I share my house with a brood of cats and it’s been that way for as long as I can remember.  I love them, but recognize that they are stubborn, stubborn, stubborn creatures, and at times it seems like they’re the ones who run the place.

Have you ever tried to change a cat’s food, or their litter box, or their water dish?  They don’t react well to the new and different, and when they don’t react well their loud and disdainful behavior can really disrupt your day.

These felines are also creatures of habit, preferring a daily pattern of repeated behavior that in their view creates a safe and reassuring environment – where they feel the most comfortable.  Break that pattern and you get the look, or worse.  I can attest to the fact that dealing with the stubborn and habitual can be a real trial.

In the business world there are many companies run by a leadership who possess similar inflexible behavior, an aversion to breaks in pattern.  Those who like things just the way they are.  Whoever coined the phrase “if it ain’t broke, don’t fix it” was probably a charter member in that “blinders on, head in the sand” leadership cadre who likes things just the way they are.

While it’s a truism that yesterday’s strategy and operating principles are rarely a recipe for future success, how often do you see managers hang on to what used to work – until the signs of failure become so visible and so painful that it can no longer be accepted?

Comfort

These folks with their heads in the sand are not necessarily bad managers, or even poor business leaders.  What they are is comfortable, and when we’re comfortable we feel safe, relaxed in our surroundings, familiar with what needs to get done and a bit over confident about our control of our business environment.

When we feel comfortable and confident we prefer to repeat those same actions that brought us to our present state of mental ease.  In other words, we don’t like to rock the boat, we don’t like “change for the sake of change,” and we’re skeptical of new and unproven techniques.  We get stubborn and dig in our heels.

It’s worked before, it brought us success.  Let’s leave it alone.

However, when someone or some event breaks that comfort level (new competition, weakened economy, technological advances, etc.), the first thing we experience is anger that our warm cocoon could be shattered by new business realities.  Soon enough though, that anger will convert to a sense of fear, whether we admit it or not.  More likely we’ll act out in an aggressive fashion that disguises the panic we feel.

Fear

People can be fearful of change, especially leaders.  Because they don’t know the new rules, because there are risks when implementing new strategies, and those who stick their head above the crowd can get it chopped off.  We’ve all seen that happen.

When you must get yourself up and out of your comfort zone it’s a natural reaction to feel defensive and unsure about what you should do next.  Leadership may not have the competencies or the experience to adapt to new business challenges.  It’s not difficult to lead when things are going well.  But when the going gets rough, when the pressure is on to change course, to implement new strategies, not so much.

I’m not sure about what to do; everything has changed.

Pushed out from their safe environment management can find itself unsure, defensive and unsettled about the correct way forward.  And until matters settle down again they can be difficult for practitioners to work with.

You can help them

You may consider managers stuck in the past as living dinosaurs, but have a care because these beasts have teeth.  They don’t like this uncomfortable new world, and they tend to shoot the messengers.  To offer assistance to a leadership challenged by the unfamiliar practitioners need to step up and provide steady, confident and reliable advice.

• Acknowledge the past: Yes, previous strategies have worked well and brought the company success and financial strength, reputation and a strong foundation for the future.  A pat on the shoulders for management.

• Focus on the why: Whenever advocating change, focus your message, your research, your examples and your entire business case on why your recommendations lead to solutions.  Keep your eye on the goal, not that you’re changing patterns of behavior.

• Dangle the carrot: Always point toward the business and personal success that would be the result of your recommendations.  Besides showing the achievement of business success, emphasize that the deciding leadership will gain credit for managing the organization through these difficult times.  Stroking the ego doesn’t hurt here.

The next time someone comes to you with an idea to build a better mousetrap, listen to them.  Keep your eyes, your mind and your options open.  Instead of being afraid of change, embrace the opportunities presented.  It can make for a better tomorrow, and you’ll shake the tag of “stubborn.”

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’re stressing out those problems Senior Management won’t 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?

Reaching Out For Help

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

However, if your challenge is deeper and broader than simple spreadsheets, you might seek out 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?  Where are the risks?  What corrective strategies can be employed?

The following circumstances are examples of when the use of outside expertise can be beneficial:

• 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 multiple 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.  They’re still looking for their next permanent job.

As you would expect, specialists cost more than general labor, on account of their broad and deep subject matter capabilities that are available “on demand.”  However, 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 can provide a richer perspective as to how best to approach your particular challenges.

Or Choose To Go It Alone

Of course you can decide to do the work yourself.  Perhaps you don’t have the budget, have never gone “outside,” or simply feel defensive about admitting you need help.  But that “little engine that could” strategy can present its own challenges.

• Your staff may be slow to focus on projects additive to their full time jobs, 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 organization.  They may not be able to see out of the box into the wider universe of possibilities.

Help Needs To Be Monitored

If you have decided to bring in outside assistance, 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 themselves 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’re paying extra for the fluff, which can sometimes disguise a scarcity of core material.

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).

So if you need a bit of help to address your Compensation challenges, to help you achieve your objectives in the face of staffing issues and simultaneous projects, give some thought to calling for roadside assistance.

You’re in charge.  Or at least you have a say in developing compensation programs for your organization.  That’s a vital responsibility, especially if all is not well in your world.  Perhaps an audit of those pay programs has generated worrisome results, or the latest employee engagement survey showed a large measure of discontent.   Perhaps turnover is rampant, or you’ve just sat through an uncomfortable meeting with a boss upset over the runaway cost of labor.

Something has to be done to better utilize your payroll dollars, because too much money is dripping out of your company like a leaking faucet – and the rest isn’t giving you much bang for the buck.

The challenge, then?  You have to change your world.

How do you do that?  There are program design considerations, costing models, impact studies, external and internal analyses, even focus groups perhaps, but at the end of the day you can’t simply snap your fingers.  Your ideas, your recommendations need to be approved by the higher ups.  How do you make that sale?

Let’s start with the easy part; what not to do.

When facing senior leadership with business-impact proposals the quickest way to be shown the exit is to tell them what they don’t want to hear.  Sounds obvious, but basic judgment errors are commonplace when you’re so caught up in knowing the answers that you forget to focus on the right questions.

A few examples of how not to sell your ideas:

Leading with “it’s the right thing to do” is rarely a good idea.  Using an emotional, feel-good rationale is seldom a strong argument and is easily sidelined by the bean counters or anyone playing the “this is a business” card.

“Surveys tell us . . . “ can be another weak point, because the argument that everyone else is doing something hasn’t worked in a debate since you were a kid.

Over analysis: the more extraneous numbers you throw at senior management, the more you rely on charts, graphs and regressed formula trend lines to make your point, the more vulnerable your proposal becomes.  The risk is in having the numbers become the story.

I’ve seen senior executives feel compelled to ask multiple and often tangential questions about the support calculations, just to show they’re engaged and shouldn’t be taken for granted.   Don’t let your proposal  rise or fall on the comfort level of decision-makers struggling through the details vs. the concept.

Principles of the sell-job

What follows is a series of suggestions you should consider before walking into that critical proposal review meeting.

First and foremost make a business case where your recommendations illustrate that the company will win.  Management’s prime directive is to act for their own self-interest; altruism is over-rated in the boardroom. Once you have them nodding their heads at their own good sense, they’ll be more easily moved to support your plans.

Tell a story; start with a statement of the problem, then augment with a back story to explain how the situation has become so precarious.  Show the impact of inaction, then close out with your recommendation  - highlighting impact, savings, reduced turnover, whatever the goal  - that solves the problem.

Do you know the ROI for your proposal?  You had better have one, as that could be your strongest argument.  Pros and cons?  Are there potential glitches?  Rarely will you have simple, uncomplicated solutions that can’t fail.  So it would be better for you to address any troublesome possibilities early on, to soften the potential “gotcha’s” that could trip you at the worst possible time.

Always have a backup plan, as all-or-nothing strategies don’t work well outside of the movies.  You’ll need a plan “B” in your back pocket, just in case.  Better to get half a loaf today and be able to hope for more later, than crash and burn today because of pride and stubbornness.

Which means you shouldn’t fall on your sword over ideas, but be prepared to compromise.  Proprietary ownership of ideas (I want it my way) should be secondary to achieving the business goal.  But often times pride does get in the way, sometimes derailing sound concepts for the wrong reasons.  It’s not about you.

The numbers rarely speak for themselves; in fact you’re at risk if you use statistics as your main argument.  Instead, paint a picture with text.  Use all those figures only to support the point you’ve already made.  Strategic thinkers balance technical skills with the art of persuasion, influencing others to undertake the desired action.  They don’t throw out a bunch of numbers and say, “see?”

———————————–

Even when the task ahead is daunting, go ahead and take that first step.  It’s usually the hardest.  But if you’re prepared to achieve incremental gains vs. sweeping changes, if you keep your eye on the ultimate goal, you will find the second step is easier, then the third and so forth.

“Rome wasn’t built in a day” is a classic and over-used phrase, but for good reason.  Because it makes sense.  Because it rings true.  So think of Rome when you try to change your world.  Just don’t act like Don Quixote and run off to chase windmills.

I don’t get it.  Can someone help me understand?  Why are some organizations interested in what other companies are planning to do with their midpoints next year?  I presume that’s the case because there are surveys out there compiling and reporting such data.  But who really cares?  Aside from anecdotal information I have never understood the importance of this reporting.

To be fair, perhaps my experiences are the exception, because I’ve never used that data in program analysis, or even reported it.  But somebody must be using it.  Somebody.

I can only guess that I’ve missed something ; maybe I should have taken another WorldatWork class, because the issue has never arisen from any employer I’ve dealt with, either as  an employee or an outside consultant.  Which leads me to ask, do some companies actually recommend raising their midpoints on the basis of a survey(s) announcing what other companies are doing?  Is that metric as important as what is being paid for particular positions, or what the average merit spend might be next year?  How does projected average salary structure movement relate to my company’s unique situation?

Can you envision  recommending  to senior management that midpoints be raised by X% because that is the projected average midpoint increase of other companies?

For me the focal point of survey analysis has always been to determine the competitiveness of our current  midpoints.  In planning for next year we should adjust those midpoints to either remain competitive (our midpoints are already there),  to improve our standing (our midpoints lag the market), or freeze them (midpoints already pegged above market rates), no matter what a survey reported was common practice.  Am I wrong here?  I have always thought that my company’s salary structure should move in relation to our own competitiveness, regardless of what anyone else is doing.  Otherwise we could be making improper adjustments – either too much or too little.

And what about the expense involved?  Contrary to what some pundits have assured me from time to time, midpoint growth can create costs.  There is no free ride.

• When an employee’s base pay drops below salary range minimum on January 1st, do you cover that amount – or wait until the next review?  Whenever that might be.  The fair thing to do would be to raise the employee to minimum and then (or later) grant a merit increase on top of that.  Extra cost though, right?

• Higher midpoints push experienced employees further from the internal “going rate” – creating pressure to restore the balance.  Have you ever explained to a long service employee why they weren’t being paid at least the midpoint?

When are these midpoint estimates made, and how accurate are they?  They’re really guesstimates, and many times the questionnaire is filled out without due consideration, just to get the form completed and sent away.  After all, most companies won’t confirm their new structure commitment until  @ November (senior management sign-off), while the survey questionnaires are completed in mid-summer.  So how good a guess do you make in August?

Btw, a company’s salary structures (grades and salary ranges) are usually segmented along the lines of hourly, non-exempt, exempt professional, and management employees.  To gain a clear picture of your competitive marketplace you should consider that each segment is moving at a different rate.  For example, it’s likely that management pay is growing at a different rate than for hourly employees.   Suggesting that only a single number would reflect your entire population would distort the reality of your multiple markets.

Now I suppose there may well be companies out there that have changes to their reward programs contractually tied to “market movement” or even structure (midpoint) growth, but do you think there are that many so governed?

So, can someone  tell me why analyzing other company’s guesstimated midpoint movement  is important?  I’d really like to know.

Everywhere you look these days companies are striving to find ways of doing more with less;  jobs are eliminated and the survivors have to work harder, employee reward budgets are trimmed to the bone or frozen, and the concept of pay-for-performance itself is coming under challenge.  Across the country you can hear the constant litany of cut, cut, cut.

Employee morale has plunged off a cliff.

However there is one reward strategy you can employ that doesn’t involve following the popular drumbeat of negative messages and takeaways.   Already other functional departments (i.e., Marketing, Engineering, Advertising) have taken a different tact from that “me too” philosophy.   Instead, creative minds set themselves apart, pushing brand identification to carve out market niches away from the beaten path.  Perhaps Human Resources could take a page from that playbook and view employee rewards in a more forward thinking fashion.

HR can stand out from the crowd.

Why not create a pay philosophy of greater rewards coupled with greater expectations?

Companies fear wasting money on those who don’t perform, so they often limit the opportunities provided by their reward programs.  They can’t afford a reward strategy that balloons payroll without an adequate ROI.  To take a different road they could increase the amount paid to key employees while restricting those who don’t perform.  That would place the high achievers in your organization at a fair or even generous pay level, but the winners here would be only those who deliver an ROI back to the company.  You can afford to reward high performers, can’t you?

Employees who produce results are worth the money.  If you’re fearful of overpaying those who aren’t performing, you hold the solution in your hands / policy manual.  All it takes is the discipline to hold employees accountable and to take action against those who aren’t performing, who aren’t worth the money you’re paying them.

Do you know what percentage of your workforce is rated at an average or lower level of performance?  50%? 60%?   If you still grant every employee an annual increase, you won’t be able to differentiate and properly recognize your key performers.  You won’t have enough money.  In that case the reward bar will be lowered to cover the most common performance level.   Instead, why not raise the performance bar and get rid of those who can’t keep up?

If a manager has $10,000 for annual increases and tries to balance rewarding both high and average performers, the increases granted won’t be enough to recognize key players.   Why?  The merit spend is calculated on average performance, but high performers need much greater increases to feel recognized and appreciated.  However, a request to grant more than $10,000 will be denied, so what do most managers do?  They trim the increases of their best performers, in an effort to spread rewards as broadly as possible and keep everyone happy.

Does that work?

Of course not.   High performers will be discouraged and may rethink their future efforts as well as their commitment to your company, but your “joe average” will be pleased.  As behavior rewarded is behavior repeated, by this make-everyone-happy tactic you will have encouraged more average performance and less high performance.  Does that sound like your reward strategy?

Okay, but if this concept is such common sense, why is the practice of holding employees accountable so seldom used?

The Management Fear Factor

• Fear that employees are somehow “owed” annual salary increases.  We have to give them something.
• Fear of not knowing how to conduct effective performance appraisals.  Do they really measure performance?
• Fear of alienating  the majority of  average employees (see bullet #1)
• Fear of exercising  the discipline necessary  to manage employees (they want to be liked)

With a process designed to monitor and weed out the lower performers, and at the same time pay the higher performers well,  over time you would retain more of those you want and rid yourself of those you don’t.  The employee performance bar would rise, fostering a dynamic work environment that will feed business performance.

You can afford to do this.  Consider the impact of increased performance levels on your bottom line.  Isn’t it worth the initial outlay of money to make that happen?

Caution:  the bean counters (Finance) are perennially afraid of spending a dollar to save two – or in this case, spending a dollar to earn three.  They believe that the dollar cost is real, while the suggested gains are “soft”; promises that can’t be guaranteed.

There is no easy way around this phobia short of direct intervention from the top.  Lacking Senior management support compensation entrepreneurs will face a wave of passive resistance, if not outright defiance by managers tying to “help” the average employee.

Providing high performing employees with greater rewards can create a win-win scenario, a greater attraction for talented outsiders, an improved  team atmosphere focused on pushing the company forward – and less inequities to drag and drain the goodwill you’ve established.

Try it.  Spend a dollar and earn three.  It’ll be worth the effort.

For many global companies with a direct sales force the design and administration of their compensation program is in a constant state of flux.  It always seems to need a further bit of tweaking, as dissatisfaction follows in the wake of any plan design.  Why?  Every uncomfortable participant who’s on the receiving end, from senior management to the employee pounding the street, feels that they know what’s wrong.  The verdict is that not enough money is offered for successful performance.

Of course.

Somehow though, that knee-jerk reaction seems the easy criticism.  You expected that too, right?  The issue though, goes deeper.  You can have in place the most well-designed incentive scheme for your industry (on paper), but if your quota setting process doesn’t work, you’re in trouble.   Because any corresponding reward design will miss the mark by a margin; poor quotas reflect ghosts, not reality.

Improperly designed achievement targets (recognized revenue, products sold, units shipped, etc.) present objectives that are viewed as unreasonable for one reason or another.   Stretch goals can be a useful strategy, but not when the numbers are considered as out of reach.  That perception guarantees that those involved will not try as hard as they could, because they feel the effort will not be rewarded.

This cynical “can’t be done” criticism is a short step away from employee disengagement (failing employees will start to question their skills – and morale will sink) and the inevitable departure of key sales talent for greener pastures.

Why does this happen?

Everyone complains about money, so it always seems easier to moan and snipe than to implement real change by improving the way many companies establish their sales quotas.  How do they get it wrong?

• The “last year plus X%” strategy: a simplistic approach that hits everyone with the same percentage increase in quota.  This approach rewards average performers and penalizes home run hitters (stretch performance becomes expected and a minimum standard for the future).

• Total revenue target divided by the number of sales representatives: another easy to calculate process, where you simply divide the revenue “pie” into equal portions.  Everyone is treated the same, regardless of personal or territorial distinctions.  But the selling process does differ whether you’re in India, Argentina, France or the US.

• Using a top down “here’s what we need you to do” vs. bottom up “here’s what this particular territory can generate” approach to generating targeted goals.  The management decision on gross revenue is based on what the financial analysts say is needed to protect the stock price (Earnings Per Share – EPS).  Those needs (targets) are filtered down to the territories, usually with a lame explanation of where they came from.

Territory or geographic distinctions become blurred, to the detriment of motivating the sales force.

When your quota setting process relates more to an arithmetic exercise or an illusionary “concept” figure, even generous incentive schemes won’t attract or retain talent, because seasoned sales professionals know the odds for success have been stacked against them.

Unrealistic targets can destroy morale, initiative and employee engagement like rain at a picnic – and how do you recoup from a discouraged workforce? Trust is hard to build, but easily broken.

When a workforce feels that they cannot be successful they tend to give up the effort.  They may even give you up as their employer.

Snap your fingers and fix this.

Why is changing the quota setting process so difficult that management is reluctant to even try?

• A salesperson’s natural tendency to complain breeds skepticism.  Sales people cry “wolf” a great deal, always seeking to better their chances to do well.  The easier the target the happier they are.

• In order to protect the company’s stock price from unwanted fluctuations financial analysts often require the company to commit to achieving certain goals.  When those targets are forced on sales employees, the usefulness of even a highly accurate targeting process becomes moot.

• Some managers like to “pad” targets to ensure that lower performers don’t drag down overall success.  This interference by sales management blurs the line between objective and subjective targeting.

• Acknowledging national distinctions in the selling process may be difficult for some managers to explain.  It’s easier to treat everyone the same, no matter the circumstances.

While an overhaul of your company’s quota setting process is likely to be a hard sell, ask yourself a series of questions to gauge whether your current arrangement passes the smell test.

• Are goals based solely on sales history (last year, average of last three, etc.) or are economic realities of a specific territory considered?

• Is a territory given a target without consideration of who is covering it (junior or senior rep)?

• Is sales management allowed to set goals in a way that the sum of all territories would exceed the total goal? This attempt to “make up” for individual failures by stretching everyone is resented by sales employees.

• How many representatives achieve target level performance?  The lower the number the greater the credibility gap with “targeted” incentives.

Goals for your sales force should be based on a combination of sales history, potential, economic conditions, channel shifts and any other factors that would affect the sales effort.  They shouldn’t be an arithmetic exercise that doesn’t take into account territorial realities, national or cultural distinctions and incumbent capabilities.

One of the most negative management stereotypes is the image of the corporate “yes-man,” that weak-kneed subordinate who is always quick to agree with the boss.   This is the empty suit having no other opinion than what’s expected.  Can you picture the nodding head and vacant smile?

That’s not your picture, is it?

Do you recall the old saying that goes, “see no evil, hear no evil, speak no evil”?  The modern version of this adage describes one who willfully turns a blind eye, refuses to acknowledge and even  feigns ignorance when confronted with activities that they should otherwise say or do something about.

That’s not you, is it?

Do the compensation professionals you know, including the one looking back at you from the mirror, provide objective advice and unbiased counsel to management, or do they simply offer support and justification for what management wants to do?

Do you stand up?

There are always opportunities for compensation professionals to turn a blind eye / closed mouth to improper practices taking place in their organization:

• Finance has lobbied Senior Management that the average merit increase next year should be x%, and now you have been asked for your recommendation
• The performance appraisal process (forms completion and assessment reviews) is poorly handled and rewards are often granted without legitimate justification
• A Vice President wants to create an Office Manager title for a long serving Secretary.  This would also entail a higher grade and promotional increase.

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

• Do you provide Senior Management with an unbiased recommendation, based on your competitive research and an understanding of compensation strategy?
• Do you question those managers who wish to grant increases / bonuses for the wrong reasons?
• Do you strive to hold the line on meaningless titles that increase costs, create employee equity issues and provide the company with little or no ROI?

What’s the worst that can happen?

Are you concerned that having an opinion out of step with senior management will damage your “team player” image?  That your career would suffer because you can’t get along with others, that you “don’t get it”?  Or do you just find it easier to get along with everyone and ride the tide wherever it takes you?

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

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

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

Repeat after me – I will add value

You don’t have to fall on your sword career-wise to make a point, to stand up for yourself, to add value to the decision-making process.  Sometimes you just know the direction management is taking, no matter the facts surrounding the issue.  While leadership may be plagued with personal biases that often trump rational analysis, that doesn’t mean that you should step away from doing your job.

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

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

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.