March 15, 2026
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1.
“But I don’t understand,” I pleaded.
“Are you not paid well?”
“Ya, I am.”
“And you were just promoted?”
“Yes, I appreciated that very much.”
“Ok, so what is it then?”
“It’s hard to explain. I just don’t feel fulfilled.”
“Is there something we can do to help? I really don’t want to lose you.”
“No, I think I need a new challenge. The company’s all numbers now, ya know?”
There it was. No saving this one.
2.
“But you love this company!”
“You’re literally the poster child for our values.”
“I do love this company. That’s why this decision pains me so much.”
“What went wrong then?”
“I just realized I’ve been sacrificing my salary for too long. Every time I bring up a raise, it’s shut down because we’re a startup.”
This was true.
“I work my ass off and I don’t feel valued anymore.”
“What if we did a salary adjustment this second?”, thinking I was clever for showing immediate action.
“I’m sorry Scot, I’ve already accepted another job. It’s too late.”
Checkmate.
3.
“I need to talk to you about something.”
Oh boy, I thought.
“Of course, what’s up?”
“I’ve been here four years. I love the mission. I have no issues with the pay. But I feel like I’m not growing anymore.”
“What do you mean? You’re crushing it.”
“Yeah, but I’m doing the exact same thing I was doing three years ago.”
I didn’t have a good answer. We had just hired someone external over her.
“I don’t want to leave. I just need to know there’s a path for me.”
I told her I’d think about it, but I didn’t have a good answer.
Things stayed the same. She was gone in 60 days.
Motivation.
Most leaders overcomplicate how to keep great people.
Motivation comes down to three things:
Pay: am I fairly compensated?
Progression: am I growing?
Personal Why: do I believe in this?
These aren’t just preferences. They’re the underlying drivers of every person on your team (whether you acknowledge them or not).
If one of these is out of whack for too long, the person is going to leave. Your job as the leader is to keep them in balance. Make them believe:
“Yes, my life will be better if I stay here versus going somewhere else.”
And then deliver on that promise.
Incentives.
Incentives and motivation are not the same thing, but they should be aligned.
Incentives are designed by the company. Motivation is personal. Contextual. If incentives don’t map to actual motivation, then you have a problem.
The good news is you can design your company’s incentive structure to align with each motivating driver.
That’s the whole game.
But it must be within reason. You could get a junior-level all-star to stay by offering them a million dollars a year, but that wouldn’t be in the best interest of the team as a whole.
The best incentive design does two things really well:
Aligns incentives to actual motivations
Creates a win-win between team and individual
Let’s break down each motivation and talk about the corresponding incentive structure.
Pay.
Financial security and reward.
For the majority of companies, pay usually consists of some sort of base salary that goes up marginally each year. Barely covering inflation.
Performance is evaluated by a manager in a black box. And the employee is lucky to squeeze out a percent or two, even with excellent performance.
But the best companies tie individual compensation to actual results. They add variable compensation on top of the person’s base salary, like:
Sales commissions
Performance bonus
Profit share
Equity
In all cases, the employee is cut into the upside of the company.
#1 is common for sales teams. #4 is common for startups. #2 and #3 are less common, and arguably more powerful. Why? Because they are more immediate than equity, and more wide spread that sales plans.
But the design is critical.
Reminds me of the time I noticed some of my employees celebrating with their team after an especially brutal quarter at the company. I didn’t get it. We had dug ourselves a massive hole and they were happy?
So I did some digging. They were celebrating their own results, not the company’s. They were getting full bonuses. Who could blame them?
But it was still a slap in the face. My bonus plan design was broken. Individual performance shouldn’t be disconnected from the company’s. And vice versa. If the company wins, every employee should win too.
So we developed a new company-wide bonus plan where every employee could earn an annual bonus. The dollar amount was tied to their role and responsibility. But everyone was graded the same way. They’d get 50% if the company hit its goals for the year, and 50% if they achieved their own individual goals. Win-win.
I wrote more about the details here:
⤷ The perfect bonus plan for any company
Progression.
Career trajectory and personal growth.
When I was 24 and newly working at Booz Allen Hamilton, my manager Jenny Pugh (now a partner) saw potential in me. She encouraged me to get certified as a Lean Six Sigma Black Belt, taking advantage of my industrial engineering background. Then she made me the project lead on a major engagement. It was bumpy, to say the least, but I grew faster than I ever had in my life.
Ultimately we delivered. Proved Jenny right.
I saw this as a risky move at the time. Why put a 24-year-old in charge of a major project? What if I failed? What if Booz Allen got fired?
But Jenny saw it differently.
She saw it as an investment in my development. Give me more responsibility than I’d ever had, and see what I’m made of. She could manage from afar and make sure we didn’t totally fuck it up. And once I made it through, I’d be much more valuable to the firm.
This is a perfect example of a win-win between company and employee. I ended up getting promoted and picking up a valuable certification. I was worth more to the company, and in the open market.
But most leaders are not like Jenny.
They hold their people back instead of setting them loose. They don’t have the foresight to truly cultivate talent through delegation and development.
Instead, be like Jenny:
Give a slightly uncomfortable amount of responsibility. Give high-potential people more responsibility than others would. Make it their biggest job ever and watch them rise to the occasion.
Coach and support along the way. Not micromanaging. Managing with space for them to scrape their knees a bit. External training can be high leverage too when it’s strategic (like my LSS certification).
Keep the promotion lanes open. Be careful about topping high-potential people with external hires. It’s not that all external hires are bad. But the best companies favor internal promotions and create lanes for high-potential talent to rise. Don’t rush the external hire and force someone out the door.
That last one bit me in the ass multiple times.
Personal Why.
Belonging, meaning and purpose.
Founders bleed mission. But they often confuse their own passion with everyone else’s reason for being there.
Some people enter the company with a strong personal connection to the cause. But this is the exception, not the rule.
Most people overstate their “why” to earn the role in the first place.
“I’ve been passionate about watching paint dry since I was a kid, Mr. Hiring Manager!”
But once they’re in the door, their personal why gets sharper. First, they experience the mission firsthand, and have an opportunity to reflect on why it’s important to them personally. And second, they experience the people and how it feels showing up for. work.
Most leaders (especially founders) think mission is the stronger ingredient (because that’s the way it is for them). But for most employees, it’s the people.
So how do you intentionally design for purpose and meaning?
It doesn’t work the same as Pay or Progression – where you either provide the thing or you don’t.
For purpose, you must create opportunities for each individual to connect with the mission, or connect with the people. This gives them a shot in the arm that can last months. Really nailing your all-hands meetings is a great place to start, but you can be a lot more creative than just that.
At Classy, we created a program called Classy Gives. It was a fundraising competition using our own product, where the top fundraisers got to go on a mission trip to work directly with one of our nonprofit partners around the world. I participated too, and personally attended trips to Uganda, Nepal, and South Africa with the team. It was an incredible way of building camaraderie, and creating a much deeper connection to our mission.
Some leaders think this stuff is soft. There’s more important things to do. But this is exactly what kept our best people around during our worst times.
⁂
Take it with you.
Now you have the framework to build real unity between company and team.
Your team is motivated by three things:
Pay
Progression
Personal Why
Your job as the leader is to design incentives that map to real motivations. Not your own motivations. Their motivations.
Then ensure your incentive structure creates a win-win for both company and individual. When the company succeeds, the employee succeeds. And vice versa.
Do this correctly and no one will ever want to leave.
Till next time,
Never say die 🏴☠️
~~~
P.S. We launched a new Highland Kit!
⤷ How to design the perfect bonus plan for your company.
The Highland Kit includes a bunch of amazing stuff to make rolling out the bonus plan much easier:
I hope its helpful! Let me know what you think!
🐐🏔️