was describing the experiment of holocracy at Zappos and what the implications were for HR practices. One interesting comment stood out when he described his thinking on how compensation was being transformed.
In the interview, he describes “badging” in which “individuals could earn various ‘superpowers’ or badges which would represent the potential they bring to the organization and upon which their compensation would be based.”
That sounds pretty cutting edge! But if we reframe what this process really represents, perhaps the idea is less radical and the practice more accessible than one might think:
It may very well be less of an imposing idea when we think of it as social recognition, which provides many of the benefits of a self-managed workforce without the full risk of a holocratic structure.
Social recognition among peers empowers employees to catch the “superpowers” or instances of high performance and contribution of their coworkers.
Collections of these moments over time demonstrate an employee’s potential in living up to core values, and the breadth of contributions that employee can make across the organization. Because peer-based social recognition follows contributions and performance instead of roles, it is well suited to this notion of encouraging an entrepreneurial and engaged workforce.
You can read the entire post here, but in essence, social recognition offers companies a way to transform their compensation budgets and practices to more effective means, with the end result of a higher performing and more future-proof workforce.
What is your take on how compensation is or should be transforming?