For those of us who have spent their entire career in the Human Resources / Compensation arena our pathway likely started at the bottom of the ladder, writing job descriptions, completing survey questionnaires and evaluating jobs.

Eventually you worked your way up the food chain into survey analysis, market pricing, structure design, incentives and program development. You mastered the various formulae, charts and graphs, could make Excel dance on a dime and you would happily debate the various and complex techniques that befuddled your HR generalist colleagues. If you stayed at it long enough you eventually became a master technician on the “hard” side of Compensation. You carried a calculator everywhere.

The Hard Side

The “hard” side?  This viewpoint represents the traditional view of compensation practitioners from the outside looking in.  We are those who manage the technical analysis of impersonal data bites – the black & white world that only deals with neutral and impersonal facts.  We are usually placed in a small cubicle, left to our own devices.    No one stops by to chat.

We don’t receive Christmas cards.

Then it happens; one day you’re asked to walk through the beaded curtain into a new world, a new career in something called Compensation Management. This is exciting, because on the other side is increased pay, a loftier title and finally recognition as a “player” within the HR community.

The Soft Side

You are assigned internal clients, managers who suddenly aren’t interested in your formulae, charts & graphs or technical babble. They want you to solve problems, provide solutions, to talk with them and explain how Compensation can help them achieve their business objectives.   You become an advisor, deeply involved in “what do we do now?” scenarios.

This is the “softer” side of Compensation, where rules become guidelines, policies become politics and the proper answer to most everything is “it depends”.

Not everyone successfully makes it through that beaded curtain, though.  Why?  Because the journey requires a mindset change as well, into a place where your comfortable analtyical tools don’t serve as well and you need something called “relationship competencies” to succeed. I’ve seen many people falter at the curtain; some do not want to pass through – and others have stumbled through, only to eventually burn out like a meteor shooting across the night sky.

Why do some fail to succeed once through the curtain?

• Non-Exempt mindset: some are not comfortable being part of management, as they continue to identify themselves with their former colleagues and find it difficult being labeled “management” and required to support a particular view of employee reward.

• Too comfortable with black & white of technical analysis; figures don’t lie, they just are.  Can’t argue with that.  There’s a comfort in dealing with the neutral, just reporting the facts.  Some prefer to stay in this “safety zone.”

• Not comfortable with multiple answers for the same question – a common problem where differing circumstances result in differing answers.  Like the ground shifting beneath your feet, the certainty of sameness is replaced by “it depends.”

• Preference to let existing policies and procedures make the decisions; some folks don’t like to stick their neck out, to face being challenged and having to defend their recommendations.

• Preference in the safety of the numbers, vs. dealing with the people who are affected by those numbers.  You’re in HR, so you should be at least somewhat of a people person – sensitized by how your recommendations impact employees.  Some aren’t comfortable with this role.

Back when you were an analyst you were not expected to develop tactical strategies and recommendations; you read the surveys, tabulated the spreadsheets and reported your findings.  That was it.  Sound harsh?  Not at all, as proper analysis remains a critical component for the making of informed business decisions.

To be an effective practitioner in compensation management is to straddle both sides of Compensation, to understand the technical aspects of where the numbers come from and what they mean, as well as the brave new world where your role is as an influencer of management decisions.  To be successful you need to breathe the crisp air of business realities and shake up those technical rules that you’ve learned so many years ago; you do not let them rule you.

But you still won’t get Christmas cards.

Compensation management is a challenging role, requiring you to balance the numbers, the people, and business realities – all while sticking your neck out to recommend a potentially contentious course of action.

Or you could sit back and let established policies and procedures do the talking, though that’s probably not the intent of the increased salary and important title.

What’s it going to be?

I once supervised a Compensation Analyst who had learned her craft through professional seminars and workshops.  One result of that education was her favored response when faced with a challenge at work; “the greatest minds in Compensation say that . . . “.  It took patience to educate this budding practitioner in the difference between the classroom / textbook answer and the reality of the workplace.

A while ago I came across an HR blog where the author instructed readers in how to create a merit performance matrix.  Very good stuff, I thought, admiring the technical step-by-step directions, except I knew from long experience that the procedure being described would never work in the real world.

While it is critical to understand the technical foundations of Compensation methodology and practice, first and foremost you need to anchor yourself in the here and now, to know what will work and not work in your own organization – no matter what the finest minds in Compensation think.

Why does Compensation theory often clash with workplace reality?

• Business realities:  management knows more about a particular business situation than you do.  What you provide to the decision-making process as a Compensation professional is limited to your subject area, while management usually has the bigger picture – the perspective of multiple viewpoints.  Your advice may not fit their business reality, no matter how logical your argument.

• Bias of decision-makers:  they may feel that they intuitively know the right strategy (they’ve done it before, if-it’s-not-broke-don’t-fit-it mentality, a friend / relation / old college chum suggested an approach, etc.).  Perhaps they read an article and now are insistent to follow the advice of an author who lacks an understanding of their business.  Years ago I worked for a company whose CEO forced HR to implement a particular benefit plan because he had read a magazine article.

• Problem avoidance: short of killing the messenger, one solution for management is to do nothing (you’ve exaggerated it, the solution costs too much, there’s still time, etc.).  These senior managers avoid major decisions until it bites them in the leg.  It can sometimes be dangerous to your career if you try to force a decision.

• Business culture or model: some initiatives don’t “fit” in your organization.  Managers with a laid back organization style will not be interested in recommendations to document uniform policies and procedures and have standardized forms for every action.  Picture your head banging against the wall.

Sometimes those experts who teach Compensation techniques fail to ground their instructions with a caution: check this process out in the reality of your workplace *before* you take a classroom technique and wave it in management’s face.

For example:

When designing a pay-for-performance merit increase matrix the standard rule is to place the average increase percentage in the cell block most populated by employees (average performance and average position-in-range).   The sound reasoning for this technique is to better manage the costs associated with that year’s annual increase process.

A lot of years ago I followed that approach in my first compensation leadership role.  I still have a little bump where my head hit the wall.

Here’s the rub; such a technique requires that the matrix change every year, as the analysis demands you study where the population averages fall each year.  But management will likely have none of that. They want the same matrix every year, for ease of administration and communication.

Another area that separates the compensation technician from the professional is the ability to deal with what I call the “softer” side of compensation.  Survey statistics, charts and formulae are very good to a point, but management will want to know what it means and what to do about it.  So the answer isn’t simply reporting competitive data, but taking that next step to help management understand and strategize future action.

The contribution you can make to your organization is blending technical knowledge (the how-to) with seasoning and experience to understand what will work for your organization, considering culture and management bias.  Technical knowledge will give you the same answer every time, but knowing how to use that knowledge like a craftsman’s tool to aid in achieving business objectives – that is the key to success as a Compensation professional.

The time will come when you find yourself between a rock and a hard place at work.  Your ability to produce project deliverables will be challenged by staff shortages, multiple projects simultaneously coming due, or the requirement of particular skill sets not possessed by your existing personnel.  And while you are stressing out Senior Management will not let matters slide until circumstances are more convenient.

You need help.  You need it now.  But do you need a hired-gun professional, a consultant?

You could try to find a temporary Compensation Analyst to run some numbers for you, and if that will solve your immediate dilemma you need not read any further.

However, if your challenge is deeper and broader than simple spreadsheets, a proven strategy to ensure success is to obtain the services of a seasoned expert, one who can provide hands-on advice and counsel, who can take data from the analyst and advance your agenda: What does this information tell us?  What can we do now?  What corrective strategies can be employed?

The following circumstances would encourage the use of outside expertise:

• Technical knowledge is not currently available to existing staff (i.e., international, executive, expatriate or sales compensation).  This may not be the time for on-the-job training.
• When the current staff is overwhelmed and you need temporary assistance to take charge and drive your project(s) forward
• Interim replacement for absent staff (separation, leave, etc.).  Someone to fill the gap, holding things together and advancing the agenda until the replacement is secured.

External professionals have the experience and broad perspective to impact your business, not simply report on it.  If used properly and in a focused manner subject matter experts will save you time, money and sleepless nights.

Caution: many professionals currently between jobs (“in transition”) consider themselves temporary consultants while continuing their job search.  Dependent on your time line these individuals may not be able to provide the focus or dedicated support (staying power) that you need.

As you would expect, specialists cost more than general labor, on account of their broad and deep capabilities that are available “on demand”.  However, you should consider whether the expense is justified before you commit.

• An improper one-time “fix” will cost a great deal more over time (dollars, morale, turnover, training etc.) than if the problem was properly corrected in the first place
• Consultants have the seasoning and long service expertise to look past the figures to the root causes and underlying issues
• Someone who has a broad background working with diverse industries, geographies and employee segments will provide a richer perspective as to how best to approach your particular challenges

Of course you can decide to do the work yourself, but that strategy often presents its own challenges.

• Your staff may be slow to focus on projects additive to their full time job, plus they will need to overcome numerous day-to-day distractions.  Project time lines will be drawn out.
• Internals tend to focus on easy-to-achieve short term improvements, like low hanging fruit, vs. what core issue decisions are needed to affect a permanent solution.  This is not solving the problem, but shoving it into a closet – with the other skeletons.
• Managers are often in a hurry to check off the project (problem) as completed (fixed) or “addressed” – the so-called “check mark” management style.
• Internal staff is often restrained in their thinking by experiences limited to the What and Why of their company.  They may not be able to see out of the box into the wider universe of possibilities.

If you have decided to bring in outside experts, exercise care that you utilize them effectively to gain the maximum value:

• Proper scoping of the project saves time and money.  Understand the challenge you need addressed, as confusion here leads to greater expense and longer time lines.
• Scrub your data before handing it over; otherwise you’ll be paying for “grunt” work easily completed by inside staff.
• Monitor work progress, lest you end up with charges for unanticipated (though not specifically prohibited) work.  The grey areas will cost you every time.
• Avoid consultants who are incented by billable hours; they may encourage additional steps that render your project(s) more complex / expensive.
• Be cautious of fancy report formats and four-color charts; you are paying extra for the fluff.

Seasoned external experts have the advantage of concentration; they focus on the project at hand, while avoiding the trap of non-productive time (socializing at work, interruptions, meetings, other distractions from the work at hand).

If you need Compensation expertise to help address your challenges, help you achieve your objectives and partner with you to success, take the step and make the call.  It will be worth it.