Coro’s Blog: On Purpose

What motivates employees? Financial incentives or non-financial incentives?

Published on July 10, 2013

ellen-weinrebI welcome Ellen Weinreb to my blog page. Ellen is the managing director of Weinreb Group, an executive search firm specializing in sustainability. Her firm puts out regular reports on Chief Sustainability Officers and the sustainability profession.

A guest post by sustainability executive search professional, Ellen Weinreb:

In early June I had the pleasure of presenting on a panel at the Sustainable Brands Conference in San Diego, where I discussed several case studies of HR incentives facilitating corporate sustainability agendas.

What started off as a panel on incentives soon morphed into a discussion about motivations. We concluded that employees are motivated by a combination of both financial and non-financial incentives, but there was less emphasis on financial incentives than I had expected.

Sustainable Pay Measures Six Categories

Coro Strandberg was kind enough to allow to me share some highlights from her Sustainable Pay report that studied incentives tied to sustainability for executives in the TSX 60. She measured six categories of non-financial incentives: safety, environment, employees, customers, CSR brand and community / stakeholders. She found that safety was addressed in approximately two-thirds of Canadian public companies’ compensation packages, followed by environmental concerns.

My fellow panelists were: Andy Broderick, Vice President of Community Investment at Vancity; Jonathan Atwood, VP of Sustainable Living and Corporate Communications at Unilever; and Suzanne Fallender, Director, CSR Strategy & Communications at Intel.

Case Study – Intel

Intel was one of the earliest companies to adopt a plan that ties sustainability targets to financial incentives. Intel provides other opportunities for employees to engage in CSR, such as its Sustainability in Action program which funds employee projects that promote sustainability.

Case Study – Vancity

Vancity has performance targets, but has taken some cues from partners in the Global Alliance for Banking on Values to consider eliminating incentives. They “screen for skills and hire for fit.” That is, they want to hire individuals whose personal values align with Vanity’s values – and are therefore not motivated by financial incentives. I was fascinated to hear about Vanity’s orientation program for new hires. At the end of a five-day orientation, new hires are offered a severance package if they feel their values are not aligned with Vancity’s. In other words, new recruits are shown the door if they do not sign onto the corporate values and vision.

Case Study – Unilever

Unilever’s story is at the other end of the spectrum. There are no incentive programs, but at the same time sustainable living is the center of their strategy. Staff members are incentivized to perform. There is also a correlation between top performers and the brands most closely aligned with sustainable living such as the Dove and Ben & Jerry’s brands. The top performing employees work for the top performing brands and therefore receive the highest bonuses.

To conclude, the key finding for the panel was that successful incentive programs exist when there is solid alignment, integration and convergence between incentive programs and the corporate mission or purpose.

About the Weinreb Group

For over 15 years, Weinreb Group has been a trusted resource for sustainability and corporate social responsibility recruiting. CEO Ellen Weinreb founded Sustainability Recruiting in 2005, an executive search firm placing sustainability professionals in corporate leadership roles. In 2011, she launched Weinreb Group, to unite her consulting and executive search expertise. She has seen sustainability evolve from a niche area into a central strategic function that impacts all aspects of business. She specializes in finding that rare talent that combines functional expertise and sustainability fluency.

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