Not So Good After All? Don’t Let ‘Altruism’ Kill Your Company

Head to the local bookstore, pick up some books on management practices and it shouldn’t take long to find thought leaders espousing how "altruism" is the panacea for so many ills in the business world.

Check out my own book Code Ahead, and you’ll see my argument for the exact opposite. Altruism isn’t the key to success, it’s a recipe for failure. I’ll take it a step further: at Zerocracy we forbid altruism. It’s not that we’re "bad" people, far from it, but I want to ensure all of my projects are successful, and in order to do so, we have to ensure everyone is getting their just desserts.

Dig a bit deeper through the books on the business shelves and you might come across "equity theory." Invented by J. Stacy Adams, equity theory argues that employees want to get back an equal amount of benefits as they put into a project. Equity theory belongs in the "transactional management" school of thought, which has fallen out of favor in recent years.

Instead, more "thought leaders" are urging everyone to embrace "transformational laissez-faire leadership." According to this theory, piecework trade is primitive and outdated. Modern leadership, you see, has little to do with transactions and instead is about helping, sharing, inspiring, and nurturing. Rather than transactions and a cold, calculated analysis of benefits, we should pursue common goals, inspire one another, and blah, blah.

Sounds great on paper. In practice? It’s a recipe for disaster. And I’m not the only one who has drawn this conclusion. In their article The Destructiveness of Laissez-Faire Leadership Behavior, Anders Skogstad et al claim that transformational laissez-faire leadership is counterproductive and produces high levels of stress and interpersonal conflicts.

Likewise, Abdul Qayyum Chaudhry et al. find in their study Impact of Transactional and Laissez Faire Leadership that bank employees are more productive under transactional leadership than laissez faire leadership.

While laissez-faire leadership focuses on pie in the sky concepts, transactional management remains centered on transactions. We can distill this simply as an "exchange of value." Team members put hard work and skills into a project. Their boss pays them back in the form of a generous salary, a rocking office environment, and the appropriate kudos.

As a result, employees feel well-rewarded for their efforts. On the other hand, if employees are pouring in unpaid overtime and going "above and beyond" but not being compensated for it, they’ll eventually resent their employer.

We can think of two extreme attitudes among employees. A perfectly altruistic employee will contribute and not expect anything in return. An egoistic employee won’t contribute anything and yet expect their salary to grow. Both employees present challenges to a company, but while altruistic employees are a death sentence, egoistic employees can be a boon with the right management practices. Let me explain.

Let’s consider "fail fast" versus "fail safe." Under a fail fast model, we want a project to fail as quickly as possible so we can identify bugs. Once bugs are identified, we can address them. In our case, bugs could mean code or management practices.

Under a "fail safe" model, people try to cover up the bugs. See the problem here? Fail safe models conceal defects while fail fast forces you to focus on quality and results. Instead of letting a project fail quickly, or identifying bugs and addressing them to ensure success, fail safe management practices simply drag things out. Your project or business might not fail tomorrow, but it’s already on the path to defeat.

If we apply "fail fast" to team models, altruism is a bug. Employees will contribute but not be properly rewarded. Soon, they burn out and tune out. Your rock star employees will either drift away or become dead weight, knowing that their efforts don’t matter, they’ll be compensated the same either way. Eventually, your team will fall apart and the project will collapse.

You might try to conceal the issues, perhaps giving some great speeches or sending out encouraging emails, or whatever. But you’re still locked into failure and the lack of proper compensation will sap motivation in the long run even if you find ways to temporarily boost it. Altruism is a bug and you’re not helping your business by dragging things out.

Under a fail fast model, egotistical employees also present a challenge, but one that can be fixed. Egotistical employees will want to be fairly compensated and then some. This could quickly drain the company’s coffers. However, if you install the right KPIs, oversight, and requirements, you can force those egotistical employees to work hard to get their just rewards. And since they’re being properly rewarded, they’ll stay properly motivated.

At Zerocracy, we’d fire employees who offered free overtime. (Okay, first, I’d probably share some articles and my thoughts on why altruism is actually detrimental to the team. If they don’t get with the program? Bye!) We want egotistical employees because they can be properly managed and motivated.

The end result? Team members that always work hard, and are willing to put in their best because they know we’ll reward them fairly. That’s why Zerocracy pursues #NoAltruism.

As for other developers? Skip donating your overtime and settling for less. Always demand as much as you can and provide as little as possible in return. It might seem counterintuitive, but well-managed companies will thrive with such employees under their roof.

Yegor Bugayenko is founder and CEO of software engineering and management platform Zerocracy.