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Jeter Signed
Who Needs Employee Incentives? Try the New York Yankees?
Picture a situation where an employee is paid millions of dollars to work up to eight months per year. Moreover, their job is actually to play a kid's game and to do so in front of thousands of (mostly) adoring fans. Conventional wisdom would say that's a situation where no additional incentive would be required for the employee to do their very best, day-in and day-out.
Actually, that could not be further from the truth.
Owners of professional sports franchises realized a long time ago that despite the income and trappings of being a pro athlete, it was still hard to keep their employees from becoming complacent and just going through the motions. The owner's solution – employee incentives and recognition. Let's take the contract recently signed by New York Yankee shortstop and Captain Derek Jeter for example.
Base Salary
- $51 million over three years
Incentives
– $4 million for winning MVP
– $2 million for finishing second through sixth in the MVP voting
– $1.5 million for a Silver Slugger Award (awarded to the best offensive player at each position)
– $500,000 for a Gold Glove award (awarded to the best defensive player at each position)
– $500,000 for League Championship Series MVP and World Series MVP
You could argue that if Jeter is making $51 million over three years he BETTER finish at least sixth in MVP voting; however that's not the way it works. See, pro athletes are just like the rest of us. Sometimes they need a little extra incentive to keep them motivated and performing at the highest possible level.
Obviously the Yankees have figured Jeter's base worth to be $17 million per year and that they will benefit by more than $2 million if his performance is enough to merit a top six consideration for the MVP award. Jeter is not alone. Although most of the headlines focus on the bottom-line figures pro athletes earn, the majority of pro sports contracts include very lucrative incentives. Other examples include:
Player
Team/Sport
Base Salary
Recognition/Incentive
Orlando Hudson
LA Dodgers/MLB
$3M
$10K per plate appearance for every one above 575
Julius Peppers
Chicago Bears/NFL
$83.9M over six years
Undisclosed portion of $8M incentive pool for:
- Making the Pro Bowl
- Winning the Defensive Player of the Year Award
- Getting an undisclosed number of sacks.
Tony Battie
New Jersey Nets/NBA
$6.06M
$100K for playing in 50 games and averaging 8 rebounds
$100K for playing in 50 games and averaging 5 free throw attempts per game
$100K for being active for 50 games and having his team reach the second round of the playoffs
The list goes on and on. In the business world, where it may be difficult to implement cash based employee incentive programs, the employee incentives may be Service Awards or points based incentive programs. As a matter of fact, these sometimes are more effective than cash based employee incentives. Once again, professional athletes are a prime example. They, like all employees, appreciate being recognized for their achievements – especially if they are awarded with something to memorialize the achievement. This recognition can range from a small trinket to an all-expense paid vacation with their family. Consider this:
- Why do you think the NFL All Star Game (the Pro Bowl) is in Hawaii? – Players have long said that one of the big draws of being named to the Pro Bowl is not just the pride of recognition (which goes a long way in and of itself), but also the chance to vacation with their family in Hawaii. As perennial All-Pro Linebacker Ray Lewis put it, "…you don't want to go to the Pro Bowl and do what you regularly do. You want to come over and do something different. You want to tour the islands and bring the kids over here to see something different." This is exactly why incentive travel rewards are so popular as employee rewards programs.
It makes perfect sense. What better way than a trip to Hawaii, to show your family all of the sacrifice they made during the season was worth it!
- It doesn't even have to be as expensive as a trip to Hawaii - even portable music devices and recliners do the trick. If you ever get a chance to hear Joe Gibbs' motivational speech on incentivizing employees, I recommend you take advantage. It is a very enlightening perspective into human nature. During his speech he talks about his days as an NFL head coach and how amazed he was that millionaire players would knock themselves out for relatively inexpensive items such as Sony handheld recorders or privileges like the ability to watch game film from a Lazy Boy recliner. Gibbs discovered this during his first stint as Washington Redskins head coach when he started offering little employee rewards for hard work in practice.
The bottom line is the next time you think your employees need to "just do their job because they are getting a paycheck", remember even millionaires who are "living the dream" need a little incentive to bring them out of the doldrums we all go through. That incentive can be an extra bit of cash, a company sponsored trip, or an MP3 player. Chances are whatever type of employee recognition you ultimately offer; it will end up being an investment that returns an impressive ROI.
LoyalNation will help you design a custom employee rewards and recognition program that delivers a grand slam of motivation, improved performance, happy workers, and a top-notch ROI. That's like hitting a home run out of the park every time!
About the Author
Danny Abney is Chief Technology Officer and leads the Account Management team at LoyalNation.
Danny's most recent positions prior to LoyalNation, were as Director of US Delivery and Support for Rockall Technologies – Dublin, Ireland based global leader in collateral management software, and the Senior IT Director/Relationship Manager for HSBC North American Mortgage.
Danny has over 17 years experience in software development in the financial services industry, working with organizations such as Wachovia, HSBC, US Bank and M&T Bank. He has a track record for establishing solid relationships between technology and business and for forging business-focused teams from the ground up. These teams have been recognized for implementing quick to market enterprise software solutions with a balance of quality and speed that have a direct impact on the bottom line. While at HSBC, Danny's teams implemented technology infrastructure that enabled the Decision One subsidiary to expand loan volume by over 4x, while increasing headcount by less than 2x.
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