You’re in charge.  Or at least you have a say in developing compensation programs for your organization.  That’s a vital responsibility, especially if all is not well in your world.  Perhaps an audit of those pay programs has generated worrisome results, or the latest employee engagement survey showed a large measure of discontent.   Perhaps turnover is rampant, or you’ve just sat through an uncomfortable meeting with a boss upset over the runaway cost of labor.

Something has to be done to better utilize your payroll dollars, because too much money is dripping out of your company like a leaking faucet – and the rest isn’t giving you much bang for the buck.

The challenge, then?  You have to change your world.

How do you do that?  There are program design considerations, costing models, impact studies, external and internal analyses, even focus groups perhaps, but at the end of the day you can’t simply snap your fingers.  Your ideas, your recommendations need to be approved by the higher ups.  How do you make that sale?

Let’s start with the easy part; what not to do.

When facing senior leadership with business-impact proposals the quickest way to be shown the exit is to tell them what they don’t want to hear.  Sounds obvious, but basic judgment errors are commonplace when you’re so caught up in knowing the answers that you forget to focus on the right questions.

A few examples of how not to sell your ideas:

Leading with “it’s the right thing to do” is rarely a good idea.  Using an emotional, feel-good rationale is seldom a strong argument and is easily sidelined by the bean counters or anyone playing the “this is a business” card.

“Surveys tell us . . . “ can be another weak point, because the argument that everyone else is doing something hasn’t worked in a debate since you were a kid.

Over analysis: the more extraneous numbers you throw at senior management, the more you rely on charts, graphs and regressed formula trend lines to make your point, the more vulnerable your proposal becomes.  The risk is in having the numbers become the story.

I’ve seen senior executives feel compelled to ask multiple and often tangential questions about the support calculations, just to show they’re engaged and shouldn’t be taken for granted.   Don’t let your proposal  rise or fall on the comfort level of decision-makers struggling through the details vs. the concept.

Principles of the sell-job

What follows is a series of suggestions you should consider before walking into that critical proposal review meeting.

First and foremost make a business case where your recommendations illustrate that the company will win.  Management’s prime directive is to act for their own self-interest; altruism is over-rated in the boardroom. Once you have them nodding their heads at their own good sense, they’ll be more easily moved to support your plans.

Tell a story; start with a statement of the problem, then augment with a back story to explain how the situation has become so precarious.  Show the impact of inaction, then close out with your recommendation  - highlighting impact, savings, reduced turnover, whatever the goal  - that solves the problem.

Do you know the ROI for your proposal?  You had better have one, as that could be your strongest argument.  Pros and cons?  Are there potential glitches?  Rarely will you have simple, uncomplicated solutions that can’t fail.  So it would be better for you to address any troublesome possibilities early on, to soften the potential “gotcha’s” that could trip you at the worst possible time.

Always have a backup plan, as all-or-nothing strategies don’t work well outside of the movies.  You’ll need a plan “B” in your back pocket, just in case.  Better to get half a loaf today and be able to hope for more later, than crash and burn today because of pride and stubbornness.

Which means you shouldn’t fall on your sword over ideas, but be prepared to compromise.  Proprietary ownership of ideas (I want it my way) should be secondary to achieving the business goal.  But often times pride does get in the way, sometimes derailing sound concepts for the wrong reasons.  It’s not about you.

The numbers rarely speak for themselves; in fact you’re at risk if you use statistics as your main argument.  Instead, paint a picture with text.  Use all those figures only to support the point you’ve already made.  Strategic thinkers balance technical skills with the art of persuasion, influencing others to undertake the desired action.  They don’t throw out a bunch of numbers and say, “see?”

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Even when the task ahead is daunting, go ahead and take that first step.  It’s usually the hardest.  But if you’re prepared to achieve incremental gains vs. sweeping changes, if you keep your eye on the ultimate goal, you will find the second step is easier, then the third and so forth.

“Rome wasn’t built in a day” is a classic and over-used phrase, but for good reason.  Because it makes sense.  Because it rings true.  So think of Rome when you try to change your world.  Just don’t act like Don Quixote and run off to chase windmills.

Here they come, those who question the pay-for-performance credentials of the current executive pay process?  Every spring, like daffodils popping through the warming ground investigative articles appear and challenge the validity of how the executive suite is rewarded.  Critical commentaries by notable Compensation experts, as well as a financial analyst here and there, will question whether job performance has warranted the amount of financial rewards reported in proxy statements.

What follows is usually a series of back-and-forth speeches and written pieces both criticizing and defending the logic of the executive reward process.  However, those who press their divergent viewpoints seem unable to reach consensus on an equitable process, and so next year the cycle of reward and debate repeats itself.  Such has been the case for years.

In my mind though, it is the proverbial “man in the street” or “court of public opinion” that truly matters.  And if you take that point, that it is the general public who needs to be convinced that our corporate leadership isn’t gorging themselves on financial largesse like hogs at a feed trough – then the multiple explanations that appear each season touting the rightness of executive pay fall disappointingly flat.

Unfortunately it is not the negative impressions of the general population that is being addressed by these pundits, but instead you find that a complex argument is often presented in support of those who are being challenged, the executive leadership themselves.  This is a circle-the-wagons strategy crafted by status quo enablers to refute challenges to the current executive reward process by providing a technical defense that would not be understood by that same general population.

I recall a former CEO once telling me, it’s a matter of optics; the present system of determining executive suite reward looks bad to the general public.  No amount of explanatory formulae or charts and graphs is going to change that impression; the more complex the defense the more skepticism that will be generated.

Another senior executive cautioned me that if I couldn’t sell my proposal on a single sheet of paper, including a lot of white space, then my arguments wouldn’t convince him.  In other words, keep it simple, keep it clear and keep it brief.

All too often the defense of executive pay is presented as a series of formulaic methodologies to be utilized by corporate leadership (with the support of consultant intervention) to refute their critics.  However, even as these diverse calculations try to make their point the wider audience will remain confused, skeptical and unconvinced, so how has the argument been advanced?   The reward system will still look bad.

I support the idea of measuring performance to gauge the amount of reward.  Who can argue with that?  But the process being described by those touting the current approach is flawed by its complexity, by its confusing array of acronyms and ultimately by its inability to explain itself in laymen’s terms.

Apologists for executive pay often fail to discuss / explain a key element of pay that looms large for the rest of us – determinants of “how high is up” or how much is “enough” reward.  Given that for similar performance non-executives typically receive considerably less reward, it is disappointing that this disconnect in thinking is so often ignored.  A large portion of the looks bad environment is the amount of the reward.  Should those on “mahogany row” have parameters for their rewards, even maximums or caps like the rest of the population?  That sounds fair, doesn’t it?

The problem connecting a pay-for-performance concept with examples of executive pay excesses is an optical one – it looks bad!  Attempts to rationalize the practice with complex terms, charts and theorem won’t convince anyone outside of the board room.  The way to change that negative impression is to challenge the convoluted methods that executives use to rationalize their reward structures.  The general population (not the financial analysts, proxy readers or even compensation specialists) wants to see a direct cause and effect (simple, clear and brief; performance equals reward), as that is how they are rewarded in their own lives.

Why make rocket science out of a basic concept?

The holidays are over.  The melody of jingle bells is slowly fading into the background as employees trudge back to work to face the long winter ahead.  This is also when companies experience their annual January headache – the process of setting new performance objectives for their management incentive plan.

A new year has begun.

Headache?  Most managers would rather focus on closing down the old year and maximizing their bonus calculations.  But at the same time HR starts to compel that attention be paid to managing the new cycle.  Something’s got to give, and right now it’s usually effective planning.

Which presents a risk.  Because with a substantial payroll expense allocated to management bonuses it is critically important for plan designers and implementers to get this first step right.  Everything that follows after is cause and effect.  Poor planning up front usually means that bonus dollars spent later may reward effort neither anticipated or even necessary.  The results you didn’t plan for, or didn’t prioritize, won’t be delivered.

But somehow the bonus pool of dollars will be spent anyway.  And where does it go?  Perhaps not where and why you had intended – but instead rewarding performance that may not be in sync with broader company objectives.

Let’s face it, though – managers enjoy setting objective, quantifiable and measurable goals as much as they enjoy writing job descriptions.  But they don’t, do they?  So as an HR Leader, generalist or specialist, you might soon find yourself acting the dentist – pulling teeth, struggling with recalcitrant managers to get proper employee objectives established by the end of the first quarter.

It can be frustrating.

While you’re grappling with these reluctant managers, trying to help them get their act together, you should remember a few key guidelines regarding the effective use of rewards to motivate achievement of company goals.

• Focus employee attention on company / department objectives via prioritization.  Set relative weightings to reflect their individual importance to each other (this is most important, this is secondary, etc.).  It would be a rare occurrance when all goals are of equal importance.

• As most employees have multiple objectives, any one target weighted 10% or less of targeted incentive compensation will be ignored, if possible.  Why?  Because you’re announcing that this is not an important objective.  And as incentives are all about behavior change, employees may not even cross the street for 10%.  You’ll need a bigger carrot.

• Token objectives only receive attention when expected achievement is considered so easy that success would have occurred even without an incentive.  That’s wasting money, right?  Don’t go there.

• On the other hand, have a care before you assign more than 50% to any one objective.  Employees might figure that exceeding expectations for just one key goal will generate sufficient reward for their efforts.  Then they may not focus on other important business goals.

• Limit objectives to no more more four, else you risk diluting effort and causing an “everything is important, so nothing receives focus” performance year.  The business receives more value for rewarding results vs. activity – so keep the emphasis here.

Human nature suggests that the natural tendency for most employees is to concentrate on the goal with the highest reward and least resistance first.  They may even decide to ignore other objectives – no matter the value to the company – if in their mind the reward for the prime objective makes up for lost opportunities elsewhere.

This is especially true for sales employees, who often ignore small payout objectives in favor of focusing on the bigger ticket reward goals.  So you need to put your money and weightings behind the goals that have the greatest impact on the business.

Bottom line is that you want to avoid disconnected effort.  Your key people should not be keying off on objectives that are less important than those you want them focused on.

Don’t let them head left when you want them to turn right.  Your money might take the wrong turn as well.