Perhaps the most valuable, but often least recognized, source of a company's “intellectual property” is its staff—whether in the passion and brilliance of its scientists or the enthusiasm and expertise of those in business and regulatory functions. However, keeping those hearts and minds loyal to the cause is no easy feat. Human resources (HR) constitutes an increasingly critical function in any biotechnology company, particularly in an industry that's in an increasing state of flux.

Happy families

In past years, the largest percentage of students entering graduate programs had their sights set firmly on tenure-track positions within academia. But times have changed with the advent of the biotechnology business sector, and although many continue to pursue those elusive positions, many more life science graduates are now attracted to industry jobs at biotechnology companies. However, keeping employees happy is no easy task, and even during the best of times it is easy to lose good people.

Most HR managers admit that although salary may influence the decision to take a job, it is not the reason why people stay. Indeed, when asked to describe what they like most about a particular position or employer, employees rarely make reference to salary. Companies try to maintain competitive “compensation packages.” However, managers have sufficient access to “insider” information about industry standards that there are now few dramatic differences between the packages offered by different employers. So, how do different companies manage to motivate their technical staff to such disparate degrees? What helps create a creative research team rather than one of equal “horsepower” but churning out average work? What separates a company that loses its best people after a merger from one that pulls off the deal while retaining all the key team players? The difference lies in the reward programs offered to “right” behaviors, and the way in which these behaviors are defined.

The major motivators for employee loyalty have always been a sense of achievement, recognition among peers, the challenge of the work itself, and opportunities for responsibility, advancement, and personal growth. These are the “keys” to the reward systems targeted at creative work forces, and in HR circles they have become the elements of “satisfaction-based” reward programs

Scientists, in particular, respond well to such programs. They are creative employees—or innovators—and need a bit more latitude than other staff. Scientists are generally not motivated by the same rewards as other employees, and need to feel that they are being given the opportunity to use their unique skills and particular gifts.

Winning combinations

Compensation reward systems can incorporate cash, bonuses, profit sharing, and stock options. Obviously, many companies have limited resources and the company's reward system cannot be limited to these. However, with the right combination of satisfaction-based rewards, companies can take control of staff motivation and ensure that the best people stay on board both in body and mind.

Successful companies of any industry sector ensure that reward systems meet the following seven criteria:

  • Availability. Will the company's rewards be available to everyone? Not all programs have to be applicable to the entire company, so where will the cutoff be? How will those below that cutoff point feel about this? Are the awards sufficiently meaningful? (For instance, cash bonuses would obviously be very limited for most young biotechnology companies.)

  • Performance contingent. To what extent are rewards tied to the performance of the individual or the team? The more performance-contingent the rewards are, the harder creative employees will have to work toward meeting those goals. In general, the results are magnified if the company ties the bonus as directly as possible to the desired behavior. (For instance, any microbiologist on the team who meets a predefined goal gets to attend the national American Society for Microbiology meeting.)

  • Timeliness. Will the recipient recognize the tie (as above), or will it be separated by weeks or months before recognition? (For example, it is a little late to congratulate a team during the company's Christmas dinner for their great performance during March.)

  • Durability. To what extent will the reward continue to act as a motivator over time? The best rewards induce long-term behavioral changes instead of inducing short-term spurts in a team's performance. To do this, reward programs must be durable; they can go stale very quickly. (For example, annual cash bonuses tend to become a part of expected income; hence, they are not very durable.)

  • Reversibility. Companies should examine their reward systems and ask themselves, “what would happen if we took this away?” Sometimes rewards have to be removed before they are fully appreciated. (For this same reason, McDonald's restaurants have their popular Monopoly game only for limited periods each year.)

  • Visibility. In what manner is the reward best given? Frequently, it is the prestige generated by the visibility linked with the reward that is more important to the recipient than the reward itself. However, too much visibility in a sensitive situation can act as a de-motivator for others in the same team.

  • Shared values. Do the reward programs reinforce or contradict the shared values of the team? Companies often unwittingly send out contradictory messages. For example, a company has a team of scientists who are praised and rewarded for any risk-taking, creative act that results in progress. However, every time someone is promoted into a supervisory or managerial role, the company chooses an individual with exactly the opposite sort of characteristics.

Strained relations

In any “roller-coaster” employment marketplace, there are always companies in a state of flux—either downsizing or going through merger and acquisition (M&A) activity. Mark Dibner, chief executive officer of the strategic business information provider, the Institute for Biotechnology Information (Research Triangle Park, NC), says that although the biotechnology sector is robust, M&A will be a continuing phenomenon. When asked about the effects of these mergers, Dibner says it is HR that has to face the biggest hurdle—to preserve the company's ability to do good science. Dibner says: “The HR manager must learn to manage the resulting chaos of a merger or acquisition.”

Bennet Weintraub, chief financial officer of Valentis (Burlingame, CA), has already weathered the storm ensuing from a merger, and he has emerged with a refreshing attitude. “We lost some good people and learned a few lessons,” he says. Weintraub's previous company MegaBios (Burlingame, CA) joined forces with GeneMedicine (The Woodlands, TX) in 1999 because the two companies saw that they had a common interest—the nonviral delivery of genes—and would therefore be stronger as a joined entity rather than as separate, competing businesses. Before the merger, which created Valentis, the two companies employed a total of 200 people. After the merger, there were significant moves to save costs, resulting in a reduction of the number of staff to 80. Weintraub says: “These cost savings were obvious from the first meeting we had together, but of course we knew that it would be a traumatic situation for a lot of our employees. In a merger like this, there is a great effort to focus on certain key projects, and this leaves some people whose skills are no longer a fit. Prioritization must take place, and this means that the company will pick the best people possible to manage these.”

Weintraub believes that the company emerged stronger as a result. When asked about what lessons he learned, and what he might do differently, Weintraub suggests that companies consider the following three points:

  • Make the first cuts quickly. Procrastination does nothing here but hurt everyone involved—both the employees and the company. As soon as it is clear that a staff reduction is necessary, implement the redundancies as swiftly as possible.

  • Reassemble the new team. The period right after a merger is critical for relationship building and the creation of trust. The only thing that can build trust between staff in both companies is to have regular face-to-face meetings. Personal interactions must occur as soon as possible in order to break down the mistrust that naturally builds up during the early stages of M&A discussions.

  • Delineate responsibilities. Get the “who does what” settled soon for each project so that there is no confusion about roles in the combined organization.

Biotechnology companies are now an attractive destination for a wide variety of scientific professionals, including a new crop of budding young bioentrepreneurs. A commitment to intelligent and effective human resources is, however, just as essential as the availability of willing bodies and bright minds, ensuring that companies are in the best shape to cope with the future fortunes of the biotechnology sector.