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The Ides Of March

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 22-01-2016

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Compact Calendar, by Joe LanmanSome might think I’m a bit early for this topic, but I figure better early than late. Early gives you time to think and react. Later on, if trying to seize on an idea that’s dropped back into your rear view mirror (coulda, shoulda, woulda), that tactic would rarely work.

Why point at the Ides (15th) of March? Because during a normal fiscal year / calendar year compensation practitioners usually have from approximately March to September (6 months) to work on something new, before their automatic pilot season starts again.

Right now (January and February) most compensation folks are in the midst of incentive payout calculations, annual performance appraisal processes and the implementation / communication of the new year’s reward program(s). They’re up to their eyeballs with work, wrapping up the old year and getting ready for the new. Fresh ideas are going to have to wait.

Have you ever tried to talk with an Accountant during the first quarter of the year? They’ll have no time to talk about new systems, or processes or simply new ways of doing their job. “Talk to me after tax time” is a common response.

Automatic Pilot

Later in the year, usually commencing after Labor Day in September, for most of us the automatic pilot season of annual activities will begin: competitive job market analysis, tweaking the annual compensation plan recommendations, developing communication strategies, launching the annual merit review cycle and multiple variable pay (STI) plan assessment and payment processes. And of course what follows is the busy season of January and February already mentioned.

Each of these processes and projects occur every year, and cumulatively they take all the air out of your schedule, especially in the fourth quarter and cusp of the new year. Those exciting fresh ideas percolating in your head are going to have to wait.

What Are You Gonna Do?

So when March finally does roll around and you have more (or less committed) time on your hands, what are you going to do? Some thoughts from a potentially long list.

• Redesign the (management) incentive plan: And / or other variable pay programs may need a tweak or an overhaul.

• Develop a compensation strategy: Do you have one? You should have one, or at least a well thought out strategy for how the organization plans to get the most out of that huge payroll expense.

• Reassess the organization’s performance management program: Another favorite HR kicking boy, but one that deserves your attention. Are you properly assessing performance, and how does that process link to individual employee rewards?

• Correcting a problem: What are your dashboard metrics telling you? Are the numbers going in the wrong direction for one or more elements of your reward programs? Perhaps it’s time to investigate and recommend solutions.

• Clean up the job descriptions (ugh): Everyone’s distasteful task, but as a foundation document for multiple HR programs maintaining accuracy and completeness is a must. I put this near the end because, let’s face it, it’s one of the last projects that anyone in HR wants to deal with.

• Focus on some other hot button of discontent, friction or out-of-control expenses: Maybe it’s something your boss wants you to focus on, or it’s a new buzz phrase program that being talked about at all the conferences and webinars, or simply something you’ve always wanted to flesh out and experiment with.

If you don’t start working on new stuff (improvements, efficiencies, and even new ideas) soon after the Ides of March, your window of opportunity will slam shut on you all too soon. Your available time will be up. And then you’ll be looking at 2017.

The Third Wheel In Recruiting

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 06-01-2016

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Screaming Kitten, by GalgenTXOne of the multiple hats I wear as a Compensation Consultant is working with mangers in transition, helping prepare them for their next employment offer. We look at ways to improve what the employer has put on the table, to ready candidates for negotiating the best package they can.

A common misconception among these managers is that the interview process involves only the internal recruiter and the hiring manager. A more accurate picture is that, when it comes to developing an employment offer for managerial positions the employer’s Compensation function often also occupies a critical seat at the negotiating table.

The Recruiter: The face of the company. These folks screen the candidates, present them to the hiring manager, and as necessary represent the candidate in late stage negotiations. They don’t create the employment offer, but deliver it.

The Hiring Manager: He who makes the call. Here is the person with the job opening, the decision-maker as to which candidate is selected. They hold the purse strings in the form of department budget, and they have an offer number in mind.

Compensation: Thumbs up or thumbs down? This Analyst, Manager or even Director often plays the role of the gatekeeper or policeman, the one at the table with the policy manual in the left hand and a spreadsheet of employee pay practices in the right.

Like a branch of the federal government, Compensation serves as a check and balance against the other two players; the objective advisor intent on preventing a blind focus on an individual candidate, to the possible detriment of existing employees or the business. Here is the “bad guy” cop who reminds others of budgets, precedence and internal equity issues.

A Necessary Evil?

Once you reach the management level it’s common practice for the recruiter and the hiring manager to talk with someone in Compensation to help determine (or simply review) an appropriate offer.

Firstly it’s likely a matter of policy, a double-check requirement that for management roles HR must be involved with setting the compensation package.

Then there’s the matter of heightened sensitivity, where a limited number of key jobs creates an environment of greater visibility and individual impact. The company can’t afford to make mistakes here, as the health of the business itself may be at stake. Even senior hiring managers often look for support when they seek to make a critical employment decision.

What Compensation Does

When dealing with management offers Compensation would consider:

• Where the suggested base salary fits within the hiring range, vs. candidate expectations, the internal budget, the previous job holder and how large an increase it might represent for the candidate.

• The salaries of similar or peer job holders and those at the next level, to ensure the new employee doesn’t create compression issues with those in larger roles.

• As may be necessary to assist with negotiations, to suggest where opportunities exist to improve the offer without harming internal equity concerns, creating damaging precedence or budgetary difficulties.

Compensation would typically not consider:

• Whether the candidate is qualified. They wouldn’t conduct interviews or have any face time at all.

• Organization issues such as title, reporting relationships or job responsibilities. Any of those issues, and some can be problematical, should be dealt with before candidate selection.

• Wouldn’t compare the candidate against other employees, except for the potential of internal pay equity.

• Typically would not have the authority to prevent an offer, but would have the responsibility to give the offer visibility beyond the hiring manager if a concern is raised. In other words, if consensus cannot be reached and the hiring manager is adamant, it’s time to raise a red flag for a higher level arbiter.

Compensation doesn’t create the offer either, though they may make suggestions. More typically they react to what the hiring managers are planning.

Compensation’s role therefore is one of protection, of making sure that everyone’s eyes are open as to the ramifications of whatever is put on the table for the candidate to consider. A winning formula is the goal, where internal equity has been maintained and the new employee is excited and engaged.

Are You Sure About That?

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 06-01-2016

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God Complex, by angelofsweetbitter2009That’s what a client asked me the other day. The SVP of Human Resources was mulling over my market pricing report when he said, “These summary averages tell me how my pay practices compare against my competition, right? And with these individual job comparisons, they tell me what the market is paying against my jobs, right?” Then a pause, followed by, “And you’re sure about these figures?”

In other words, the client wanted a guarantee that what he was looking at truly reflected the competitive marketplace for his organization. So that he could take my word to the bank. And fall on his sword if necessary. Because he has the answers.

Ahhhh, but it doesn’t work that way. There are no ironclad guarantees, no hand writing in the sky, no finger pointing to an “X.” Practitioners who analyze compensation surveys can only report on what the sources show. It’s how they, and their client interpret and ultimately utilize those reported figures that will tell the tale for the organization.

An Imperfect World

Let’s consider the possible variables that prohibit you from making a pinky swear regarding the figures you’ve just shown to management.

• The client may be interested in what companies X, Y and Z are paying, but unless they’re prepared to sponsor a custom survey what they’ll get instead is a broader view that displays what many organizations are paying – some of which they may not be interested in.

• Or perhaps management is only interested in “like” industries, or only like revenue size or like geography (or, they want all elements at the same time). However, matching data slices may not be available. You may have had to pick and choose your points of comparative analysis.

• Surveys never capture what everyone is paying, but only a representative sampling.

• An oft-forgotten aspect of surveys is that the input completion process (that dreaded questionnaire) is typically presumed by those on the receiving end as a virtuous document well scrubbed of any errors. Probably not. A little garbage always slips in.

• Clients tend to think about what the market looks like today, while even the latest commercial surveys are only reporting data that was captured six months ago. And a typical aging process uses a flat growth percentage figure for all jobs; so some could be overestimated, or the opposite of what things look like today.

• And if the client’s organization has caught the infection called title inflation, the job matching exercise might lose a bit of precision.

So the figure you’re looking at may not be quite as bright and shiny as you’d like. You’ll still have to work with it, make sense of it, and apply a dab of professional judgment. Use it less as an “x marks the spot” and more as a “let’s move in this direction.”

What To Do

All a practitioner can do is to present the best information that’s available. That information should be used by the client as part of their decision-making process (competitiveness, structure change, merit increase process, etc.), not as the whole and sum. Survey figures should not be considered the answer, because they’re not.

Unless of course your compensation strategy is simply to follow the leader, whatever everyone else is doing, or whatever the surveys say.

When They Ask For A Guarantee

When management wants some sort of guarantee that what you’re showing as the marketplace in your analysis is really the market, the best tactic is to take that opportunity to educate them on how surveys work; what they can tell you and what they can’t. Scrape off a bit of the mystique of precision that often surrounds how commercial surveys are marketed.

Because there are no guarantees. And you can only be as positive about those survey figures as your professional judgment allows.


Is Performance Still Important?

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 08-12-2015

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White stone among black, by CyronHave you ever wondered why some employees in your organization are recognized and moved upward, while others with more impressive credentials, experience and achievements seem to stagnate ?

There’s a reason for that counter-intuitive phenomenon; senior management may have a “star chamber” or informal clique that anoints some employees while sidelining others.  Which explains why leadership mediocrity is sometimes overlooked, why personality trumps achievement and better qualified employees can be passed over for promotion.  For the select few, middle-of-the-road performance is not a barrier to success – like it is for the rest of us.

Not exactly what you hear in Management 101 is it?

What you’re witnessing is an evolution of the informal pass-fail rating system that companies have used for generations to decide whether an employee is “one of us.”  Those deemed worthy receive a “get out of jail card” that boosts their career.  Those lacking sponsors are categorized as having questionable value and are liable to suffer a fall at the next organizational bump in the road.

Do you remember the “in crowd” from your high school days?  You may not have escaped after all.

It’s all about P.I.E.

Psychologists have identified several human factors that describe an employee’s ability to relate to their work environment.  While each varies in importance from one organization to another, their combination has a critical impact on an employee’s likelihood for success.

  • Performance: Your demonstrated ability to perform your job. Do you achieve results?  The rating scale ranges from wonderful to woeful.
  • Image: Do you “fit” within the organization?  Is the image you project (personality, interests, clothing, demeanor, etc.) accepted by the rest of management?  This rating scale ranges from “One of us” to “One of them.”
  • Exposure: To what extent are you known or would be recognized in the hallways by senior management?  Who are you rubbing shoulders with?  This rating goes from “You are known” to “Who?”

The Way it Was

It wasn’t that long ago that Performance was King; that no matter what eccentricities you brought to the job, as long as you performed well no one bothered you.  Idiosyncrasies and personality quirks were overlooked; “Oh, that’s just Bob”, you’d be told.  “Don’t mind him.  Just deal with it.”  Your value was measured by getting the job done.

Training classes would use a “scruffy-looking dude” as an example of a brilliant engineer buried beneath a beard, long hair and mismatched clothes.  Such employees possessed little in the way of social skills, no interest in office politics or traditional business hours, and never wore the company logo.  Their job performance was their defining identifier.  It marked them as a valuable human resource.

Image could be important, but was considered more as icing on the cake, not the critical ingredient.  Exposure was even less important, as long as you performed.  “Being seen” was more for those who lacked a strong performance record.  They were the ones who needed the help and support of others.

The Way It Is

Today, good performance is not enough to ensure success.  You must also be a “player.”  You must be able to fit in, to blend with your other playmates, be liked as a person, adroitly dabble at office politics, be seen with the right people and have the same outside interests.  Your capabilities shouldn’t be a challenge to your boss.  How you dress is scrutinized for the image you present.

If you don’t perform well and you’re not in with the right group your career with that firm will suffer.  You’ll shrivel on the vine, if not be ultimately chopped off.  However, if you’re considered to be part of the right group, that association will step in to help should your performance weaken.  This assistance can vary from softening the blow to overlooking shortcomings to shooting the messenger on your behalf.  Club mates stick together.  They circle the wagons when attacked.

What to do?

Sound fair?  That’s the way it is when Performance is valued less than Image and Exposure.  Should you find yourself working for an organization where your personal interests and hobbies are valued more than performance and results, your options will be limited.

  • You can try to re-invent yourself according to someone else’s value system
  • You can try to stay under the radar screen, lest you be judged
  • You can try to change the culture
  • Or you can leave

If you believe that your job performance is your best calling card, that employees should be measured and weighed by their contributions, you may need to reconsider the long term prospects of your current environment.

Enabling An Anti-Performance Culture

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 23-11-2015

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See no evil, by allyaubryWhen considering an organization’s merit increase process, a common complaint is, “we have too many employees rated too high.”  Which means the performance rating distribution curve is skewed.  Too many employees walk on water, while too few are not carrying their own weight.

What’s Normal?

A “normal” distribution curve of performance ratings, using a typical five point scale,  looks something like this:

  • Distinguished: Up to 10% of employees
  • Superior: 20% to 30%
  • Fully Successful: 60% or more
  • Needs Improvement: 10% to 15%
  • Unsatisfactory: Less than 5%

The descriptive language differs between companies and percentage guidelines vary as well, but you get the point.  Most performance ratings would normally be expected to cluster around the middle, with smaller percentages moving out to the extremes.

Is this how your company scores employee performance?  Don’t be surprised if it doesn’t.  The pervasive problem that fuels inflated ratings can be boiled down to a single question; “what employee wants to tell their mother that they’re average“?  We all think that we’re achievers.

And it’s worse at the top.

The Trickle Down Problem

The problem of skewed performance ratings usually starts with how a company’s management treats themselves.  Leadership sets an example in performance assessment that’s inevitably  replicated by the rest of the population, for good or ill.

Usually it’s for ill.

Management tends to consider their performance using a different measurement stick or justification than the rest of the organization.  Actual performance seems to be less a rating criteria than you would expect.  Sometimes it’s overlooked if not downright ignored.

Let’s take a look at some common management reasons for skewed performance ratings.  How many have you seen?

Entitlement:  When management feels that at least a portion of their annual bonus or merit increase is due them, “just because.”  It’s been 12 months and they feel entitled to receive their annual reward.

Feel good: When you want the employee to feel good about themselves and the company.  When you want to recognize effort instead of results, or when the company has had a tough year and the employee has “hung in there.”

Retention:  When the rationale is that the company  has identified a particular employee as a talent that needs to be retained.  This card is usually played when the reward process coincides with a reorganization.

Leaders need competitive pay: This is a fall-back position for the desperate, when performance arguments don’t work.  In order to retain leaders the company has to ensure that their pay is competitive.  This is not about performance at all, but keeping up with the marketplace.

Cannot use the rating scale: Here is a problem as old as the performance appraisal process itself.  Some managers have a difficult time rating an employee less than “average.”  Excuses are legion, but the result is that objective assessment takes a back seat as almost all employees are rated average or above.  And if marginable performers are bumped up into “average,” how do you think the truly average are rated?

Leadership is always rated higher than the regular folk:  This one is rarely voiced out loud – though repeatedly we see the results in the statistics.  If you’re a leader and not being readied for termination, then you must be pretty good.  Having poor performing leaders is a strong criticism of senior management, and we can’t have that!

What Can You Do?

Training sounds like a nice problem resolution strategy, but is often a throwaway thought – like “let’s push the EASY button and then go to lunch.”  In my experience behavioral change rarely results from sitting through a classroom session or by sending out a bunch of memos.

You need a bad guy.

You need to inject a healthy dose of discipline into the performance rating process.  Calibration sessions are useful, but you need someone in HR and at the top of the organization who demands a performance-related reason for each rating.

Someone has to say “stop!” when ratings no longer make sense; when they don’t correlate with how the business performed; when appraisals are poorly written, and when excuses trump objective assessments.

Lack of managerial discipline enables bad practices to continue, to even flourish and to spread throughout the organization.

That culture change you might be hoping for could morph into the very opposite of your goal; you could be developing an anti-performance culture.

The Muse On My Shoulder

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 10-11-2015

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Friday Cat Photo, by jim_mccullochPeriodically I’ve been approached by colleagues, clients and casual acquaintances, who ask about my compensation writing; why I do what I do, what’s the inspiration for my subject matter (my muse) and whether I have a “message” for the compensation and Human Resource practitioners out there.

And the best question of all is, “how do you get people to read what you write“?

So I thought I’d try to answer.

Why Do I Write?

This is an easy one.  It’s because I have something to say, and God has given me a modest ability to connect sentences into coherent thoughts and tell an engaging story.  But there’s more.  While I was stepping on all kinds on nasty stuff in the minefield I called a career, I had no one to rely on for practical advice.   No one sitting on my shoulder to whisper good thoughts.  Most of the self-help books, recordings and even conference speakers I experienced seemed to drone on over conceptual blue-sky ideas and (for me) unrealistic initiatives.  Stuff that I knew the boss would have nothing to do with.  Ideas that I wouldn’t be allowed to convert into actions, or even plans for action.

The reality of the workplace seemed very distant from the idealistic preaching of the self-helpers.

Call it a form of giving back, or of simply sharing the benefits of my experience, but I believe that there’s a lot to be learned from someone who has walked the path ahead of you.  The intent of my ramblings is to help the practitioner with down-to-earth common sense suggestions in straightforward language, with an added flair for understanding what the reader is facing in their own workplace.

Am I always right?  Probably not, considering the wide audience I’m talking to.  But the “right” wine isn’t right for everyone, is it?

And the writing is fun too.

What’s My Inspiration?

I start with mistakes.  I’ve made them, and hopefully have learned from the resulting bruises and headaches.  Over the years my bosses made mistakes; some learned a valuable lesson over time, while others repeated their judgment errors ad infinitum.  And then you have the experiences of my global consulting clients who have suggested constructive ideas to improve the daily lives of compensation practitioners.    All have served up a cornucopia of story lines.

Ideas come to me in the shower, while working outside, or even when driving the car.

Often it’s the use of flawed policies, procedures and every day practices that encourage me to say, “Wait a minuteMaybe there’s a better way.”

Why Do They Read?

This is the hardest of all, and perhaps I’m not the one to ask.  Why are you reading this right now? would be my counter question.  I’ve been told many times that (for some) my writing is enjoyable, informative, thought provoking and down-to-earth.

That’s not to say that everyone agrees with me, certainly not, but if what I have to says gets the reader thinking, that’s all to the good.

I prefer to think that I ramble on for the practitioner out there, not the theorist or conceptualist.  I have something to say to those with dirt under their fingernails, who live in the trenches, struggling to do the best they can.  I write to suggest timely advice, something you can start or stop doing right now.

People have said that my thoughts have made a difference, that it was good advice that they could implement  right away.  The best compliment of all.

So that’s my epitaph; I write to help.


Caveat: No matter the length and breadth of my compensation experience I am neither all-seeing nor all-knowing.  I am but a product of my training and experiences, and those experiences likely differ to some extent from many of you out there.  Different industries, different companies, different bosses and different working environments, when blended together provide different perspectives to similar challenges.

Which is why I don’t present myself as the “answer man,” but rather as someone who has seen a lot, done a lot, and experienced a multitude of different scenarios.  So I “suggest” what you might find behind Door # 1 and Door # 2 when you have a decision to make, but rarely would I say that “this is the way it has to be.”  Because it doesn’t have to be, and it’s your decision to make, not mine.

I want to make sure that your eyes are open.

And maybe suggest a better way in the process.

So now you know.

A Pebble In Your Shoe

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 21-10-2015

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Stony Lonely Shoe, by Mark MichaellsFor as long as I’ve worked in Human Resources the common solution most often suggested by all ranks and segments of the population for a host of employee issues was to simply . . . pay more.

Yep, just push that EASY button of simplistic, no-thought, one-size-fits-all logic, and like a snake oil concoction sold by con artists the promise was that you’d start feeling better tomorrow.  Or as soon as those making the promises have gotten safely out of town.

Why is it that some people always think that the reason behind almost every employee issue is that the pay is wrong?  Simple and uncomplicated reasoning, I suppose.  Just the way we like to solve our problems.  Therefore the logical and easy-to-understand solution is to pay more.

Like a pebble caught in your shoe, all you have to do is flick your problem(s) away.

Life is More Than A + B = C

Sometimes though, you really need to look beyond the simplistic to find the REAL problem.  Placing band aids on symptoms will not be a cure-all for what ails you.  Instead, by masking the hurt you might be making things worse by focusing in the wrong direction.  Really harmful problems need time to fester before they erupt into crisis, so band aids often become misguided placebos to make one think that things are getting better.  Or will soon.

When managers complain about a sales incentive system, the answer could be the compensation.  It could also be territory size, unreasonable targets, poor product quality, administrative errors, inadequate training, etc.  It isn’t always about pay.

When turnover statistics worsen, the organization’s supposed low pay becomes the “kicking boy” for why employees have left.  However studies have consistently shown that to be a false logic, which if left unchallenged could direct attention away from the real problem.

Many of my clients have assumed that their problem was pay; that they should be improving pay in some fashion.  But that isn’t always the case.  In fact, more often than not the problem isn’t pay.  However, using pay as an easy target of complaint is simple to explain, offers the chance of “more for me” and often succeeds in getting employees and even senior management to mindlessly nod their heads.  Because perhaps they don’t want to dig a little bit deeper.  Perhaps they just want the immediate problem to go away – and they think that more pay would do just that.  No fuss, no muss.


The Ease of Chasing a Distraction

Many times pointing the finger at pay is serving up a distraction for those whose primary interest is in dealing with a quick fix.  It’s similar to a dictator who risks war with a neighboring country simply to hide the fact that their own economy is near collapse.  Illusionists call it a sleight of hand.  Those using this practice will have you looking at everything and everywhere but where the real culprit is – or should be.

So when your foot hurts, don’t rush to throw out your shoes.  Think about it.  Maybe it’s only a pebble that could easily be removed.  But maybe the problem isn’t what you think it is.  Maybe it isn’t what you want it to be.  Maybe the problem is more ingrained within the organization, more complex and doesn’t offer a quick fix solution.

To make things right maybe you’ll have to conduct some research, spend a little time considering possible ramifications, unintended consequences and roll-on effects.   So talk to affected employees, gather a wider perspective from those closest to the sore points, delve into the weeds, get behind the symptoms and understand the root causes.

Because offering more incentive dollars to the sales force when quotas are unreasonable isn’t going to get you anywhere.

So don’t simply kick the can of problems down the road, because that can will roll to a stop and you’ll be facing the same challenges again and again. Problems will not go away by themselves.  Instead, if left ignored they tend to worsen.  And if your quick-fix solution addresses only a symptom and not the real problem, then you’re wasting time and money while what really ails you will fester and grow ever more difficult to resolve.

You may think that your problem is like a pesky little pebble in your shoe.  Have a care that you could be seriously wrong.

I Have The Number!

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 06-10-2015

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Curved Perspective, by Joel KramerPicture the scene: Someone is hurrying down the hallway at work.  Maybe it’s someone you know, a client of yours, or one of your managers.  They’re waving a piece of paper that’s gripped in their hand.  “I have the number,” you hear them shout excitedly.  “I know what we should be paying.”  And off they go toward the executive suites to tell senior management “the answer.”

A bit dramatic, you say?  Perhaps.  But that’s the scene that plays in my head whenever someone I’m dealing with is more concerned about having a market priced number to show, more so than understanding the validity of that number.  Especially if that number fulfills a preconceived or desired expectation.

I’ve seen it happen again and again.  It’s as if Moses came down from the Mount with the tablets, only this time he held eleven commandments, not ten.  That 11th directive from on high is the market figure you’ve been looking for.  The answer to your quest to discover “how much?”

Only, is it?

Market Pricing is Not an Exact Science

Repeat this after me.  Market pricing is not an exact science.  No matter what the vendors claim about their proprietary software, their point evaluation systems or their convoluted survey source documents.  No matter how much you paid for that survey.  Subjectivity still rules.

The question you want answered is, what is everyone else paying for the position I’m interested in?  Unfortunately, your survey sources almost never tell you that. It’s not going to be that straight-forward.  There are too many variables at play.  Which is why relying on an attitude of “anyone can do this” often results in an arithmetic number, but rarely one that you can rely on.

Which is why you need compensation practitioners to sift the wheat from the chaff and to interpret the Rosetta Stone of survey data.

You have to listen to the qualifiers that every survey source presents.

  • How many companies have matched the subject job? Is the job match 100%, is it close or are we talking about comparing similar competencies?
  • Is the reported figure a good example of what your competitors are doing?  Or the universal everybody?
  • Is the survey source(s) reliable, do they have a good reputation, or is the data self-reported off the internet for a few bucks per job?
  • Is the data all-industries or segmented to your industry or SIC code
  • Does the figure you’ve been given reflect national data, regional or is it localized?
  • Your business has $100M in revenue.  Does the survey show you data from similar sized organizations?
  • Is the data based on incumbent information, or on a series of formulae and algorithms that only projects a likely figure?  If job A pays X and job B pays Y, then job C (your job) likely pays Z.
  • When you told senior management the source of your “answer,” would they nod their head in agreement, or would they frown and ask, “who?”
  • Finally, do you have the answers to the questions I’ve just posed?

So when you consider all the variables involved we’re likely looking at the analysis of a marketplace that requires a bit of interpretation.  Are you up for that?  Or are you ready to grab any figure and start running?

Are You Willing to Fall on Your Sword?

How confidant are you with the market figure you’ve been given?  What if senior management starts asking even a few of the above questions?  Ask yourself, has the survey source(s) suggested any qualifiers to the data that could impact how the information is used?  Have I factored those qualifiers into my “answer?”

Because once you start waving that paper about you’ve become Moses to your leadership group.  They’ll be looking at you to show confidence in what you’ve just presented.  You’ll have to stand with that answer.

So have a care.  Sometimes a little extra analysis is necessary.  Sometimes the initial figure needs to be double checked.  Sometimes you need to qualify the data to better read how market subjectivity may suggest more of a range of figures than a precise $73,212.

And sometimes you don’t really have an answer at all, but only someone’s guesstimate.

Is that good enough for you?

I Have a Pet Peeve

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 13-09-2015

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Fractalius Kitty Kitty, by peasapI’ve worked in Compensation my entire career.   Spent most of it in Corporate America and now for a bunch of years as a global consultant.  I love what I do, but at the same time can acknowledge that it’s not all fun and roses.  There are dark times.  Not every day ends with a smile.

You see, like most of you out there (ok, probably everybody) I have a pet peeve – a behavior or attitude that happens at work and irritates me, big time.  Well, to be honest, I have more than one peeve.  I have several.  I suppose that the longer you work in this field the more you find yourself shaking your head at those “muggles” that you have to deal with.

How about you?  Be honest.  As a compensation practitioner what bothers you most about those you’re supposed to be helping?  What are you exposed to that just drives you nuts?

Go ahead, you can vent.  We’re all friends here.  Likely we all have stories to tell.

For the sake of space I’ve kept my irritations to a small list.  How many times have you experienced one or more of these scenarios?

  • How hard can it be?  Managers with the attitude that you can just grab any compensation survey, flip to the page that matches the job . . . and there you are.  Anyone can do it.
  • We don’t need a job description:  Likely because they didn’t write one, and don’t want to now.  “Use the title in your analysis,” is a common refrain, or “doesn’t everyone know what that job does?”
  • Just give them more:  Some folks have a simple answer for every problem, except that there isn’t a money tree planted behind the building.  But hey, don’t sweat the details.
  • How do I fill out this form?  From those who can’t be bothered with performance appraisal forms.  They know the answer (score / rating) already, but just need help in back filling this %$#@!& form.  We’re all paper pushers in HR.
  • Can’t you just convert the currency?  A basic no-no in international compensation, but I still hear it asked, over and over again.
  • Give everyone 2%:  With small merit budgets it’s too inconvenient to go through the motions of a performance review cycle.  Just push the EASY button and let’s go to lunch.  Little thought is given as to how the high performers or even Joe Average will respond.  As if all the consequences are good.
  • That’s not what the market is paying:  Your data is wrong.  They’ll tell you that they know a guy who makes more, or they Googled higher rates on the internet, or they’ll just cop an attitude of “that just can’t be.  Prove me wrong.”
  • I need more money:  Whatever is available isn’t enough.  The reasons can be as myriad as snowflakes, and are not always business-related, but somehow the “system” just isn’t responsive to their needs.  So you should fix it.
  • You’re not being flexibleThis is my personal favorite, where any answer but the one they want to hear is not the right one, which proves how rigid you are in your thinking.

No amount of training, self-help courses or even hand holding explanations seem to stem the tide of repeated aggravations from colleagues, clients and even strangers on the street who don’t have a clue.  Though they say and act as if they do.

So what do you do with your pet peeves?  You grin and bear it, keep pushing that boulder up the hill and fix a polite smile on your face.  It’s the price of being a compensation professional.

Thanks for listening.

A Tale of Two Markets

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 02-09-2015

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Bureaucrat, by Delmarva.DealingsAs every Compensation practitioner knows, sometimes there is no straight answer to a question being posed.  However, the boss asking that question still looks to you for not only what the tea leaves say (surveys), but what should they do about it.  The answers you have though, they often aren’t black or white, but instead show lots of grey.

But management doesn’t like grey.  They don’t want you to sit on the fence.  They want you to make a call.

What do you do?

Consider This Example

A survey shows that there are 350 nonprofit organizations in FL, and the base market rate for the XYZ position you’re analyzing is $150k.  However, that same survey indicates that there are 36 FL organizations that are same size as yours, and that market is paying  $125k.

When you consider the variations of data, you see that . . . .

  • Florida is a large state.  Where are these 350 organizations located, compared to your site?
    • Does the survey tell you this?
  • These organizations will vary in size (operating budget, employees, number of sites, etc.) a great deal, from much smaller than you to much larger
    • Does the survey segment data according to size?
  • How many of these 350 organizations are in the same “type” of nonprofit business?
    • Does the survey segment data according to type?
  • If the data is segmented, which segment is more important to you?  Can you ignore others?
  • Do you really care about variations, or does the answer with the most robust data win?

Management is waiting.  How do you answer their question about the market rate for XYZ?

Depending on the circumstances your answer might be $150k, or under other circumstance you might say that the answer is $125k.  Both can be considered correct, dependent upon how you read your data sources.  But for the incumbent employee, their market is the $150k.  That’s their view of how they should be valued.  That’s their view of what they can get with someone else.

The Wannabe Survey Analyst

How your organization defines its view of the competitive market is important, but most folks outside of Compensation will let that distinction slip right by them.  Grab a survey, flip the pages until you get to the subject job and point your finger at the top-of-the-page figure.  There.  Done.  How hard was that?

I’ve seen it done.  Likely so have you.

The trouble with this approach though, is that’s it’s all too easy to miss the mark.  If you’re a $50M nonprofit food distribution organization in Central Florida, how important is it to know, and include what a $150M nonprofit disability organization is paying in the Miami area?

The trick for the wannabe analyst is that often the available survey data doesn’t make enough distinctions in the figures being reported.   There may not be enough data (statistically valid) for $50M nonprofit organizations in the Central Florida area.  Never mind food distribution.

So data on that narrow slice of “same organization” criteria you’re looking for is simply not available.

That data on the top of the survey page may not represent your organization at all.  Or you could get lucky.

Broaden Your View

Look at your “market” from two perspectives; 1) what are other organizations – just like you – paying for a subject position, and 2) what are others paying in an organization sized like yours.

You can even add a third component; what about your geographic area?  What you have then is a composite of data points that require interpretation and explanation.  So perhaps your response is buried in the midst of the survey page, not at the highlighted top.

Just to make things a bit more complicated, another consideration for you is the difference between the employment market value of a jobholder (what pay can they achieve out there) and what organizations just like you and sized like you are paying.

This is the “it depends” element of compensation that drives non-practitioners crazy.

I can see their point.