Free Money – Innovation Required


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This blog post was written by Andrew Roelfs.

Discretionary spending may be an unfamiliar term to many business professionals; at least it was to me prior to joining Interstates. A few years ago our engineering business unit decided to experiment with the concept of discretionary spending. Since giving the team the opportunity for discretionary spending, we have witnessed some interesting reactions and results.

What is Discretionary Spending

Discretionary spending is money employees are given by their employer to spend however they wish. We gave our engineering employees $500.00 to spend in a single calendar year with only one requirement; to spend the money on something that would enable them do their job better.

What Happened

Interestingly, we had a variety of different results. Not all of the employees spent their money, some pooled their funds with others, while the rest only used a small portion the money. Some employees chose to use their money to improve the visual appeal of their work space by accessorizing with larger monitors and upgraded equipment. Others used their money for educational purposes and purchased reference materials and books related to their specific areas of expertise. Finally, a small portion of employees chose to invest in new technologies they felt would improve their job performance.

What About the Results

As this was our first attempt giving employees the opportunity for discretionary spending, it was not coordinated as efficiently as it could have been. However, we did have some great individual successes and gained knowledge on how to better implement discretionary spending in the future. Some innovative ideas that spurred from this experiment include: electronic PE signings and electronic drawing reviews; photosphere technology to give us a 360 view of a job site using a smart phone; and a collaboration area with a large television to foster remote team interaction.

What Now

After our first trial with discretionary spending, we improved our plan and have continued to give employees this unique opportunity. We have even increased the dollar amount for some employees who have exhibited great success in the past. Given the increasing success of this concept, we have added additional funds which are available for innovative ideas that will cost more than the allotted discretionary spending amount. The idea of giving employees money outside of their paycheck, along with the freedom to spend as they wish, might sounds strange. However, at Interstates, we have found great success in giving our employees the opportunity to put money towards innovation.

What would you do given the opportunity to utilize discretionary spending at work?