Startups, Diwali, a server update and perhaps a pack of sweets

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The festive season is here and most of us are away on a holiday but the startup folks will always have an eye on their phone, waiting for an important email or a call that might change the course of the startup. While people working at larger companies with set processes have had holidays planned and time at hands, most of the startup people consider themselves lucky if they've managed to get a couple of days to themselves. In this festival frenzy period, when emails are nothing more than Happy Diwali spam or eCommerce sites giving offers, it is hard to write about something relevant. Hence, we turn to Twitter.

A very simple question, but the answers were pretty interesting. Here's what we got:

  • Pyaar (love)
  • Mithai ka dabba, chhota wala. And Pyaar. Telephone wala (A small pack of sweets and love)
  • Gift, no bonus
  • A server update
  • A 15 day salary bonus for team members who were completing 1 year and gifts for rest
  • Half month salary

These answers were in jest and some on a serious note as well but it brings us to an important juncture where we have to think about the work life balance, when does a startup stop being a startup, is this differentiation necessary and a bunch of other such things. Ironically, even when we're talking about lightening up things, the founders will still be mired in questions as to how to do it.

Holocracy remains an organizational structure in an ideal condition which Zappos has been able to achieve to an extent but the questions still hover. Holocracy necessitates the need for a highly driven team wherein every team member doesn't behave like an 'employee' in the traditional sense. For conditions like India, where hiring is a huge challenge for startups especially, such situations become critical.

At this juncture, we'd reiterate three points about incentive management we wrote earlier:

1) Award, don't reward: This is not semantics; it’s an important distinction. When you reward an employee, you are giving something – generally money – in return for service, merit etc. Expectations are set in advance – if you meet X milestone, you will get Y bonus. An award on the other hand, is an honour (generally non monetary) that is conferred with no prior expectations being set.

2) Award with experiences and memories, not money: Money is important; it is the single universal denominator for meeting all our material needs. But it is this same universality that takes away the effectiveness of money as a means of recognition. It brings in little emotion and the moment the money is spent, it also loses connect.

3) Equity is king: When a startup that makes it big, there is a killing to be made out of stocks. Finance folks will add that equity makes it possible for startups to offer attractive pay packages to employees without putting a strain on the company’s cost structure and cash flows.

Read the detailed version of this article

These are just pointers and not sure shot winners because different things work in different situations but one thing is clear, there will be a need to have some kind of a plan and structure to manage incentives. Because after a point, once a company reaches certain scale, the initial energy and sense of ownership goes down to a degree. It is almost inhuman to maintain the intensity that a start manages to have when the team strength is less than 10 (rough estimate).

While we ponder on these questions, let's treat ourselves today and let us know in the comments or by mail if there's something in particular that has worked for you or something that hasn't!

Happy Diwali!

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