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The More The Merrier?

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 29-10-2014

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Handout, by DianeWorthIt’s fairly common to find articles written by those who advocate increasing the eligibility of employee incentives, to push inclusion further down the organization’s hierarchy.  The argument is that all employees affect a company’s success, that every employee will chase the almighty dollar of variable pay, and that the opportunity for ever larger rewards will motivate them to do great things.  All of which would in turn deliver improved financial results for the company’s bottom line.


And maybe it’s not such a good idea after all.  Perhaps it’s a bit of a crap shoot as to whether higher compensation costs would deliver improved financial gains.  Let’s take a look at the challenges ahead when you consider a broader eligibility for your annual incentive program.

What’s The Plan?

What do you consider an incentive when designing a compensation program?  My view is that a variable reward should be paid out for performance that goes above and beyond the norm, beyond what’s expected.  Thus it shouldn’t be a reward for performance that would have occurred anyway.  The intent of an incentive is to prompt a change in behavior, to get employees to do something they wouldn’t ordinarily have done, and to get them to do it because they’ve been offered a financial reward.

That should be the plan.  Otherwise it’s a giveaway.

You’d expect that the “above and beyond” objectives would differ from year to year as the needs of the organization evolve and adapt to changing business conditions.  This emphasis on annualized objectives reinforces the intent that incentives should be designed to reward effort beyond what’s called for in the job description.  And they shouldn’t be repetitive, the same objectives year upon year.  That’s what the job description is for.

Incentive rewards shouldn’t be provided simply because an employee performs their job well.  That particular carrot should be the intent of the annual merit increase.  In fact, such an exercise would be considered “double-dipping,” paying for the same performance twice.  You shouldn’t be using an incentive as an inducement to get employees to perform their expected duties.  Again, that’s paying twice to reinforce the same behavior.  It’s also using compensation to replace the leader’s own responsibility to manage their staff.

Is There A Company Advantage?

When deciding on whether to add a variable pay opportunity to an existing base salary compensation model, you need to ask yourself, “what will the company receive in return for the increased costs of an incentive program?”  If you’re planning to increase targeted compensation costs by 5% or 10%, how will you answer the ROI question?

Caution:  Always provide a business (financial) rationale, and not subjective phraseology like “survey says” or “everyone else is doing it” or even “it’s the right thing to do.”  Management tends to frown over such weak rationalizations.

Employees lower in the hierarchy have a reduced line of sight between their actions and business success.  Which makes it harder to create meaningful, quantifiable objectives for performance  that integrate vertically with department, functional and / or organization objectives.  If you don’t integrate what you’re telling employees to do, you may find yourself paying out incentive rewards when the company as a whole hasn’t been successful.

So ask yourself to consider the business urgency in your organization for lowering variable pay eligibility to those below the management ranks.

  • Is the employee line of sight (performance / business results) direct, or remote?  If remote, what are you paying for?
  • Can you quantify the expected ROI?  The wrong answer here suggests a giveaway.
  • Can you balance the increased compensation costs against assured financial gains for the company?
  • Would the variable pay become strictly an added cost, or would any portion of base salary be at risk?  “No pain, no gain,” or “no risk – icing on the cake?”

If you have a reasonable doubt on any of the above points, I suggest you think long and hard before implementing such a program.  It would be very difficult to dig yourself out of that hole.

Relax At Your Peril

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 15-10-2014

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Easy Button, by Civilian ScrabbleWith the fall of the Autumn leaves the attention of most senior management personnel shifts to the upcoming changeover of the business year.   And that click of the fiscal year calendar is accompanied by the beginning of their new annual incentive plan cycle.  So while the left hand is busy processing performance assessments and award payouts as an end-of-year project the right hand is getting ready for the new cycle.

In many companies this fresh start is automatic, an administrative process not given much thought past doing what they did last year, and the year before.

Here’s a thought.  Instead of issuing another rubber stamp copy perhaps now might be a good time to review your annual management incentive plan and take the opportunity to breathe new life into it.   Because if left on autopilot too long it’s surprising how many extra names find themselves added to the incentive-eligible rolls, slowly adding up what can become significant costs, often without proper review.

Eventually senior management will notice the ballooning costs and clamp down, either by reducing eligibility in a broad-based fashion, and/or by reducing incentive payment opportunities.  Perhaps both.  You don’t want to get to that point.

The Sneak Attack On Your Payroll

Has your company made too many people eligible for the incentive program?  Take a quick look at a 3-year growth curve of positions and employees being included.   Would you consider all these deserving?  Is someone making that decision, or has title or grade designation become the deciding factor?  Meanwhile, can you explain the ROI for the growing cost of management incentive pay?

Employees deemed eligible for an incentive opportunity should have a line of sight between their performance against measureable objectives and award payments.   If they don’t, what are you rewarding?  Your plan shouldn’t be a profit-sharing scheme, where eligible employees light a candle in the window and hope that the company does well.

Companies typically use the “Manager” title as an eligibility cutoff, but perhaps what you name a position shouldn’t be the sole criteria.  What about those whose responsibilities include managing people, versus individual contributors who manage a budget or a specific responsibility?  Sometimes they’re all called “Manager.”

Using a grade designation can have its own problems; is everyone in a grade eligible, and if not how do you differentiate between positions, when the company has already deemed each to be similarly valued?  Slippery slope here.

If you’re suffering from title inflation and have granted puffed-up titles for certain employees, are these Managers actually managing or are they only supervising, or are they really technical experts with a gratuitous title?

Have a care that your pay-for-performance management incentive program doesn’t evolve into an entitlement program.

Where’s My Check, Please?

Something else to look at: is the incentive award at risk?  How many of your eligible employees don’t receive an award each cycle?  If practically everyone receives an award perhaps instead of an incentive plan what you have is a delayed reward program; managers put in their twelve months and expect a bonus payment.

Does your incentive program require behavior above and beyond, with objectives linked to broader company goals?  Or are your objectives only finalized at the end of the cycle, simply to comply with some Human Resource assessment form?

At the lower limits of incentive eligibility some companies start with an incentive target of 5%.  However that low a reward opportunity isn’t a carrot for anyone.  For that small amount of reward you won’t change anyone’s behavior, never mind maintain their attention for 12 months, so why bother?   If behavior isn’t going to change, if you’ll receive the same performance as before, but now for an additional  5%+ cost increase, what’s your ROI?  In my view this money is wasted.

Now is the time that you should have a look-see at the effectiveness of your annual management incentive plan – and to suggest meaningful improvements.   Because once the current payment processing cycle is complete the pressure will be on to roll-out the 2015 program.  And at that point the die will be cast until the following year.

It’ll be too late.

Use And Abuse Of “Retention”

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 08-10-2014

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Boba Fett Reward, by pasukaru76In some circles the word “retention” has an identity problem.  Some would say that, if you don’t want someone to quit your organization, any extra money you give them as an inducement to stay can be considered “retention.”

When you don’t want a valued employee to leave your organization, one who might otherwise do so, what are you going to do?  You’re going to make it worth their while to stick around. You’re going to offer them more money.  I say offer, because you need to put a carrot on a stick – an inducement to get them to remain while it might be otherwise in their best interests to leave.

This concept is very broad, and if not applied carefully can be used to justify any manner of increases for any manner of employees.  It can become the opposite of what you intended when you designed your reward programs.  Wide discretion and rationale subjectivity could replace pay-for-performance, internal equity and the balanced foundation of your structured reward programs.

What a retention should not be, is an end around effort to give employees more money; a callous attempt to “beat the system” of annual pay increases – to find another way to give selected employees more money – outside the system.  The game is played by throwing down the fear card; talent will leave us.  We can’t have that.

So have a care.

And then there’s the retention bonus

When should you consider a bonus as a retention tool?

  • You’re selling a business or a piece of your organization.  If the performance of the business falters during the sale process the value of that business could be negatively impacted, so you need people in place to maintain proper operations.
  • When you’re closing down an operation and laying off the workforce.  Someone has to stick around to make sure that the operation remains as effective as possible for as long as possible, and then to turn off the lights.

Employees who manage an operation that’s been offered for sale are typically considered as part of that operation, so they’ll be leaving the parent organization.  In effect, they’re being let go with the rest of the for-sale operation.

If perchance these leadership employees might still be retained by the parent organization their efforts should be considered a project.  So you should consider a retention bonus when you’ll be losing the employee(s), not when it’s simply a project for them.  Projects can be a great objective for the annual management incentive plan.

You have to offer a large enough incentive that they’ll remain until the end. Too little and they could be lured away by a new employer’s offer.  You could phase in retention bonus payments, in stages, but always keep the largest piece until the end.

You could also tie payments to results; otherwise you might pay out monies for someone who is simply sitting there, working on their resume and playing computer games.

How much is enough?  Enough to get and keep their attention, so a hefty percentage of their annual base salary is a good place to start.  It would be money well spent, so I’d advise you consider up to 50% for the leaders, and ~25% for senior staff.

How many should be included in the program?  Keep it small, only those deemed critical to continued operations.

To be clear, any offer of a retention award would be forfeit should the employee leave prior to the agreed upon date, or if their performance is considered “poor.”  Note: you might have trouble in a failing or “for sale” business to determine gradients of performance.  But obvious failure to perform (against your pre-established objectives) should have a penalty.

Retention as a concept can be a slippery slope, so be careful where and when you step.

The Junk Yard Dog

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 29-09-2014

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Angry Tiger, by Guyon Moree

Used and abused like a junk yard dog

 I’m a perverse fellow.  I like working in Compensation, and have intentionally made it my career focus.  Not many of my ilk will admit that.  Some use it as a stepping stone for higher positions within Human Resources, while others look at us with a sidelong glance, as if we’re “one of them.”

But I know what I’ve gotten myself into.  I know how practitioners like myself can be viewed by colleagues, employees and upper management.  It isn’t always pretty.

  • We can be perceived as a “numbers-type,” bereft of charm and personality.  Picture the fellow with the pocket protector and ever-present calculator.
  • We’re often not viewed as much of a business partner, as we’re too externally focused (what are others paying, what do surveys say).   A constant criticism is, “if only they understood the business.”
  • Folks think of us as if we wore a badge.  We’re too much the gatekeeper or policeman (Hey there!  You can’t spend so much, you can’t rate employees like they’re relatives, you have to follow policy,  we don’t like exceptions, etc.)
  • Our work is easy to criticize, whether it’s our view of the competitive marketplace, how much employees should receive next year, what grade our jobs should be in (what do they know?), or requiring managers to use those hated job description and performance review forms.

As a result,  I never did get many Christmas cards.

Alas, for those who are doing their job, which is managing or directing compensation, not simply administering it, these practitioners eventually start to feel like that old junk yard dog, beaten down, abused and definitely not considered as one of the “cool” folks.

Being challenged is routine

Think of the gauntlet faced by many when presenting the annual compensation proposal.  You can almost see the agitated twitches appear as recommendations are presented and the inevitable questions, skepticism and doubts pop out like mushrooms after a rain.

–  What surveys did you use?

– Those aren’t the figures we expected to see

– Are you sure about these numbers?

– Your recommendations cost too much.  Where can you cut?

– That’s not what everyone else is doing

– My brother-in-law heard  . . . (fill in the blanks)

– Can’t we just go with the cost of living and move on?

And the list goes on.

That’s the way it is.  Like I said, used and abused.

On the other hand, some compensation administrators (when it looks like a duck and acts like a duck it may still have a different title) will tend to present what is expected, what won’t cause trouble, and what will be easy to implement.  Call it “kicking the can down the road.”  It may not be in the company’s best interest, but it certainly is for the don’t-rock-the-boat administrator who wants to be liked and fit in.

So which one are you?

You don’t have to toss away your career when you stand up and tell senior management what they’re paying you for; and that is, your professional opinion and best judgment.  This is a time when your greatest value is to open their eyes with your thorough analysis, your understanding of problems and how to resolve them, and your sense of likely unintended consequences.

If you can’t stand the heat, get out of the fire.  You’re in the wrong job.  I’m suggesting that you stand up, you don’t give up, you don’t give in or let the challenges to your professionalism sweep you away.  Remember that administrators may be liked, but they’re less often respected.

In the course of my career I’ve been that junk yard dog.  But I made it.  And I gained a lot of professional respect from colleagues and senior management along the way.

So can you.  It’s your choice.

Btw, I still don’t get Christmas cards.  They all go to the generalists.

Please Like Me!

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 22-09-2014


Portrait, young business manThat’s what a manager is saying to their staff when they show a reluctance to distinguish between high performing employees and the “Joe Average” types when it comes to granting performance rewards.   These “leaders” make excuses to avoid tough pay increase decisions, instead manipulating the Pay-For-Performance system to ensure that, whenever possible everybody gets something.  If there isn’t enough money in the budget, well, there’s Human Resources to blame.

This is what happens when managers aren’t able, or aren’t willing to manage pay.

They want to be liked, and who can blame them?  We all want to have friends.  These managers have to control a team, have to consider the well-being of the entire staff, keep spirits high, and limit any grumbling in the ranks to a minimum.  They’d like to be appreciated by their employees for those efforts, while at the same time keeping their “people issues” to a minimum.  So in their view treating everyone the same, or as close to that as possible, would level the playing field – so they can boast, “we treat everyone the same.”  In other words, there aren’t any “special people” here – not even performance stars.  Such managers believe in a kind of broad-based reward redistribution; i.e., everyone deserves to get something.

And they hope to get Christmas cards from the staff at year-end.

Ah, the angst!

At the same time this type of manager is fearful as well.  They’re afraid of being criticized for making the wrong decisions – or for not making a decision at all.  Some become paralyzed by indecision into non-action.  Why is this?

  • If any employee quits, that could be a mark against the manager; that they aren’t an effective manager.  Why else would someone quit?
  • Such criticism could be doubled down if it’s a valued employee who has left.
  • Some managers take to heart the adage, “people don’t quit companies, they quit managers.”  So they could take it personally when one of their employees decides to abandon the  team.

And then you have the angst over the replacement process.

The losing manager will have more work on their plate, having to cover for the missing employee, then having to take the time to recruit and ultimately provide training for the replacement.  How long will it take to get everything back to normal?  How long will their life be disrupted?

So it’s worth it, the logic goes, to keep everyone as happy as possible.  Because to a manager a departing employee is bad news all around – unless of course that person is in the bottom 5% that we want to leave.  But how many managers actually point a finger at an employee and say – you’re a 5%?

For such reluctant managers you’d need an employee’s taped confession to a federal crime committed on company property in order for them to feel justified in taking a hard line.

On the other hand, effective managers strive to be respected.  Being liked is nice, but shouldn’t be bartered or purchased at the expense of doing their jobs.  Which raises a question.

So what is a leader?

There are many answers to this question, but for our purposes let’s focus on the ability to make timely and thoughtful decisions for the good of the organization.  That’s why the employee with the “manager” title was promoted, wouldn’t you say?

It’s not a matter of making a decision in the purest sense, because bad decisions, even idiotic decisions would qualify.  One could also construe that a manager’s non-action, non decision is in fact a form of “decision.”  It’s taking decisive action in the face of challenge that sets the effective manager apart from the rest of the pack.

Is there a difference between a manager and a leader?  Both can have the same title, but their outlook on roles and responsibilities could be quite different.

A manager can be someone who simply administers an ongoing operation, keeping it running, maintaining processes and completing assigned work.  An important role to be sure, because we need Indians as well as Chiefs.  We need someone to be the mortar that holds the bricks of the business together.  But perhaps that’s more management than leadership.

For its part, leadership has coined the phrase, “follow me.”  These are the individuals who set the course, stand up for themselves and make the tough decisions.

So, yes, there’s a difference between someone acting as a manager vs. another who’s driving forward as a leader.

Which one are you?  Which one do you report to?

Don’t Kid Yourself

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 08-09-2014

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Mistakes, by Orange_BeardAs a manager within your organization you’re expected to provide leadership and direction for those employees who report to you.  Likely that requirement is a key accountability in your job description, and fulfilling that mandate means that you’ll have to make decisions that impact your employees – for good or ill.

Bummer.  Not everyone is comfortable with that part of being a Manager.

From the senior management perspective a key leadership expectation is the matter of the employee performance review – and the future pay (reward) actions based upon that assessment.  The bosses have placed the ball squarely in your court to render those decisions.

Well, are you a tough manager with high expectations, or do you have a “rep” as an easy rater – as someone easy to please, someone who hesitates to make up or down decisions about their employees?  Do you feel that all employees deserve an annual raise?  Are you reluctant to choose?

Perhaps you have a tendency to make your decisions based on emotional factors (employee needs and wants), versus on the basis of business-related practicalities (performance assessment, company affordability, most deserving, budgets, etc.)?

Well, you probably say, the truth is that it’s a matter of balance; that managers need to weigh both factors (employer and employee) in trying to do the right thing.

True enough in concept, but a balanced approach suggests use of a carrot and a stick.

Signs of the “softie”

When it comes to doling out the company’s money easy-to-please managers believe in giving as many employees as possible as much as the company allows, with the expectation that recipients will:

  • Be grateful and work harder out of personal thanks
  • Be satisfied and not leave
  • Recognize you as someone who is looking out for them

These managers are kidding themselves and wearing rose colored glasses, thinking that their emotional pay decisions are going to deliver results that help them (the manager), and maybe even the organization (there’s that unfortunate priority again).

Why do managers make emotional decisions?

Managers have a choice, and what unfortunately comes naturally for too many untrained folks is the tendency to protect themselves.  Many still think of themselves as supervisors, not members of the organization’s leadership cadre.  In simplistic terms they still take the so-called “employee side,” versus the “company line” (that’s how they see it).

  • They want to be liked.  They want to be a friend as well as a boss.  They still remember sitting on the other side of the desk.  So they empathize.
  • They don’t want to make career-impacting decisions.  They’d prefer that someone else play judge and jury with an employee’s career.  Or let the performance figures speak for themselves (“numbers don’t lie“).
  • They don’t understand (or defend) the company’s pay program.  These are the ones who tell employees, “I wanted to do more, but HR wouldn’t let me.”  They fail to defend company policy on rewards, preferring to be seen as being on the employee’s side.
  • They’re afraid that someone would quit – because that might be a reflection on them as a manager.
  • It’s really about them.  Having employees unhappy for any reason usually means more work for the managers themselves.  It could mean extra attention to subordinate work (vs. their own), training replacements, doing the work themselves to fill in, etc.

These managers are not helping the organization; they’re not even managing.  What they’re doing is administering the pay programs as if they didn’t have a decision-making role to play as part of the leadership team.  It’s managing from a distance – being the disengaged leader.

For sure it’s not easy for some new managers to “flip the switch” and start thinking like one of the leaders of the organization.  But when they took on the mantle of “manager” they stepped up to additional responsibilities.  They’re no longer “one of the boys,” but now the boss of those “boys.”

Those who wear rose-colored glasses to make reward decisions are in truth ineffective managers, who over time will harm the organization through their inability to make the effective, objective decisions that impact the employees who work for them.

Managers?  They’re kidding themselves.

Dirt Under The Fingernails

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 25-08-2014

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God Complex, by angelofsweetbitter2009Do you have a pet peeve at work?  Something that, when it happens just bothers the hell out of you?  That can ruin your whole day?

I do.  In fact, I have several.  Here’s one of my most annoying poke-in-the-eye scenarios; the self-appointed or self-anointed expert.

Have you experienced the same?  Or perhaps to someone you know?  Some examples:

Management decides to hire a bright and shiny new MBA and then drops the youthful new employee into your department with a thud. The new hire is touted as the second-coming of Jack Welsh (GE) or some other management guru; someone who will know what to do, how to solve the department’s problems, how to get the business back on track.  Because they have an MBA, you’re told.

They’re usually paid a ton of money, at least in comparison to what’s paid to those who have to instruct them on how things are done here.  When you add in a touch of arrogance and self-importance you often have a recipe for internal conflict, passive resistance and eventual counter-productive results.

Why is that?  Resentment.  Too often what they know is what they have been told.  The employees see this, though management can look the other way.

Here’s another example

When someone is lecturing or offering advice about compensation issues, usually in a webinar, a workshop, conference  or even within a published article, I gauge the credibility of that advice, and the recommendations that usually accompany them, on the basis of whether I can take what’s offered at face value.

If the advice or recommendations is coming from someone with dirt under their fingernails, who has walked the talk and spent time in the trenches of dealing hand-to-hand with employees and their compensation issues, then I listen and take notes.  On the other hand, if the presenter has a progressive track record of college, advanced degree, consulting firm and then telling me what to do at work, I confess that I usually have a less positive reaction.

I’ve been burnt before by the lack of “street smarts” that plague the new certificate holders, academics and “wunderkind.”  So I don’t read those articles.  I don’t listen to those speeches.  Because in my view that’s not experience talking, that’s book learning and a view of common or “best” practice as studied by those who haven’t walked a mile in my shoes.  It’s “case study consulting.”

My father used to complain that college was teaching me “book stuff, not common sense.”  He might have been on to something.

When I fly, I like to see that the pilot has a bit of grey hair.  Gives me confidence that they’ve got some hours under their belt, and can likely handle themselves outside of the aircraft simulator.

For their part, a seasoned compensation practitioner is one who has been there, has tried different methods, has bumped their head a few times and has learned what works – and what doesn’t.  Even more important, they’ve learned the why of things.  They’ve dealt with practical issues, with employees as well as managers, and they’ve gained a perspective about what works in their particular organization.

Those who have only analyzed case studies in a classroom environment simply don’t have the depth and breadth of practical experience to advise on the basis on anything other than what they‘ve read, what someone else has told them.

Because the circumstances within my organization, the internal dynamics, the office politics, the management bias, and even the workforce culture are not the same as you would find in the next organization.  There’s no cookie cutter solution out there, nor off-the-shelf magic potion that works for everyone.  What I need is what will work for my organization, not yours and not some conceptual average “everyman” organization.

But that’s me.  You may see things different.

Likely you have your own pet peeves.

Sounds Like A Great Idea

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 19-08-2014

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Frog Wisdom, by liberalmind1012One of the most negative management stereotypes you’ll come across in the workplace is the “yes-man,” that weak-kneed subordinate who is always quick to agree with the boss.   This is an empty suit having no other opinion other than agreement.  Picture a nodding head and vacant smile.

In a similar vein, do you recall the old saying, “see no evil, hear no evil, speak no evil“?  The modern version of this adage describes one who looks the other way, who refuses to acknowledge and even feigns ignorance when confronted with practices they should otherwise say or do something about.

Do the compensation practitioners in your organization, including the one looking back at you from the mirror, provide objective and unbiased counsel to management, or do they sometimes simply offer support and justification for what management wants to do?

Do you stand up?

There are always opportunities to turn a blind eye / closed mouth to improper practices taking place in the organization:

  • Finance has lobbied Senior Management that the average merit increase next year should be x%, and you’ve been asked for your recommendation.
  • The performance appraisal process is poorly designed and administered;  rewards are often granted without legitimate justification.  And you say . . . ?
  • A Vice President wants to create a puffed-up Office Manager title for a long serving Secretary.  This would also entail a higher grade and promotional increase.

Are you one to stand up and be counted, or do you let these and other possibly contentious events wash over you without voicing concern?

  • Are your recommendations primarily based on competitive research, an understanding of compensation strategy and knowledge of business operations?
  • Do you question those managers who wish to grant rewards for the wrong reasons?
  • Do you strive to hold the line on meaningless titles that increase costs, create employee inequities and provide the company with little or no return value?

What’s the worst that can happen?

Perhaps you’re concerned that having an opinion out of step with senior management will damage your “team player” image.  That your career would suffer because you can’t get along with others, that you “don’t get it“?  Perhaps it’s easier to simply go along for the ride.

It’s my view that practitioners should provide the best advice they’re capable of, on the basis of technical knowledge, experience and seasoning with business operations.  Let management make the decision.  They have a perspective that’s wider than a singular compensation view, and it’s their company, budget, operations, etc.  Your responsibility is to provide the best objective advice possible, to ensure that decision-makers have their eyes open and understand the ramifications involved.

Life isn’t a tableau of  black-and-white images, but a series of swirling grays.  We should acknowledge that there are contingencies and alternative possibilities available.  But we should not temper either our judgment or our opinions solely on the basis of what the boss wants to hear.

Management tends to respect straightforward analysis and honest feedback.  However they won’t respect your input if it’s been tainted by political maneuverings or a “how many ways are there to say yes”? mentality.

Your job is to add value

You don’t have to fall on your sword career-wise to make a point, to stand up for yourself, to add value to the decision-making process.  Sometimes you just know that the direction management is taking is the wrong path to take, but that doesn’t mean that you should step away from doing your job.

One of the best ways to establish yourself as a valuable contributor is to have an opinion, and not be afraid to voice it.  Even when the management steamroller is moving and you have to get out of the way or be run over, you should always provide your professional input.   You can do this by offering options and alternatives for management to consider.  That’s where you’ll be able to present your own recommendations alongside the management point-of-view.

Get them thinking; that’s your responsibility and how you add professional value.  It’s also how you build credibility and an invaluable personal awareness with Senior Management.

The Dinosaurs Among Us

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 04-08-2014

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Do any of these employee-types sound familiar to you?  Perhaps you’ve come across one or more in the T-Rex, by Scott Kinmartinhallways at work.  Perhaps you work with someone like this. Perhaps you work for someone like this.

  • The technocrat with the pocket protector and ready access to multiple survey sources for analytical data on any given subject.  Always has a technical and often convoluted answer to questions.  You may not understand them.
  • The employee who administers a point-factor job evaluation system or performance management program like the processes are an untouchable, sacrosanct bible.  Definitions and point factors have been memorized and can be quoted at will.
  • The employee who understands more about compensation methodology and data manipulation formulae than the business dynamics of the company. They can explain a regression line and standard deviations faster than they can describe the main product or service of the company.

One dimensional thinking

These are the folks who have their eyes pointed straight down, walking the cautious step by step, not having a clue or a care as to what’s on the horizon. They’re heavily engaged with the technical aspects of their craft, with compensation methodology, and seem to their coworkers to be in a fog about everything else. They’re the so-called subject matter experts, at least as far as their technical analysis can take them.

But at the same time they may not be able to relate to the day-to-day challenges faced by line managers.  Instead of being problem solvers they find their comfort zone as data junkies who can show you the numbers, can point at the charts, but not necessarily can they suggest what to do next.

Don’t get me wrong, we do need these employees, as they serve a useful purpose to help understand the intricacies of our payroll, the competitive marketplace and the financial impact of various pay decisions.  But when we let impersonal analytics dictate our strategies, our day-to-day tactics in dealing with our employees, we tend to lose a quality of humanity that is critical to building within our organization a successful workplace culture.

In order to manage compensation, not simply administer the programs, practitioners need to understand the impact that the analytics can have on employees, on business operations and of course on the financials.  And a grasp of possible unintended consequences.

Time marched on

It wasn’t that many years ago that the compensation technocrats described above played a strong hand within their little kingdoms.  Management was mesmerized by the data streams, confused by the formulae, charts and graphs and more readily accepting of technical strategies that promised savings or an improved bottom line.  For their part employees tended to be viewed as blocks on an organization chart, or simply cells within a spreadsheet.  They weren’t actual people.

But these days most companies (not yet all, I’m afraid) expect more from their compensation practitioners. They expect to see a balance between technical abilities, familiarity with business operations, understanding of the employee perspective, communication skills and a capability to offer practical solutions that create a win-win atmosphere within the organization.

Increasingly the one dimensional technocrats are viewed as dinosaurs by a leadership that views their limited capabilities as too restrictive, too judgmental (the policy says, the survey says, figures don’t lie, etc.) and overly reliant on espousing tactics that others employ.  They struggle when it comes to helping their own organization solve problems and overcome challenges that may not be common outside of their own environment.

So, where do you fall in the grand scheme of things?  In an increasingly complex work environment you need to wear more than one hat, more than a single competency.  You also need to have one foot in the present and the other in the future.  Don’t live in the past.  The “good old days” are gone.

So have care.  Because if your colleagues, peers and even senior leadership ever start to think of you as a dinosaur they won’t be thinking of a T-Rex, but a lumbering Brontosaurus.

The Pay-For-Pulse Culture

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 27-07-2014

Tags: , , , , ,


Cathead, by mightyhorsePicture the scene: Your company doesn’t have enough monies in the annual merit spend budget to grant more than an average 2% increase to employees, so the powers that be decide that -“let’s give everyone a flat 2% increase and call it a day.”

Has this happened to you?  The practice is what some would call a “pay-for-pulse” strategy, where if you haven’t been fired on the date of the scheduled increases then you’re going to get a raise. Every warm body who occupies a chair will receive an increase, just because.  Individual employee performance isn’t taken into account, so the high performers will receive  the same 2% increase as Joe Average.  And as to Bob-the-Bumbler?  He’ll receive the same 2% as well.

And everyone is supposed to be happy.


But it happens.  So why is it that some managers think that such a giveaway tactic is a great idea?

  • It’s easy to communicate and administer.  Picture someone pushing an EASY button and all the changes are made, in an instant.
  • You don’t have to worry about performance reviews.  Oh, some organizations may go through the motions, but essentially the goal is to have a paperless exercise.
  • Managers won’t have to agonize over performance ratings.  Everybody receives the same treatment and no one has to be given a negative review.  Because let’s face it, no manager looks forward to that conversation.
  • Some advocates will actually convince themselves that they’re being fair to everyone. They’re not discriminating , not pitting one group against another.  We all work for the same company, right?  This same vein of thought believes that everyone on the receiving end will thank them.
  • Did I mention that it’s quick and easy to do?  No fuss, no muss.

Of course, this isn’t a tactic that you’d see in a pay-for-performance culture.  And certainly not where management is trying to develop the oft-desired  “high performance” culture.  In some ways this tactic actually encourages and rewards the opposite, as it’s the lesser performers who consider this a grand idea.  And why shouldn’t they?  It’s a great deal for Joe Average and an even better one for Bob-the-Bumbler.

But watch the exit door for the high performers.  Because they won’t be sticking around for long once they feel that they’re not being recognized or rewarded.  But don’t worry, as Joe and Bob will stay with you. They may never leave.

So have a think as you consider what it is that you’re really intending to recognize and encourage with your discretionary reward dollars.  If it’s simply tenure, if it’s saying thanks to someone for sitting in a chair for another year, then I suspect you’re wasting a lot of money.  And you won’t get a lot of improved performance for your efforts.

You’d be better served rewarding what someone has contributed to the organization (performance) while they were occupying that chair.  Unless of course you think that every warm body has a right to an annual increase – regardless.

So take your choice; pay-for-performance or pay-for-pulse?  What if it was your money being taken out of your pocket?

Broad based reward strategies don’t often focus the reward where it will do the most good, where it will benefit the company the most.  Instead, picture the fellow opening a window and tossing out dollar bills into the wind, all the while chanting,  “I hope this helps.”

It won’t.