The 3 B’s of Reward – The Boardroom, the Bar and, er, the Brothel

I was astonished to read a report by BBC News Europe that revealed the story of how a subsidiary of re-insurer Munich Re organised an event in a brothel to reward its high performing executives. About 100 guests attended alongside 20 escorts who would fulfill any requests. A business newspaper reported that the escorts wore colour-coded arm-bands to signify their availability, and, in true German efficiency, the women had their arms stamped after each service rendered. For the full story see BBC NEWS.

This salacious story raises the vital question of how to design an effective HR Reward and Recognition strategy. So lets take a quick tour of some of the major motivational theories, with lessons for Munich Re. These are taken from my new book “Punk Rock HR – A no bullshit guide to hiring, inspiring and firing staff”

Abraham Maslow pointed out that we have a hierarchy of needs ranging from basic instincts to realising one’s true potential. Reward and recognition strategies should therefore take account of ‘where people are ‘at’, rather than attempting to apply a ‘one size fits all’ approach. On this model alone Munich Re could have profited from my guidance. High performers have probably satisfied most of their lower order material needs and would be more likely to be looking for what Maslow called ‘self actualisation’, or ‘finding oneself’. The provision of instant gratification at Munich Re’s subsidiary may have served only to emphasise the gap between material rewards and these higher level spiritual gains.

“Money don’t satisfy but it sure ’nuff pay for the search” – wise words from Prince, based on the wiser research of Frederick Herzberg from his theory of ‘satisfiers’ and ‘dissatisfiers’. Basically, the things that produce long term satisfaction differ from those that demotivate people. Money is a dissatisfier in Herzberg terms – double people’s salary and they don’t necessarily work twice as hard for twice as long over the long term. Indeed, better pay may just produce a desire for more money. It’s highly probable that sex operates in the same way (although I’m sure any good academic would tell us that much more research is needed in this area). So, poor old Munich Re will simply have built a problem up for themselves long term….

I could bang on about Victor Vroom and expectancy theory, but I sense that my words may be too late for the HR Department at Munich Re. I guess the real question that most HR people ask about reward and recognition strategy is “Has it improved performance?” Even here, I suspect we may fall into the trap of ‘premature evaluation’, as most serious HR professionals know that it is not the instant response of a reward strategy that counts, but longer term actions and the impact of those actions on the business. Since Munich Re have suspended one of their 3 B’s of reward, it’s unlikely they will ever get to know if sexual healing helps reinsurance executives hit the high performance ceiling!