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One Day At A Time

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 23-02-2016

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Advice, by SoloCan I have a show of hands? How many of you out there have ever attended a conference or seminar where the speaker really inspired you? Where you were filled with ideas about how to transform your work environment or reward programs, or perhaps your approach to your job or career?

Most of you, right?

Now, how many of you actually managed to keep the light of inspiration and eager anticipation burning bright one week after returning to work? How about for two weeks?

Ok, not many hands still raised. Bummer.

Reality Sets In

The problem that so many of us face is that there’s often a world of difference between the ideas inspired by a conference speaker and the realities of life where you work. Somehow what you hear often doesn’t relate to the practical world you live in.

So what usually happens when you return to work gung ho to transform your workplace and invigorate your career?

• You find that no one picked up the ball while you were away. So you’re immediately tossed into a maelstrom of catch-up work, putting out fires and in general just trying to get projects and activities back onto an even keel. That shiny participant binder sits on your desk, ignored.

• The boss doesn’t want to hear about the great ideas you brought back with you. There’s work to be done and you’ve been gone too long already. Or perhaps the perception was that the seminar was a boondoggle get-away and the boss doesn’t take the subject matter seriously. bit of a brick wall there.

• You’re reminded that the work culture is more interested in maintaining its self-interest and status quo, and as a result tends to stifles new ideas. You can’t find a sponsor to support your initiatives. “If it ain’t broke don’t fix it.”

• Within a few weeks you start to think of that seminar or conference as more of a vacation with good memories than a catalyst for action. The daunting reality of what it would take to initiate real change has dampened your enthusiasm to a whisper of what it had been. Dust starts to gather on the participant binder.

Meanwhile the conference speakers you enjoyed so much have moved on to motivate, excite and invigorate the next batch of attendees – and the cycle of life goes on.

But it doesn’t have to be this way.

One Day At A Time

Let’s presume for a moment that your position on the organizational ladder is not at the top, that you cannot effect change simply by dictum: “Make it so!” What you’re likely left with as a strategy then, is to focus on incremental change. Get that first down or punch out a single hit, vs. throwing for the end zone or swinging for the bleachers.

Some practical suggestions for you to consider:

• Take little steps: If you know the direction you want to take (changes in policies, procedures, behaviors, whatever) start moving in that direction in small ways vs. abruptly shaking things up with big ideas. As examples you could start collecting data (metrics), revise forms to be more user friendly, increase procedures to create more transparencies; the list of minor targeted improvements can be endless.

• Educate decision-makers: Get the decision-makers on your side by talking to them, explaining your ideas, starting with the basics. Do not assume that they understand the foundations of your profession. Leadership needs to be brought beyond sound bites and talking points to an understanding of compensation issues that affect the organization. If senior management doesn’t know they have a problem, and the resulting business impact of that problem, why should they listen to your “solutions?”

• Develop your own strategy: Whatever it is you wish to accomplish, plan out the steps you’ll need to get there; Who needs to be on board as supporters, what (and who) are the barriers to success, what has been tried before, what are the likely challenges? You need a plan of action that, when properly followed can get you to the desired end-state.

• Communicate, communicate, communicate: Don’t try to recommend changes from the safety and anonymity of your office or cubicle. Get out there and interact with clients, sponsors and even resistors. Whether it’s talking to groups, preparing white papers on relevant topics, or simply exposing the dark corners of bad practices / behaviors, you need to focus on your message and repeat it, over and over again. Always be prepared to (visibly) talk up your message.

• Watch for glitches: They are everywhere, those mistakes, unintentional consequences and passive resistors just lying in wait. So be ready. No plan is perfect, no one is mistake-proof. Ask yourself, what can go wrong? Where do we expect complaints? Then prepare your response in advance. Make it part of your education / communication campaign.

Becoming a catalyst for change when you can’t wave a magic wand takes time, takes patience, and takes a large dose of discipline. So anticipate that there will be setbacks and disappointments. Then learn from your mistakes and carry on.

Just take one day at a time.

Then maybe then next year you can share your own experiences at one of those conferences. You’ll have something valuable to contribute.

Managers Don’t Trip Over Mountains

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 23-02-2016

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Stumbled, by BlondInrlkard FrobergYou’ve likely heard the old saying, “People trip over anthills, not mountains.’ Well, ok, so maybe I’ve been around the block a few times, but that’s what my father always used to tell me. What he meant was, don’t focus so much of your attention on the horizon that you can’t see what’s right in front of you. Right in front of you is what can trip you up, right now. What’s in your face can bring you more trouble, more headaches and more hassles than what might be around the corner or farther down the road.

You wouldn’t drive your car that way, ignoring your immediate surroundings, so why would you behave that way at work?

Those “anthills” can vary from organization to organization, but as a group they usually involve what critics call “administrative” tasks; getting job descriptions right, handling routine procedures consistently and equitably, creating metrics databases, determining FSLA exemptions, correcting for title inflation, ensuring employee communications, (employment letters, expatriate agreements, reward plan documents, etc.) are accurate, complete and understandable, training managers to understand performance management, and most important putting out fires (employee issues) that seem to crop up everywhere and all the time.

The Small Stuff Isn’t Sexy

Sad but true, but what are often perceived as small issues (call them the “background”) are hard to get excited over. They don’t merit a line on your resume, and even doing a great job probably won’t advance your career. You won’t become a “Star” by going back to basics. So few employees will want to work the small stuff, that which is also less visible to management. Therefore those tasks are usually delegated to the newbies. Because the other practitioners want to be seen, they want to rub shoulders with the high-and-mighty; they don’t want to worry about getting the small stuff right. They don’t want to be seen focusing on what they consider drone work.

Be honest, now. Most of us like to work on exciting projects, work that will gain us the right sort of attention, the work that could advance our careers. Most of us are staring at the horizon as we walk down the corridors at work.

If You Don’t Get The Small Stuff Right . . . .

But someone has to handle the small stuff, or else the underpinnings of the organization first loosen and then eventually fall apart. Then it really gets exciting.

If you don’t change your car’s oil, or rotate the tires, bad news is going to happen – eventually.

What these big idea folks don’t seem to realize is that often times you need to walk before you can run. You have to understand the basic principles behind your reward programs before you should start to tweak them.

I first learned about linear regression the hard way, by preparing charts manually. It would take two hours to do what a handheld computer / tablet / smartphone can do today in minutes. But through my efforts I came to understand the foundation of linear regression techniques, vs. simply memorizing a series of key strokes to get the same answer. By starting with the basics I learned about regression mechanics, and about how they could help my organization. And also the memorization technique usually fails to give users a practical understanding of what they’re doing; which makes it harder to explain when the “Why?” questions begin.

So do yourself a career favor and work to become a well rounded professional. You can keep juggling more than one ball in the air, can’t you? So don’t ignore critical, though basic, compensation techniques (policies, procedures, communications, etc.) when chasing your home run reward programs. Getting both right will gain you both visibility and respect. And keep you from tripping over yourself.

. . . . They Trip Over Anthills

Cow Tipping

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 11-02-2016

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Cow Tipping, by Mike LichtMost of us start to feel a shade uncomfortable once we step away from our comfort zone, from whatever it is within our normal environment that we’re accustomed to doing, behaving or surrounding ourselves with. We’re creatures of habit, and feel that those habits came to us honestly, after much repeated practice. That, plus something out of the ordinary might challenge us, shake up our routines, and even point out weaknesses or flaws in how we look at ourselves.

What’s Comfortable For Us

It’s like my clowder of five cats at home, who each prefer to repeat the same behavior (wanting their food at a certain time, sleeping in the same spot, wandering the house [or yard] by following the same route), day in and day out, the routine pattern feels . . . normal. It feels right. It’s what we’ve grown accustomed to doing and would likely prefer to continue.

Following the same patterns at work can be equally comfortable for us, as after a time the job repetition becomes easier and our continued success assured. The thinking is: Let’s follow the same steps as we followed last year; just change the calendar and repeat the process; we can do it with our eyes closed. Have you ever watched a movie or situation-comedy endless times, to the point where you can mouth the dialogue (you know who you are!)? This habitual practice is the office equivalent of the administrative EASY button.

Are your annual merit increases processed using the same steps, the same forms and the same written communications? Only the date is different? Has your annual management incentive process become more bureaucratic (get those appraisal forms in on time!) than the originally intended critical assessment of objective accomplishments? Is your biggest worry the payroll deadline?

Have you overheard yourself telling someone, “We’ve always done it that way”? Ouch!

Like being burrowed into a soft leather easy chair, we relish the comfortable, the familiar. We don’t like to be disturbed. There really is a phrase, “If it ain’t broke, don’t fix it.”

Breaking The Habit

Now I admit that there’s nothing wrong with a tried and true routine, especially when things work, but sometimes change for the right reason can be a preferable strategy. Like when things aren’t working so well anymore. Or when the business environment surrounding your routine has shifted. This thought process is called “continuous improvement,” among other buzz terms.

Every now and then, don’t you get the urge to try something different, to break out of your mold and jump the shark? It could something simple, like going to Chick-fil-A instead of McDonalds, Dunkin Donuts instead of Starbucks, or maybe to implement an improved reward program at work.

This shake-’em-up attitude is called “tipping the cow,” where sacred cows, our tried and true and forever ingrained behaviors or practices are suddenly challenged. This is heady stuff, cutting against the grain or marching to the beat of a different drummer. This is sticking your neck out for the betterment of the organization.

Now I’m not talking about change for the sake of change, or rushing off into the unknown because you read some article by compensation “experts.” I’m talking about continuously striving to improve yourself, the programs you work with and the organization you work for. There is always a better way, and those who search for improvement will reap personal and professional reward.

But there are also risks out there for the unwary and the administrators. There are nay-sayers, passive resistors and doubting Thomas’. So have a care. But if you want to manage compensation, never mind lead or direct it, you have to stop playing follow the leader.

Ever see a line of elephants? Each holds onto the tail of the one in front of them.

Are you one of those elephants?

Or are you ready to venture forth and tip a cow?

I’ll Have Meat And Potatoes, Please

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 03-02-2016

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beef tenderloin with potatoes and rattatoilleOnce upon a time I knew a fellow who believed in pursuing everything cutting edge with his career, which happened to be as a Human Resources generalist. It seemed that he read copious articles, attended numerous conferences, webinars and local association meetings, always with the intent to keep abreast of the latest techniques, new thinking and buzz phrases.

I’ve been on the article review committee for Workspan, the quarterly WorkatWorld magazine, so I’ve seen the multiplicity of “new idea” articles that hit the presses like an assembly line that never stops. It’s a target rich environment.

This fellow was a modern day Renaissance Man, one who continually sought to introduce new programs, install new procedures, develop new behavioral processes, and in general tried to use his organization as a petrie dish for the latest and greatest concepts coming out from SHRM and WorldatWork.

However, there were only ~100 employees in his organization. And his management wasn’t all that interested in being at the so-called forefront of HR thinking. They couldn’t understand the call for constant change.

As a result this fellow didn’t last long at that organization. He felt that they didn’t appreciate the value of what he called innovative thinking. They felt that he didn’t understand their organization.

Do You Really Want To Experiment in HR?

For some, this question deserves a resounding YES. Proponents will tell you that continuous improvement should be the hallmark of every practitioner’s annual plan. But “improvement” can be a contentious and subjective term – and results should be more measurable than simply offering up “different.”

The intent should be, “we have challenges here and believe that one the latest ideas in HR will help us.” Because sometimes, just sometimes the reason new ideas are chased after like it’s the Holy Grail is that getting experience with such new ideas and programs is good for the practitioner. Good for their career.

Ahhh, the hidden agenda. Think about it. Tell me it isn’t so.

I believe that there’s value in asking yourself the “why?” question before putting forth any recommendation, be it from the old school or from avant garde thinking. Hopefully your answer puts the good of the organization at the forefront.

Walk Before You Try To Run

In my view an organization should get the basics right first (programs, policies, procedures), before they charge off into the (possibly) unknown. Before they realize the unintended consequences. There’s a reason some bright spark coined the phrase, “Keep it simple, stupid,” and that’s because the programmatic and behavioral basics are not only the foundation of your HR programs, but on a daily basis being straightforward is easier to understand, to communicate, to implement and to get managers behind you.

Under normal circumstances your management is going to be hesitant to try new things without first hearing a strong argument advocating that brave new path. Sometimes the phrase “If it’s not broke don’t fix it” isn’t a laugh line, but a correct strategy.

Now I’ll admit that the tried and true approach is not sexy, it’s not exciting, and will likely not get you a name for yourself or a nice new line on your resume. But often times the basics are the best approach, at least for the time being, for your organization.

So when management prefers meat and potatoes instead of haute cuisine, have a care that what you’re recommending makes business sense (and common sense) for the organization . First and foremost.

Round peg, square hole and all that.

The Holidays Are Over

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 03-02-2016

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Gifts by stevendepoloThe business year has ended, but managers everywhere are turning their thoughts to receiving one last Christmas present. The calculators are out and every eligible soul from Marketing to Manufacturing to Sales, IT, HR and the Executive Suite is trying to figure what their annual incentive check will look like. For some, it’s still the gift receiving season.

Year upon year the same bad script repeats itself for this annual process: once again we’ll see objectives created at the last minute, embellished accomplishments dutifully recorded, problems and shortcomings diminished or forgotten and the exercise of completing assessment forms treated with disdain.

More Than Mechanics Are Flawed

Most would agree that the process (performance + assessment = reward) is flawed not by design but by administration. Yet the foxes remain in charge of the chicken coup, offering little hope for reform. Because for those in charge the process works, and self-interest pays its own rewards. Every time.

As you approach the top of the organizational hierarchy true pay-for-performance can become an elusive concept best remembered from Compensation 101 textbooks, suitable only for life as it should be, not as it is. Sad to say, but senior management is often the worst offender. I’ve seen senior executives adjust the interpretation of financial results to ensure that their own incentive awards aren’t reduced. Senior staff deserves to receive competitive incentive rewards, don’t they? How can you not provide them with what they need?

Entitlement can and does trump performance.

While studies suggest that the I-deserve-it mentality has been reduced by the effects of a still struggling economy I believe that it’s alive and well wherever rewards are viewed as payment due for time served, not for effort and results.

It can be an uphill climb trying to persuade leadership that it’s primarily good performance that should provide rewards; that tenure isn’t a compensable factor, that incentive payments should be deserved, not simply an automatic gift of delayed compensation. Much is made of the principle that the rest of the organization is expected to earn their rewards; shouldn’t the same case be made for management?

End-of-Year Expectation

Have you ever suggested to an executive that their annual incentive award might be reduced because corporate or even individual performance didn’t meet expectations? They’d look aghast at the possibility. I’ve heard from many an executive who became upset when reminded of the review process and that the Board of Directors had to approve awards. The common attitude was, times up! – where’s the money?

Will the situation be any different for the upcoming incentive cycle? How about in your organization? Because bucking the trend of human nature is far from a sure bet.

To change those dynamics, as well as the effectiveness of your incentive plans you need to push a bit of pro-active initiative. With a new cycle beginning it’s not too late to have an impact, to instill an actual management pay-for-performance philosophy in your organization – even if it’s only taking one step at a time.

• The performance appraisal form shouldn’t be an activity list of what happened during the rating period (“I was very busy”), but a focused statement of achievement against quantifiable objectives.

• Let the assessment tell you the rating, not the other way around (“how do I fill out this form to give a 4 rating”?).

• Ensure that the assessment form language corresponds to the performance rating (Hmmm, doesn’t read like a “4”).

• Completed forms should be required before an incentive payment is made – negating a procrastination trick (“Just process the check. I’ll get the form to you . . . soon”).

• Have annual objectives established early in the year, not in an after-the-fact rush at the end.

Not exactly radical thinking here, but more like common sense tenets that should be remembered.

You’ll need more than a steely look and a waving flashlight to stop a speeding freight train, so educate management about these ineffective and wasteful practices before the cycle restarts. Afterward is always too late; discipline as a learning tool is best used to prevent problems, not when hands are already reaching into the money bag.

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.

Sorry.

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.