Play for performance

Duncan Brown, human resource services, PricewaterhouseCoopers: With the rugby union world cup having got underway in France last weekend, marking over ten years of the game as a professional sport, I was interested to read about the different payment structures that the various countries taking part now have in place. What if anything can they tell us about the most effective ways to pay in our own organisations, and can they shed any light on the always controversial issue of performance-related pay?

Outsiders to win the cup, Wales (I confess to being English, but they have won just three of their last 13 matches) appear to have the most performance-related pay arrangements. The Welsh team actually went on strike over contracts before the previous World Cup, but their new agreement provides a basic player a per-match fee of between £2,000 and £3,000, topped up by substantial team win bonuses, totaling about £60,000 each if they win the tournament.

Cup holders England meanwhile reportedly have a similar sized incentive to win the tournament, but a much higher proportion of their package is in fixed fees of £8,000 per man per game. The top players for beaten finalists last time Australia, by contrast, are on average minimum salaries of around $150,000 (Australian dollars), with win bonuses estimated at another $20,000 (Aus dollars) in a season. Each player pocketed $23,000 (Aus dollars) when they won the World Cup in 1999, but at this year’s tournament they could be in for $42,000 (Aus dollars) each for winning the semi-final and a whopping $84,000 (Aus dollars) more should they triumph in the final.

So what does this tell us? Clearly there is more money going into this expanding international game from spectator and TV revenues and players are able to command a growing share of that, which given how they literally have to put their bodies on the line in a typical international match, probably few of us would begrudge them. But what about the balance of fixed and performance-related payments in distributing the cash?

You could argue that the low basic: high variable pay stance of the Welsh is designed to provide maximum incentive to achieve, set up by an administration that strongly believes in performance-related pay principles. Or the cynics amongst you might say it is a way to keep their costs low and that those £60,000 bonuses might as well be £600,000 for all the chance that the Welsh have of winning the trophy. The Welsh Rugby Union’s money is completely safe in the bank.

The motivation theory with most basis in research findings and reality is expectancy theory. It essentially argues that motivation is high when their are strong linkages between someone’s effort, their performance, and their rewards. Yet in focusing on the rewards at the end of that process, compensation and benefits managers often forget about the first relationship, between effort and performance. However big the rewards that are offered, if your players or employees aren’t trained and talented enough, or led and directed well, or provided with the best facilities and equipment, then the desired results are unlikely to be achieved.

We all read enough in the papers every week about the the huge amounts earned by rugby players’ Premiership football counterparts. But the £300,000 per player bonus offered to the England football team at their World Cup last year in Germany didn’t seem to do anything to improve our lamentable record in major tournaments. We simply weren’t good enough.

Players from some of the virtually amateur, smaller nations taking part in the Rugby World Cup, who reportedly have in the past had to borrow decent kit fron the richer teams, have already been on the receiving end of multiple-point defeats. Yet just to demonstrate that money isn’t everything, underdogs Argentina pulled off a major shock in the tournament’s first game by beating the favourites and well-remunerated players of France with an incredible display of teamwork and defensive commitment.

So perhaps I should be betting a few quid on the Welsh outsiders to supplement my own earnings after all!