Psychic Income

Driving Performance with more than dollars and cents

By Jeremy Miller

What drives sales people? Money right? Money is a major reason why many people enter the sales profession, but it is not the primary motivator for success in an organization. Psychic income is the answer. Psychic income is the least expensive and most rewarding form of compensation a company has at its disposal. Consider yourself for a moment. Do you invest forty or more hours a week in your job simply for a paycheck? Probably not. Psychic income is the satisfaction you acquire from the type of job you do, the customers you help, the recognition you receive and the people you work with. It is the higher value you get by belonging to something larger than yourself. Companies who are able to increase their psychic income will be better equipped to improve performance and retain their talent than those that do not create a personal bond with their employees.

When I first came across the idea of psychic income, I rejected it immediately. My reaction was, "not another feel good program for making sales people productive." I pay my people well, I treat them fairly, and we work hard to serve our customers. I pay my employees psychic income every single day; I just wasn't aware of it. When I put that realization into place, the lights turned on. In our business we are finding the employment market a highly competitive landscape. Wages are rising, competitive employment opportunities are numerous and our employees get solicited frequently, but they stay with us.

The key to increasing your organization's psychic income starts by connecting your employees with a higher purpose. People who are committed to a common purpose form a cohesive group. It is something that they can relate to with one another, and provides guidance for their actions. This phenomenon is very evident in the nonprofit sector, where pay is substantially below competitive market rates. Why does a top performer choose to work for a lot less money? Psychic income. A person might be attracted to a specific cause, or it could be more basic in their need to help a specific group. People join the Toronto Humane Society, because they want an opportunity to rescue and protect animals.

Starbucks is a company that has brought purpose deep into the organization, and created explosive growth as a result. Starbucks' employees, most of whom make relatively low wages, feel committed to its mission and being part of a "family." Their purpose is clear, to provide their customers exceptional gourmet coffee in a relaxing environment. The employees can easily relate to the goal, and their actions are gelled together to work towards a common customer experience. Try a little experiment, and randomly ask a few of your employees two questions: "What business are we in, and what are we trying to achieve?" If you receive differing answers from your people, then you do not have a corporate purpose that is clear and purposeful like Starbucks.

Every day you are competing for the attention and focus of your employees. Each employee must decide whether to satisfy their own self-interests, those of their peers or the interests of the overall organization. A sales person might ponder how best they can squeeze the comp plan in their favor, serve the customer or do what's best for the business. It is important that your people identify and work towards the same purpose. People are more likely to help others with whom they easily identify with. Consider the chaos created by office politics. Small cliques or departmental rivalry can subvert the collective good of the organization for the needs of their sub-group. By focusing every individual on the same goal, a common bridge is built and this drives collective action.

Putting yourself on the line or taking a risk for your company takes a lot of trust: trust in your peers, trust in your manager and trust in the company. An organization's people can be quickly demoralized and stop taking proactive steps when they feel their actions will be criticized or go unrecognized. To foster group identification and trust, managers must work hard to ensure that employees feel part of a family. The allegiance of family is clear, and we can all relate to the bonds we hold with our direct family. Many successful businesses try to emulate the power of family, by making their employees feel they are an integral part of an extended and caring "family business." The foundation of success in the family business is built on trust. When trust is present, individuals can have confidence that stepping forward to offer help to other group members will be reciprocated in the future.

To create a cohesive group focused on a common purpose requires strong leadership. The company's leaders must, themselves, exemplify the ideals of the broader organization and act as role models. Tracy Parzych, CEO of International Time Recorder (ITR), spends a lot of time focusing her team on the value they bring their customers. ITR is a leading developer workforce management solutions, and prides itself on going beyond the call of duty for its customers. Whether it is spending extra time with a customer to solve a challenge or working creatively to adapt their products for a unique requirement, ITR's staff is always at the ready. Parzych encourages and promotes these values by directing her management team on recognizing their employees' every time they go beyond the call of duty. People never get tired of hearing they did a great job, and when the culture is constantly pushing itself further and further, the power of the psychic income increases. Parzych creates corporate rewards that support the sales team in their effort to develop bulletproof customer relationships.

It is a privilege to work at a firm that pays dividends in psychic income. When psychic income is high, hiring must be more selective. You don't want just any person to join your firm, because a person with the wrong attitude can destroy the values and efforts you have invested. Involve your employees directly in the selection process. This allows them to have a stake in the success of every person who joins the firm. To ensure the success of this program your employees will require interview training and a clear understanding of the key attributes of success for the role. By involving your employees in the hiring process you will create benefits in onboarding, performance and retention. Every new employee will see how committed your company is to its people, and realize they are joining a special group.

At Southwest Airlines only three percent of applicants are offered positions. That is a lot of people banging on their door to get a job. Southwest is always held up on a pedestal as a company that has a great culture, great commitment to its purpose and great devotion to its people. They are a company that prides itself in aggressively compensating their employees with psychic income. Our knowledge of Southwest is not accidental. They want us to know about them, and they promote their culture and how elite it is to work for Southwest. Marketing your culture is very powerful, because it reinforces the actions of your employees and draws in people that share those same values. It also has the added benefit of drawing in customers that relate with your company's values and purpose.

The idea of psychic income is not new. Companies have always been looking for ways to improve performance and develop their cultures. Sixty years ago, Abraham Maslow created the hierarchy of needs. He concluded that once a person or a group satisfies their basic needs they will want more. If you only provide your employees a paycheck, then your people will be ripe for the competition to hire. Once you go beyond cash incentives you will find a number of very powerful and very cost effective methods you can use to compensate and satisfy the needs of your people. Satisfying the basic emotional needs of your employees is the psychic income that drives individual employees to exceed and be active participants in your company's overarching purpose.

Jeremy Miller (Jeremy.Miller@LEAPJob.com) is a Partner with LEAPJob (www.LEAPJob.com), a recruiting and consulting firm. LEAPJob helps its clients build top performing sales teams. You can reach Jeremy at 905.281.3090, Ext. 22.