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Management Style Is Like A Box Of Chocolates

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 20-09-2016

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Group of men, by mayreejayneWith apologies to Forrest Gump, but considering the variety of management styles out there can be like opening a box of assorted chocolates.  There are so many possibilities.  Some can offer a good experience for those on the receiving end, bringing a smile to one’s face, while others can have you frowning with unfortunate memories and leave an unpleasant taste in your mouth.

Consider this scenario:  You as the hiring manager are in the middle of an interview with a candidate you like.  You want this person to join your organization.  The conversation is progressing well when, out of the blue you’re asked, “Can you describe how your staff views your management style?”

Not how you view it, but those on the receiving end.

Tricky question, as it’s possible that your staff considers your approach to leadership in a different light perhaps than how you view yourself in the mirror.  This is like the “weakness” question, a potential trap for the unwary.   What are you prepared to say about yourself?  To admit about yourself?  Provide the wrong answer here and if the candidate has other options they might look elsewhere.

The Name Game

The possibilities to describe who you are as a manager, while they have several names, can be sorted into a limited number of personalities.   Do you consider yourself . . . ?

  • The Team Manager: “We’re all in this together, folks” is the credo of this collaborative style leader.  While we may be a homogeneous team as an aspirational goal, sometimes this manager may decide that group needs outweigh that of high performers.   Rewards may be skewed toward everybody, vs.  toward individual achievement.  Also, can tough employee decisions be made, that might impact the team?
  • Absentee Manager:  Like an absentee landlord this boss lets you get on with it, whether you have the tools, guidance or knowledge enough to achieve your assigned tasks.  They don’t bother you, even when you need to be.  They’re out to lunch a great deal.  You’re on your own, until you mess up.
  • Micro Manager: “Here’s how I would do it” is a common phrase that gets old quickly.  This is the manager who can’t let go, who stifles creativity and will always remind you how they used to do things when they had your job.  There’s really only one way to do things.  Did I mention stifling?
  • Wind Under Your Wings Manager:  This is the supportive manager who focuses on developing the career of each individual on the team.  This leader will have your back and will work with you to develop yourself, but sometimes at the sacrifice of their own performance.   Senior leadership may have other expectations.
  • Textbook Manager:  Pick a management text or self-improvement guide and you’ll find this manager is there, whatever the term used.  The paragon of management styles, this boss does everything right and by the book; they are principled, delegate and communicate well,  know the business, and know how to lead the team by example.   However, this person may not really exist outside of those same textbooks.  Perhaps too good to be true.
  • Political Manager:  Sometimes known as the “SOB.”  This is the glad-handing boss who knows everyone higher up on the organization chart.  They may find it difficult to voice opinions or make decisions without first checking the impact on the preferences and attitudes of affected higher ups.  They can’t say no to the politically connected, even when no is what should be said.  Not much of a backbone here, so core beliefs can be a bit wishy-washy.  You might be tossed under the bus for the sake of political correctness.  You cannot rely on this manager to do anything but what is in their own self interest.  Often times employee turnover starts here.

The positive aspects for the personalities described above sound great and are fine to be offered up as your opinion to that questioning candidate in our scenario, but the actual question was . . . what does your staff think?

Note: I haven’t lectured about which management style is “bad.”   I trust that designation is self evident.  Hopefully those who see themselves as needing to make a change – will do so.

Who Is Really Out There

Have a care here.  It’s very likely that your own management style doesn’t neatly fit into one of the above labels.  Instead, most personality styles are a combination or composite of several of the attributes we’ve listed, and more characteristics, for good or ill can likely be named.  Chances are though, that each manager, each personality leans toward one label or other; this is the 70 – 30 majority rule.  And that leaning is where reputations are built.  Where labels stick.

Employees react to how they’re personally affected, and by what they hear from those they trust or perceive to be “in the know.”  So as well intentioned as you might be, it’s always wise to check the pulse of your staff.  You might have a reputation that surprises you.  And while you might think they have it wrong, you’re not the one who gets to decide.

By being truthful to yourself and to that questioning candidate you increase the likelihood of a good hire and a long serving employee.

Give A Title Here, Give A Title There

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 15-09-2016

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An organization I’ve worked with in the past had developed an interesting hierarchy of management titles.  It went something like this:Handout, by DianeWorth

  •      Manager
  •      Senior Manager
  •      Director
  •      Senior Director
  •      Vice President
  •      Senior Vice President
  •      Executive Vice President

Quite a robust hierarchy for a small organization of only a few hundred employees.  And to cap it off, the base salaries paid out were inconsistent with that same hierarchy.  So a Senior Director was paid less than several Directors, and their EVP was paid less than a couple of the VPs.

And of course we all know that a common leadership designation (benchmark) in most commercial compensation surveys is the “senior’ tag, right?  Wrong.

When I asked my client to explain how an employee gets to be designated at a “senior” level I received one of those “deer in the headlights” reactions, followed by a mumbled, “Always been that way.  That’s why we called you.”

They had finally realized that they had gone off the tracks with their titling, and now wanted to get out from under.  But they didn’t know how.  And they didn’t seem to know how to stop from making the problem worse.

How Does This Happen?

Perhaps your new hire is already a Director at their current employer and wants a bump up on the resume before they’ll accept your offer.  Or perhaps you aren’t able to pay some leaders enough of a differential with their peers, so you create a new level in the hierarchy.  Or to placate a valued member of management whose ego is bruised by perceived internal inequities you say “what the heck” and give them the better sounding title they desired.  You want the problem to go away, and so you rationalize that – it’s only a title.

Hey, it happens.

I’ve written before about the infection of title inflation, where what some might consider a no cost reward when times are tough (“here’s a nicer sounding title”) is actually a slow drip poison for your payroll, ROI and internal equity.  It’s just a matter of time before those with better titles demand to be recognized (grade) and paid more (base and incentive pay) than those holding lesser titles.  Common sense.

Getting Out From Under

So how does one go about fixing this?  First of all, you should acknowledge that the hole you’ve dug for yourself (the problem) is deep enough and costly enough in terms of increased payroll, internal equity complaints and damaged morale over favored treatment.  So throw away the shovel and step out of the hole.  Stop assigning “Senior” designations to your leadership.

To do this effectively though, and for any solution to last, you need a plan.  You need a rationalization to explain why Bob is called a Director and Sally a Vice President.  And why you won’t / can’t call Roger a Senior Director.  To create that plan you have a few options to consider.  You could use:

  • Job Evaluation System: Any whole job or point factor system will be able to distinguish via job content assessment which jobs are bigger / larger / more impactful than others.  And if you use a grading structure your JE systems will tell you how far apart various jobs are.
  • Market Pricing: JE systems are notoriously subjective, and if that is a problem for you, or you just don’t have the time to invest in developing and administering a JE program, use a competitive marketplace analysis to tell you what others are paying for your jobs. Then slot your jobs into a salary structure (with grades) based on the market.
  • Combination: It’s a bit more dicey when you want to use both a JE system and market pricing analysis to determine grade, but I’ve seen clients do it.  Can be a bit cumbersome though, when your JE systems calls a job a grade 10, but your competitive analysis tells you it’s an 11, or a 9.

But grading by itself, no matter the impetus, doesn’t automatically change the titling structure.  So consider using a Titling Matrix to assist you.

Examples vary by organization, industry and even management temperament, but essentially a titling matrix uses a number of profile criteria assessments (i.e., Reporting Relationship, Management Breadth, Organization Impact, Level of Autonomy, Judgment, Nature of Supervision, etc.) to distinguish between levels / titles within an organization.

Can there be exceptions?  Of course.  But having a plan avoids chaos and establishes structure and standards for your hierarchy.  And that’s a good thing.

What Is Compensation Leadership?

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 25-08-2016

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Portrait, young business manWe’ve all seen numerous examples dotted across Facebook, LinkedIn and probably every other current example of modern social media; catchy phrases, often accompanied by beautiful photos, describing what the term “leadership” means and what it does not.  And how you can improve at this desirable skill set.

These pithy, inspirational snippets are quite popular, as evidenced by their frequent appearances and the number of “likes” that each captures.  But do they really have an impact?  Does reading them actually serve as a catalyst to alter someone’s behavior?  I suspect that there aren’t too many “aha!” moments out there where someone reads a motivational phrase and abruptly decides to turn their professional life around.

In many instances (perhaps most) these poster-worthy signposts likely bounce off our consciousness.  We like them, probably agree with most of what they say, but then they don’t really galvanize us into action.  They don’t change us.

What is a Leader?

Most leadership definitions relating to the workplace focus on people skills, those attributes necessary to engage a group of employees.  But that’s not what we’re talking about here.  Think “leading the business” rather than managing people.

The dictionary doesn’t help much, as “leadership” is defined as “The position or function of a leader,” or “An act or instance of leading.”  Pretty vague.

But a “leader” is also described as “A guiding or directing head” – which is the best official guidance we’re going to get.

So what does the word “Leader” mean to you?  And to that person looking back at you from your mirror?

Functional leadership, being responsible for the direction of an organizational grouping, requires an additional level of skill beyond working well with people.  It’s about being inspired, taking risks, setting direction and using influencing skills to make a difference.  It’s sticking your neck out there to be seen, to be heard, to be a factor within your organization.

And while you’re admiring your reflection in the mirror, consider this; can you be an effective people leader yet remain ineffective as a functional leader?  Think about it.  If we define a functional leader as one responsible to move the organization (staff, department, business, etc.) forward from Point A to Point B, can you remain at Point A (essentially treading water, administering the routine, leaving programs on automatic pilot, etc.) and still lead people?  I suspect so, though that may not be what your senior management is interested in.

In my view, remaining at Point A is not providing Compensation Leadership, whatever else you might be doing right.

Back to the mirror.  Ask yourself, what role have you been asked to play in your leadership position?

  • Change the way the organization’s reward programs have been operating?
  • Get a handle on or reduce out-of-control payroll costs?
  • Collaborate with HR and senior management to develop a high performance culture?
  • Integrate reward programs with the organization’s business plan?
  • Encourage new ideas and support constructive creative thinking?

Would you consider any or all of these responsibilities as desired outcomes that would move the organization’s operating dial from Point A to Point B?

Or perhaps leadership in your environment focuses primarily on you only as the titular leader of a group of employees, where you’re expected to:

  • Maintain and administer the current reward programs
  • Keep employees from complaining too loud
  • Avoid antagonizing senior management with controversial ideas
  • Be risk adverse and stay the course

This set of responsibilities sound more like the classic definition of treading water.  “Let’s stay at Point A and join the bowling team.”

Demonstrating Compensation Leadership

It is my view that the demands of compensation leadership are less about being a well-liked fellow and getting a lot of Christmas cards, but more about moving the organization forward in your chosen field.  Of being a player who gets this done.  How do you do that?

  • Show that you know the business:  You must demonstrate that you understand general business operations and how the compensation function relates to overall business success.
  • Show that you’re a professional compensation practitioner:  No dilettantes here!  You need to be taken as a serious knowledge worker in your craft.  You had better know your stuff.
  • You must understand what needs to be accomplished:  You have to know where Point B is and have a plan to get there.
  • You had better know a bit of office politics:  You may hate it, but you have to play the game well enough not to be eaten by the sharks.
  • Know how to sell or persuade: Finally, you have to be able to convince senior management to move in the right direction – that pathway which is required in order to make a difference, to reach the brass ring at Point B.

Can you do both?  Can you provide leadership for your compensation function and for the employees on your staff?  Yes, you can.  But realize that the value of differing types of leadership skills is often weighted differently by various senior management assessments.  What do they want you to achieve where you work?

Btw,  I don’t recall seeing many catchy phrases or cute pictures that encourage functional leadership.  Or maybe I’m missing them.

Garbage In, Garbage Out

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 22-08-2016

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Garbage pick up day, by Joe & Jeanette ArchleWhy do we assume that any survey data we see is an accurate reflection of a competitive market?  And by “we” I mean both compensation practitioners and senior management alike.

Because many times I’ll have a client chomping on the bit to race down the hallways, excitedly waving a piece of paper and shouting, “I have the number!” Now they know the amount to pay.  Because the survey said so.

But no, they don’t have the number.  Likely what they should be whispering instead, is that they have an arithmetic calculation of perhaps questionable origin; one that may or may not reflect what’s truly being paid out there in what they call their “competitive marketplace.”

One doesn’t run down the hallway with that sort of wishy-washy information.

Questionable origin?

Well, that puts a pin in the balloon, doesn’t it?  Horrors.  To suggest that maybe that number you took from the survey isn’t a smoking gun after all.  That’s like challenging our core beliefs, like mom, the flag and apple pie.  If it’s in the survey it has to be right, doesn’t it?

Perhaps.

Perhaps the survey is right.  Or the number you’re looking at is simply an accumulation of guesses.

So why is it a good idea to be cautious?

Have you ever wondered, who is it that completes those survey forms? Senior compensation professionals with an intimate knowledge of job roles, reporting relationships and the impact of title inflation?  Or is it the lowest rung of staff member, the newbie, perhaps even an intern?  Last in, first assigned to fill out survey questionnaires.

Users look at surveys and have a tendency to assume that everything is ok with the numbers.  They’ll look right past the quality issue and let the discussion shift immediately to job matching, aging, use of median or average, which companies are in the survey, etc.

But what if the foundation of the survey itself, the data being input from the myriad participating companies is flawed from the start?  If garbage goes in, that’s all that can come out.

Consider the probable experience of those completing survey input questionnaires:

  • How many of these input forms do I have to complete for the survey?  How many surveys do we have to participate in?
  • Do I have the time for all this?  Maybe I’ll have to hurry a bit.  Maybe I can copy data from one survey to another.
  • Do I have to read our own descriptions and compare them, one by one against the survey definitions?  Wow, that’s going to take awhile. Maybe I can just use the title.
  • What do I do when the survey doesn’t have a Lead category, or a Senior Manager?  We have four levels in our hierarchy, but the survey only counts three.
  • I don’t understand some of the descriptions I’ve been given, and that happens a lot. I don’t have time to chase after managers to learn what they meant.  So I’ll make a guesstimate for the survey match.  That should be close enough.
  • I really hate doing this.  What time is it?  Ready for lunch?

Put any two of these comments / attitudes together and I’d worry that your organization’s survey questionnaire wasn’t the best effort you could manage.  Multiply that experience across the majority of survey respondents and . . . you get the picture.  So perhaps the data should be taken with a grain of salt; it isn’t Moses coming down from the Mount with the tablets (answers).  It’s Bob the intern, or Mary the new hire, scratching their heads and hoping they got it right.  If they even care.

Pricing guide vs. “the answer”

So what are you going to do?

A good rule of thumb is to consider that your compensation survey sources, single or multiple, actually provide you with more of a “pricing guide,” and not a “smoking gun” of what to pay.  Use the survey data to guide the decision-making process, whether it be setting up salary structures, hiring a candidate or offering the right promotional increase.

Consider the survey figures as “feeling the pulse” of the job market.  They aren’t precise, there is no singular number to use.  The arithmetic average “answers” you glean from the survey sources are better used as a rough idea of what other organizations are paying for like (or similar) positions. Nothing more.

Yes, you need a number. But not any number will do.

The worst thing is to blindly accept what those harried, stressed out and over-taxed data input folks are telling you.  Because they might not know themselves.

Garbage in and all that.

Focus, Focus, Focus

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 10-08-2016

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Any seasoned compensation practitioner will tell you that having business objectives for an employee’s short term incentive plan (the annual STI) is a critically important design element.  Focus, by AnkakayLacking that you will face the prospect of misguided busy work being claimed as having provided a valuable contribution.

These same professionals will likely also expound on the value of developing SMART objectives.

  • Specific:  Avoid the vague and generic
  • Measurable:  You have to be able to measure the performance
  • Attainable:  Objectives should be reasonably attainable with a concerted effort
  • Realistic:  Meaningful goals that support the needs of the enterprise
  • Timely:   Avoid a never-ending effort with a time line that fits the performance period

And then we have to consider the number of objectives.  Here the usual advice is to concentrate one’s effort on less, not more.  Having 10 or more objectives reads more like an activity roster than a focused series of targeted goals integrated with management and business plans.  The rule of thumb (actually more of a guideline) is to identify no more than eight, and no fewer than four objectives.

Somewhere in that discussion you would also find recommendations concerning the size of the targeted reward – the potential, the opportunity.  No one changes their behavior and focuses their efforts for an entire year with the promise of only a pittance.

Ok.  Now that you have (hopefully) the right objectives to chase, and you’re motivated to do so, the question becomes, where best should you  spend your time and effort?

What To Focus On

The natural tendency for most employees is to focus their efforts on what they’re interested in (what they like to do),  what is the easiest to accomplish, and those objectives that would give them the biggest return for their efforts.   Identifying the easy stuff is, well easy, but what would provide the biggest bang requires more organizational planning and design.  Because the organization should have designed a win-win scenario into their plans; if the organization wins, the employee wins.  But the organization has to win.

To get the employee to chase specific goals meaningful to the organization the carrot (reward) dangled in front of them needs to be large enough to gain and keep their attention.   So the organization needs to lead the employee to focus their efforts on what is most important to the organization.

The natural tendency is to first attack the challenge that provides the highest reward and least resistance.  They may even decide to ignore other objectives – no matter the value to the company – if the reward for the easy objectives makes up the difference.

So employees can be encouraged to change behavior and focus attention on those objectives with the greater reward opportunities, the biggest bang.  You do that by proportionately weighing the more important objectives much greater than the “nice to have” objectives.

Consider this: When you provide an employee with multiple objectives, anything with a weighting factor less than 10% of total reward opportunity becomes a wasted effort.  They’ll either ignore it (no results), or will feel the goal can be achieved with little effort (would likely have been achieved anyway).  Reward monies in this case will not motivate, will not impact the employee’s behavior.

I have witnessed Sales employees ignore small payout objectives in favor of focusing on the bigger ticket reward goals.  So make sure you put your money and weighting behind these goals.

Without weightings each objective, whether large or small, critical or incidental, will be valued and paid out at the same rate.  Which is NOT how your organization actually values these objectives.  But if you design the incentive plan that way, that’s the behavior and that’s the performance that you’ll get.

Fish or Cut Bait

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 02-08-2016

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Dad Fishing, by Richard GiffordOr in poker terms, “Are you in or are you out?”  Make a call.  Because sitting on the fence dithering as life goes by will get you little more than a sore bum.

Picture this:  What do you do when a senior executive  looks you in the eye and asks you a direct question about your thoughts on a controversial topic that you’re responsible for, or involved in?  When they want to know where you stand.  In that scenario you’ll find yourself unable to play the glib politician who hems and haws,  spouts unrelated talking points or even attempts to misdirect the conversation.  You ‘re caught on the spot with no wiggle room.

You pause, but find that they’re still waiting – still looking you in the eye, expecting.

Well, what’s it going to be?  Do you tell them what they want to hear, or tell them what you really think?  Stick your neck out or pull it back into your shell?  You’ve only got a moment to weigh your options.

The Role You Play

It’s at this point that you find yourself defining and confirming your role in that organization, or at least as how senior management looks at you.  Are you to be seen on the front lines leading (managing , directing, etc.)  Compensation, or are you behind the firing lines administering the Compensation function (maintaining the status quo, performing repetitive routines, providing admin support, etc.)?  Are you sticking your head up, or keeping it down?

Chances are that you’ve reached the level of your present role because someone felt that they could trust you with responsibility, to either lead or administer.  You know your job, or at least the technical aspects of it.  You have the title of someone in charge, someone who is expected to understand the complexities of your profession and how those intricacies relate to your business operations.  Thus, how do you handle yourself when the chips are down becomes your “rep,” how you are known – for good or ill.

Remember too, that first impressions are hard to shake.

Decision-makers project a self-confidence to stand up for themselves, to provide their best professional advise based on their knowledge of the subject matter and their personal experience.  On the other hand, fence sitters often display a fear of making a mistake, or worse, of getting someone angry with them.  Like any good (?) politician the cautious administrator would rather first read the polls (know what the questioner wants to hear) before speaking out.  That’s called being flexible with your opinion.

If perchance your role is still gelling within the organization, or senior management isn’t quite sure yet what they have in you, that is the time to make your mark.  Or to quietly withdraw from the field.

On The Other Side Of The Coin

But lest we advocate for too much candid free speech, let’s give a sad call out to those in management who push themselves too far with their self-confidence.  Here you would find the arrogant so and so who loves to make declarative sentences to their staff, as if to say, “I have the answer.  The rest of you are idiots.”

Declarative sentences made to peers and subordinates leave the listener with the option of either complete agreement or being placed on the defensive – as they clearly are in the wrong.  Thus it is rare for such “answer man” comments to be made to senior management – the boss – as such arrogance would likely cut short their career.

Such self-promoters will avoid modifying their statements with “In my opinion,” “I think,” I’ve read (or heard about)” or in any way admit to the possibility of other viewpoints.  This is the way it is.

Do not be this person.  You will not be liked, or respected.  You may be listened to, simply because of where you sit within an organization chart, but that only places a false smile on the face of those subjected to your over-the-top self-confidence.

The Need to Reward Employees

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 25-07-2016

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Money, by borman818Now you may be asking yourself, why is he talking about this?  Isn’t it obvious, like 2 + 2 equals 4?  Doesn’t everyone reward employees for their efforts?

Sad to say though, that there really are organizations that don’t view the employer – employee relationship in quite the same way as most of us.  Their thinking is, “We pay them a salary for doing their job.  Why should we pay more?”

Taking a page out of a Compensation 101 textbook let me list the reasons that such a negative attitude about your workforce can become a problem, both short and long term.

  • You need to pay competitive wages: While this point is seldom argued your comparative marketplace is a moving target.  What looks like competitive today soon won’t be, so unless you have a process for updating your competitiveness it will start to slip.  And that slippage will pick up speed over time.
  • Business costs rise over time; so do employee expenses: The price of most items is higher today that it was a year ago, and in some cases the rise is dramatic.  If your employee costs (pay levels) are fixed / frozen your employees will have an increasingly difficult time making ends meet.
  • Rewarded behavior is repeated: It’s an old saying but worth repeating until everyone “gets it.” If you reward desired behavior (good performance) you’ll likely get more of it.  Conversely, the lack of reward tends to encourage average behavior, or worse.
  • Do you want a high performance culture?: If you fail to provide employees with equitable and competitive pay that’s linked to their job performance, what you’ll get instead is a lot of Joe Average performance.  Because an employee’s self motivation is not sustainable.  That personal battery of enthusiasm will drain down and shut off.
  • Employee expectations: Employees expect to be paid a reasonable amount for their work, but they also expect to be both acknowledged and rewarded for making a continuous effort on the company’s behalf. No one will work well for very long with their pay frozen or the likelihood of more money being a “maybe” or a “we’ll see.”
  • An elemental cost of doing business: This may be hard for some to understand, but if you’re going to operate a business there are certain costs that need to be incurred. Otherwise don’t bother.  And one of those costs is to properly pay and reward the people who are working for you.  They keep the business going, and you should never forget that.
  • Honoring your commitment: Do you proudly tell everyone that you’re a “pay-for-performance” company?  Do you believe that employees drive business success?  Well then, you had better walk the talk.  Because employee trust is at stake, and the failure to honor your promises will ensure business mediocrity, if not a slow descent into failure.
  • You should fear the alternative: If you decide to march to the beat of a different drummer, to say “nahhh” to the above, then consider what your future likely holds in store for you. Because when employees start to say, “why bother?” you’re in trouble.

>  Dissatisfaction with management: This is both negative and infectious. Disgruntled people are not quiet people.

>  Reduced morale: Sad faces and blank looks are not signs of an engaged workforce.  And the talk around the break room will lean toward other “opportunities.”

>  Reduced productivity: When employees take their foot off the gas pedal.  What you get from them starts to drop off from a desired 110% effort to somewhere south of 100%.

>  Higher degree of disengagement: When your employees start to say as well as think, “I don’t care” – that attitude will spread.  What it builds is a low performing culture.  Think of your business as a car driving around town with the brakes on.

>  The wrong turnover: The wrong sort are the better performers, who always have an option in the marketplace. Someone else will tell them, “We love you.  We’ll take care of you.  Come work for us.”

If you believe that employees are important to the success of your organization, then not having a proper pay-for-performance program in place to recognize and reward job performance on a regular basis is a mistake of the highest caliber.

Then again, perhaps some believe that employees are an easily replaceable commodity, that their pay is a cost worth trying to reduce, rather than an investment.  That they are not people, but simply cells within a spreadsheet, or blocks on an organization chart.

Just remember, that what you sow is what you’ll reap.

Judgment by Self Interest

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 14-07-2016

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Empty Boardroom, by reynermediaHere’s a tip that I learned early in my professional career, and has helped me weather many a storm of controversial compensation proposals.

Always check to see how the leadership team is personally affected by your recommendations.

Yes, we can all agree that internal equity, fair treatment and competitive practices should be the hallmarks of any reward program, but at the same time we should also be realistic as to what is achievable – acceptable to the powers that be.  If those at the top of the house in your organization feel that they themselves are not being positively impacted, or worse, then there’s a good chance that your recommendations will be going nowhere.

Or put another way, if they don’t win you will lose.

How the World Turns

I saw this reality play out just the other day, when assisting a client deliver their proposal to senior management for new grade assignments and a revised salary structure.  The designations for the senior leadership cadre placed incumbents low in their salary ranges, offering plenty of upward movement – and perhaps a bit of rationale for a “competitive salary adjustment.”

Our recommendations gained smiles and nodding heads from leadership – a well-received meeting.  There was no reason to explain how the senior team grades had been revised upward in an effort to better position incumbents, and thus garner approval of our proposals.  Because when the initial Draft #1 results were developed (reflecting the much-touted internal equity, fair treatment and competitive practices) the leadership incumbents did not fare as well, with higher compa-ratios and less opportunity for pay growth.

Should we have left things alone (the facts are the facts) and led with our chin in presenting our proposals?  Some purists would argue that we should have stuck with our principles, even if it would have been a risk.  But the client didn’t want to “throw the baby out with the bathwater” and risk the entire structure proposal being rejected or seriously challenged.  So they nudged some of their recommendations to favor the senior leaders – who as it turned out subsequently approved all of our recommendations.

Not In My Backyard (NIMBY)

Have you heard this term used before?  It’s when residents of a community are in favor of a new school, a shopping center, or any form of commercial enterprise, but not in my backyard.  What is conceptually a good idea turns sour when individuals don’t like how they are personally impacted.  “Anywhere but next to my house.”  Well, the same thing can happen at work when you try to get senior management to control the infection called “title inflation.”

Many a time I’ve tried to explain the inherent dangers of puffery and bogus titling to senior leaders, but all too frequently they would wave off my concerns with a “tut-tut” dismissal.  No worries, they’d say.  “It’s a no-cost benefit,” or “What’s in a title, anyway?”

And also because the impact of inflated titling didn’t affect them.

But as soon as someone is suggested as a Vice President title when they’re really something less, well then  the proverbial crap hits the fan.  “We can’t have that” is the common outraged and aggrieved response, and suddenly of all the arguments against title inflation that we used for the lower levels now make sense, albeit only at their own senior levels.

The fascinating counterpoint is that the dangers of title inflation will continue to be ignored at those lower levels.  Tut-tut.

But not in my backyard.  Self-interest can be a powerful tool, especially when wielded by decision-makers.

Is this right?  Is it fair?  Is it a double standard?  No, no and yes.  But in order to sell your compensation recommendations it would be to your advantage to know your audience.  You’ll need to acknowledge, and sometimes even play to the self-interest of those who are in a position to deny you.

As a professional it may bother you to take these steps, but sometimes managing compensation is a bit more complicated, and even contradictory, than the Compensation 101 textbooks would suggest.

Going Along For The Ride

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 11-07-2016

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Hand Mirror, by the Italian VoiceCan you think back to when you were first hired or promoted into your current compensation leadership role?  Do you recall what it was that your new boss said would be expected of you?  Was the message you heard something like this?

  • “We just need you to administer the current programs”
  • “Everything is working well.  Keep it that way”
  • “Don’t rock the boat; just keep things steady”
  • “We’re a traditional organization.  Don’t try to be a trend setter.”
  • “We pretty much know what we’re doing.   We just need you to follow along.”

Now that’s probably not exactly what you were told though, as chances are that no one would ever admit to uttering those words.  You must have been mistaken, they would say.  Instead, what they would prefer to recall saying to you, or at least what they think they meant, was something like this.

  • “We need a game changer, someone to shake things up around here”
  • “We have problems (insert specifics here) and we need you to fix them”
  • “Someone with your knowledge and experience is really needed here”
  • ” Tell us what we need to do. You’ll have complete leadership support”
  • “You have a great opportunity to make a difference here”

Mixed Messages

Now wait a minute.  These are two completely different messages, and would require two separate skill sets and personal motivation in a candidate.  The first message wants you to simply administer the current reward programs, to keep the ship afloat, moving in the right direction – and while you’re at it don’t let yourself step off the line that they’ve clearly marked out for you.  Change agents are not welcome.  The status quo is.

The second is quite the opposite message, demanding change, demanding leadership and demanding that you push the organization in the appropriate / proper (not “right”) direction.

As a newly minted compensation leader, which message do you want you hear?  Which one suits your “sweet spot” comfort level?  Which one would encourage you to stay with this organization past your first year?

And lest we forget, there is the very real possibility that you were in fact told one thing (the change agent) while circumstances would soon dictate another (the administrator).  This happened to me once, so I know the game is played.

It Depends on You

Chances are that if you consider yourself a change agent personality you won’t be happy with the routine administration, though technically you’d be very capable.  However, if the status quo is leadership’s only objective,  the search for competency in candidates would be easier, as even a modicum of technical ability would be suitable.  Some organizations might even promote a Financial Analyst or even a long serving Compensation drone.  They wouldn’t need more.

But the wrong person would drown in such a morass of “if it ain’t broke, don’t play with it” mentality.

The real state of play may be hard for you to figure out, until you’re already ankles deep in the slow speed or the fast speed.  And the title they give you won’t help, as title inflation can puff up the most mundane environments.   You could end up being the VP of (administrative) Compensation.

What’s in a title, anyway?  Is it a convenient reward for past efforts, like a label, or is it actually a description of what you’re supposed to be doing?  If you’re a Manager in your organization do you manage your responsibilities?  Or if you have a Director’s title, do you actually direct the affairs of your group?  But what if you do have a business card with one of those lofty designations, but on a day-to-day basis you’re really just keeping the ship afloat, administering, processing papers and making sure that no one’s feathers are ruffled?

Have a care to make sure that your career defines you and builds your title, not the other way around.

Unless you’re just going along for the ride.

You Can Lead a Horse to Water, But . . . .

Posted by Chuck Csizmar | Posted in Articles, Universal Compensation | Posted on 19-06-2016

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You can lead a horse to water, by jjsalaDo you remember hearing this phrase, about how you can lead a horse to a water source, but you can’t actually make them drink from it?  The thinking is in the same vein as the adage about how teaching a person to fish goes a lot farther than simply handing them a fish.

In other words, you can only go so far in helping someone before they have to take ownership of the task themselves.  Otherwise you really haven’t helped them get past a single point in time, a single challenge.

You Make Your Own Guarantees

I’m a compensation consultant, and clients usually reach out to me when they have a compensation challenge that needs a solution.  And that challenge usually revolves around how best to spend the almighty dollar.  Here’s what I tell them:

“I can promise to show you how to save money (or in general fix your problem), but I cannot guarantee to personally save you a dime.  You have to do that yourself.”

What I’m saying is that, while I can study your situation, gather reams of data and present recommendations for you to consider based on my considerable experience, until you make the decision yourself to take action (change behavior, adopt new policies / procedures, adjust your perspective, etc.) improvement will not actually happen.  You have to be willing to change.  You have to be willing make the sort of tactical and strategic decisions that will solve your problems.  You have to be willing to step up and stand for the right kind of change.

Stepping Up

And that is where things start to break down, as some of those decisions can be hard to make.  Many managers and even senior leaders can be loathe to shake things up.

  • We pontificate about our pay-for-performance programs, but still want to give everyone a raise
  • We don’t want variable pay to really be “at risk,” as what we practice is actually a form of delayed compensation.  “Don’t worry, you’ll get something.”
  • Someone might get mad at these changes and decide to quit
  • We’ve never done that before (uncomfortable with stepping outside the comfort zone)
  • Not everyone is going to agree with this approach (we believe in consensus thinking)
  • How much is this going to cost me?  “Oh, I don’t want to spend that much.”
  • “Really?  That sounds difficult to implement.  Can’t we just tweak what we do now?”
  • “How long are these changes going to take to implement?  I don’t have that kind of time.”
  • Etc, etc, etc.

Now the above are just examples – excuses really – that suggest it would really be a better approach for some to simply stay the course.  I’m sure that each reader can quote a few similar examples from their own organization.  The point is that the sort of change that really impacts the organization, that can actually solve many of the compensation challenges you face, are often hard to make.  That’s why you haven’t undertaken them before.  There are going to be winners and losers, and too often management worries more about the losers (Joe average performers) than in taking care of the winners (your star performers).

As a consultant I not only make recommendations but also try to show the client what is likely behind door #1, door #2 and door #3 of their options.  What is going to happen.  But I can’t make the decision for them.  Nor should I.

Always remember that many managers put being liked at or near the top of their personal agenda, and often times the kind of changes an organization requires is not going to win popularity contests.  Hence the tendency in some quarters toward inaction or half-hearted lip service.

So while I can lead a client to the water source, sometimes they just sit there with a blank look.

I hope that isn’t you.