Your company is seeking to employ a Financial Accounting Manager, and the leading candidate is currently “in transition”.  Human Resources has pegged the market value of the job at $ 75,000 (midpoint), but it’s known that the preferred candidate (Bob) will accept $ 65,000. A seasoned and experienced professional, Bob was previously paid $76,000 by his last employer, but was caught up in a restructuring staff reduction.  He’s been out of work for almost a year and is getting desperate.  Relocation is not an option, and he’s worried about feeding his family and paying the mortgage.

When the decision point arrives, other less qualified candidates are already making $ 70,000 and asking for $75,000.  Some hiring managers would look at this situation as a no-brainer.  “Let’s hire our “A” candidate and save $10,000 to $15,000” would be the smug decision.

That wasn’t hard, was it?   An exceptional candidate has been gained at a low ball price.  The manager deserves a pat on the back for saving the company money, right?  But, wait a minute.   Perhaps it should be a boot in the butt instead.  You make the call.

A savvy professional like Bob will have a sense of the competitive market, so he’ll be aware of having taken a significant pay cut to land this job.  So how excited will he be with the offer?  Today, he’ll be delighted and will celebrate getting a job and finally having money coming in again.  Tomorrow, not so much.

How long before resentment grows that he was taken advantage of – gotten on the cheap?  What will happen to his enthusiasm, engagement, morale?  What will he come to think of the company, never mind the hiring manager?

What is the likely future for Bob?

It is always safe to presume that how an employee is treated will become known; otherwise you’ll be stuffing skeletons into a closet – and you know how that trick never ends well.  So when Bob confirms the low ball treatment, what reaction can you expect?

• Angered by a sense of being taken advantage of he could continue with his job search – looking for a better opportunity – while still working for you

• His job performance will suffer, dropping from 110% to automatic pilot somewhere south of Satisfactory.  He’ll be going through the motions – not exactly the dynamo you thought you had hired.

• Bob’s attitude will turn negative and he’ll become another disengaged employee – critical of the company and management, doing no more than he must in order to get by

• And yes, he’ll ultimately quit, but on his terms and timing.  His anger will have kept simmering and he’ll likely feel little concern as to how his departure affects the organization.

What you have now is a bad hire, in retrospect; that situation is unnecessary and easily avoidable if you treat candidates fairly.  Look at it from the candidate’s perspective; when your back is to the wall and you feel your “rescuer” is taking advantage, that feeling causes a pit-of-the-stomach resentment that lingers and festers.  And it costs.

Let’s tally up the cost

The manager claimed a cost savings by the hiring decision.  But when you factor in the longer term ramifications of that decision, how do the initial savings hold up?

• The hiring decision saved $10,000 to $15,000 per annum by consciously underpaying the candidate

• What is the discounted value of a disengaged employee who doesn’t perform as expected or desired?

• What is the value of time lost when Bob quits and the job is vacant while a replacement is sought?

• What is the value of hiring a potentially more expensive replacement (plus agency costs) and perhaps relocation?

• What is the value of productive time lost while a new employee gets up to speed?

• Finally, what is the subjective value of a discontented employee in your midst, possibly poisoning other employee attitudes?

So the next time a hiring manager proudly announces how to save a bunch of money on a candidate who’s in transition, take a moment to think it through.  You may want to consider a boot in the butt instead.

It seems that everywhere you turn these days you face a bombardment of professional advice from self-proclaimed “experts”, especially in Human Resources.  These people assure you that they understand your problems and have the right solutions for you and your business.  All you need do is read a book, attend a webinar or better yet contract for their consulting services.

Sounds like a diet pill, doesn’t it?  Simple and quick.

Promises like this cover every aspect of our business and personal lives.  Pick an issue and the answer is out there.  Somebody can help us, and that somebody is our “answer man.”  We only have to listen, watch or read whatever it is they’re offering.

You can’t escape the TV infomercials, the newspaper advertisements, magazine articles or even blog and social media sites without an endless flow of experts telling you that they have the answer you need.

• “Guaranteed to quadruple sales within twelve months”

• “Maximizes HR Effectiveness and value through the use of . . .”

• “Keeping Leadership Talent Engaged”

• “Designing Employee Policies for an International Workforce”

• “The Five Causes of Low Morale – and how to avoid them”

• Etc, etc, etc

You get the point.

Now, here’s the but . . . .

If that’s the case, that the answer is out there – and for a price waiting for you – why do we continue to face the same problems over and over again?  Why are managers still making poor decisions, wasting money and creating employee morale screw-ups from dawn to dusk?  Why do the business headlines constantly bemoan reports describing litigation over wrongful or illegal management behavior, or the dubious business decisions that send companies spiraling into financial trouble?

Isn’t anyone paying attention to the answer man?  Or is the advice simply a load of crap?  Are these experts really just spouting head-game theories and viewing business problems from an academic vs. practical viewpoint?

Whichever it is, these “I have the solution” messages never stop.   Like a constant propaganda stream radio-beamed across the border – the broadcast light is always on.  The buzz phrases may change from time to time, but our desire for quick fixes doesn’t diminish.

My theory or yours?

If the “experts” do have the answers – color me skeptical – we need to ask why their message is so often ignored.  Several scenarios are possible:

• Subject matter authorities often speak over our heads, using buzz phrases and $100 words

• Reading or listening to this stuff is hard work; the text is dry, boring and not often engaging

• Too much of the advice is contradictory to what you read / heard already – so who is right?

• Academics often lack credibility in the real world; they “just don’t get it”

Whatever the reason, the drumbeat of advice is not being absorbed and acted upon – because the problems remain.

Therefore . . . .

I’m struck by the merry-go-round aspect of constant advice without real solutions.  We see a continuous need to enlighten people and businesses on how to be effective, but it’s a need that never seems to end.

Maybe the analogy to a diet holds some truth; consider how many books are out there on that subject – yet up to 30% of the population remains obese.

There’s an old saying, that if you build a better mousetrap, the world will make a path to your door.   If common sense and up-to-date technical knowledge point the way to a better tomorrow, why do so many companies and their leaders stay in the dumb zone?

If the cure is out there, why is the patient still sick?

I’m thinking that the message is wrong, the audience isn’t listening, or perhaps we’re all being scammed by re-packaged “new” thinking.

Which is it?

Have you ever used a babysitter?  This is when you have someone else assume your responsibilities while you take a break and focus on something else.  The babysitter stands in for you, is you during the period of your absence.  Someone else does your job.

Typically we think of babysitting when there’s actually a dependent child involved, but it’s not uncommon for ineffective managers in the workplace to use the same concept when dealing with their employees.  These managers seek to use the pay that their employees receive as a surrogate for leadership – for keeping those workers complacent, retained and generally “in line.”

The practice of manipulating rewards presumes that the employee will chase the money, and will be happy with their lot, while at the same time will not require much in the way of supervision, periodic direction or even meaningful conversation.  The thinking here is that, if I provide you with enough rewards you will act as desired in order to not jeopardize those rewards.  The goal is to place the employee’s attitude and performance on automatic pilot while the manager is engaged elsewhere.

So far, so good.  Not necessarily a problem, right?  The red flag goes up the pole when you ask whether these monies are warranted by either performance or business need, or are they simply bribes?

What are we talking about?

Scenarios where pay is used in lieu of actual management are easy to spot.

• The Grand Giveaway:  Where managers try to give away as much money as they can to as many as possible, not worrying overmuch with distinctions between individual performances.  The key is to build an employee’s appreciation of their manager’s largesse.

• Title inflation: The promise of bloated and meaningless titles that distort organizational structures, for the prime purpose of rewarding employees in lieu of cash.

• Over rated performance:  Play the good guy by over-rating performance during salary reviews.  Culprits are often seen rewarding activity over results.  So look busy!

• Assured compensation: Take the risk out of rewards.  Everybody receives an annual merit raise, everyone earns a bonus.  This fosters an attitude of entitlement.

• Counter-offers: “Let’s make a deal” attitude to keep resigning employees from actually leaving; a dangerous practice that increases costs and lowers morale.

What’s the cause of this behavior?   Managers typically receive inadequate training (if any) on how to use their company’s pay programs, so many use pay as a crutch instead.  Spending the company’s money effectively and efficiently isn’t on the radar screen.  They use employee pay like a club to get an employee’s attention.  And once they have that attention the manager is off doing something else – with the presumption that pay will substitute as supervision and motivation while the manager is absent – kind of like a babysitter.

Weak and ineffectual managers don’t actually manage their employees, in the sense of performance direction, leadership, setting good examples and decision-making.  Instead, they want to be liked.  They want to avoid conflict and they don’t want anyone to quit.  They want employees to get along, and to help foster a friendly team atmosphere they try to manipulate pay in support of their efforts.

It’s really kind of a bribe.

So what is “managing” to these people?  It’s not about making hard decisions.  Too often it’s trying to get the most for their employees, deserved or otherwise, whether the organization gains in the process or not.  The manager is focused on their own interests, and is using someone else’s money in the doing.

Why it doesn’t work

Relying on pay as a replacement for management has a short term effective life cycle, at best.

• Employees see arbitrary equal pay treatment as de-motivating to high performers.  Why bother extending yourself if you’re going to receive the same reward as the guy doing crossword puzzles?

• Employees resent favored-son treatment; the names of those who benefit for non-performance reasons will always become known.  There goes your morale.

• No amount of money replaces the value of honest performance direction and feedback.  Those with an interest in learning and growing appreciate the help.

• Absentee managers lose the respect of their employees, who know what’s going on.  Remember that employees leave managers, not companies.

• While employees will take any money carelessly handed out, the organization will not gain because of it.  So these “rewards” are ultimately wasted.

For managers who need a crutch to help motivate and retain their employees, to help them do their jobs, the above cautions likely won’t make a difference.  Their goal is not to manage, but to get-by, to be liked by their employees and to avoid disruptions to their routine.  This is not leadership, but administration.

But for those managers who wish to make a difference, who understand that managing employees is a challenging and rewarding role, abrogating responsibility through babysitting is not an option.  They recognize it as the opposite of management, a damaging practice that will not enhance anyone’s long term career prospects.

When it comes to paying employees for the work they perform, what do you think your workers expect?

__________________________

Does anyone in management ask themselves this question anymore?  Or is the collective attitude these days more typically either 1) “they’re lucky to have a job,” 2) “where are they going to go?”, or 3) my personal favorite, “I pay, you work.”

Where does that indifferent attitude come from?

When employees feel mistreated you will see the result through lowered morale, mental disengagement, reduced productivity and even separations.   Given the risks involved it’s discouraging that not enough of the people in charge actually consider the issue of pay from the employee’s perspective – the people doing the work.

Such an important question should generate a better response than guesswork and bias, shouldn’t it?

Any manager worth the title should anticipate employee issues, especially those with the power to make or break the business.  It’s all about knowing your employees, about being prepared.

Because isn’t payroll your largest single expense?  Depending on the industry it could represent 40% – 60% of total revenue.  Shouldn’t how you handle pay be carefully considered the same way you would the cost of raw materials, the acquisition of a new business, or the financing of more brick and mortar?  You should look at this expense from every possible angle, to better understand the underlying causes, and how you can make it work for you.  To better manage your reward dollars, without harming the business you need to understand those factors that impact employee pay.

Taking that hard look will mean trying to understand the employee perspective – the human factor behind the cost of labor.  It will mean understanding how company pay decisions are perceived by those on the receiving end.

It does help when you think of pay from the other side of the desk.  Employees provide a service and you pay them for it, right?  That shouldn’t be the end of the equation, because money doesn’t manage people – you do.

So, do you know what employees expect from managers, and from the company?  Their basic wants and needs have a direct connection to their performance, and their commitment to your organization.

What do employees expect?

While circumstances among individual companies and employee groups might vary somewhat, it is safe to say that employee expectations fall into several broad categories:

• Competitive pay – no surprise here, because that’s probably what you want too.  You don’t need to be a high payer, and should avoid the label of “law baller,” but you should ensure that the pay opportunities you provide are consistent with market practice

• Opportunity to earn more – employees should be aware that more money is available to them, through pay increases, variable compensation, even overtime as appropriate.

• Regular pay reviews – don’t let employees hang in the wind; avoid the stereotype of employees worrying over how to ask the boss for a raise.  You don’t have to grant anything, but let employees know up front that you’ll be scheduling a review.  Anniversary or focal date is less important than that the employees know to expect a review.

• Timely and accurate payroll – anything less than 100% performance is a problem, as perfection is guaranteed – especially by those lower paid employees who live paycheck to paycheck.  Payroll providers will tell you that you never hear from the 99%, but only from those with problems.  And the calls are always accusatory.  No one ever has a question about their pay; if something’s wrong, you messed up.

• Fair treatment – employees don’t like “favored sons” or special treatment cases – especially if the perception is that they are not deserved.   Recipients will become known, so don’t think of putting any skeletons in the closet.

Do you understand these expectations?  Not so earth shaking, are they?  Do they make sense; do you consider them reasonable?  Are they the expectations that you have yourself for how you want to be treated?

How you and other managers react to someone’s expectations, by either actions taken or in some cases lack of action (ignoring), will set the tone for your employees; you dismiss their concerns at your peril.  You don’t have to do anything, of course.  But your eyes should be open and your decisions should be based on knowledge of what your employees are thinking – and expecting.

Otherwise you’re making decisions in the dark, and how many gems of wisdom come from that process?

Think about whether management treats employees as “we” vs. “them.”  Are they viewed as boxes on an organization chart or as real people?  Are they considered an important asset to the business, or a cost item to be managed (dealt with)?  Whatever the answer, these attitudes will become known.

So take the time to understand where your employees are coming from.  That bit of research will provide dividends down the road – no matter how you choose to pay your people.

You’ve seen your company’s want ads and heard the pitch from your recruiters; you offer competitive wages to qualified candidates.  That’s got to be a strong hook for attracting talent, right?

Big deal.

Pay structures are updated based on market trends, so the opportunities offered employees support your retention and motivation strategies, right?

Not enough.

Most employees presume their company is already meeting (or aspiring to meet) the goal of competitive pay.  Companies routinely advertise the practice (“we offer competitive wages”) and candidates in return expect this of potential employers.  But what happens when your goal of offering competitive pay is finally achieved?  Are employees grateful?  Can companies rest in their efforts to attract, motivate and retain?

I’m afraid not.

What doesn’t happen when you offer competitive pay is that your recruitment problems do not magically disappear, your employees won’t be satisfied and your compensation programs have achieved little more than being average – and isn’t that a “C” grade in school?  Is that where you want to be?  As far as aspirations go, it’s only middle-of-the-road.

If your company does pay “the going rate”, that means that approx. 50% of the companies out there are paying more than you.  That’s what average gets you, with half doing more and half doing less.  Is that what your company aspires to achieve?

No one leaves your company for less money – so all you’ll hear from your employees is about how so-and-so is making more somewhere else.  And as employees only hear what supports their own notions –they won’t pay attention to the broader rewards package, just the points that confirm their opinion that your company isn’t paying enough.

The only way to avoid this scenario is being the premier paying company in your market / industry – and can you afford that cost?

Lest we forget, it’s important to differentiate between having a salary structure (grades, salary ranges and midpoints) that provides competitive rate “opportunity” and actually paying employees at those rates.  Some describe this as whether the company is “walking the talk”.  I recall a client proud of the fact that their salary ranges were continually adjusted to mirror market rates, but was later embarrassed to discover that actual pay practices fell well below their midpoints.

For their part, employees relate to what they are being paid, not the midpoint of a salary range or other such declared “opportunity”.  To them the company’s “competitiveness” is more illusion than fact; especially if they’re experienced and have been with you for awhile.  Thus the company needs to keep its focus on actual pay vs. opportunity pay.

Why don’t employers pay the “going rate”?  Typically it is not a strategy, but a series of practices that evolved over time.

• Some candidates will accept a lower rate than should normally be paid for their knowledge and experience, and managers tend to view this as a cost savings.  Though it is more like putting a skeleton into the closet and hoping it doesn’t jump out at you down the road.  One day these employees will change their minds.

• Once you’ve started down the slippery slope of paying some employees below market rates the practice is soon compounded by internal equity.  Managers don’t want to pay similarly qualified new people more than existing employees, so the new hires are offered below market pay.

• Pay-for-performance systems have a hard time keeping up with the increased marketability of employees.  A minimally qualified employee hired at the minimum rate will gain knowledge and experience (and thus marketability) faster than a company’s annual merit system can recognize.  This is compounded when you have to hire a qualified worker and discover that the market requires you to pay more than what you’re paying your more experienced employees.

So, what’s the answer?  Management won’t agree to become the premier payer in your area, so you should consider instilling flexibility into your pay practices.  Consider targeting key jobs (highly skilled, difficult to replace, etc.) and make sure those jobholders are well paid for the market.

Other positions less skilled and more easily replaceable could continue with your “competitive opportunity” strategy.  This approach is akin to ring-fencing key talent, protecting them against poaching while recognizing / rewarding those with the most potential impact on your business.

Bottom line?  Be careful when you claim how your company provides competitive wages.  You may not be correct, but if so – big deal.

Have you heard this one?  “The Company would rather pay more to an outsider than give one of us insiders a decent promotion.”

The complaint is that, when considering two individuals for the same job someone on the inside oftentimes will be offered a lower salary than if the company went outside to hire a stranger.  To compound the insult, it is not unusual for managers to ask insiders to train and orient the new ‘wunderkinde” in how the company operates.

Aggrieved employees feel that an insider already knows the company, the people, the products / services as well as the policies / procedures.  That knowledge and experience is an advantage, they say, shortening any learning curve and cultural orientation.  Taking on the role and responsibilities of the new position and not being paid the “going rate” seems unfair – actually a penalty for being an insider.  It’s as if the company realizes they don’t have to pay as much for an existing employee, that the time spent in the company somehow reduces their market value and limits a willingness to pay a competitive wage.

Prevailing practice is that when a company looks to the outside recruiters will be instructed to search for someone who already meets the qualifications of the job; an experienced candidate who has already performed the job, whose only learning curve would be a brief acclimation to new policies and procedures.  Outsiders are considered to be free of “baggage”: no biases, preconceived notions or social network, and are thus considered more reliable as agents for change within the company.

Note: if someone already has performed the subject role the chances are good they are already being paid about the competitive rate.  If that is the case then the company would be forced to pay a premium to attract such qualified talent.  They would likely have to pay above the going rate (or above the midpoint in some companies).

So, what’s an insider to do?  How can you best position yourself for the inevitable comparison with an outside candidate?

Compare yourself against the description or requirements of the new position and try to be as honest as you can with your internal assessment.  Can you do this job from Day 1, or how much of a learning curve would you need?  Are there aspects of the new responsibilities that you haven’t experienced before?  The results of this assessment will give you an opening for your talk with HR.  They in turn will push the “we’re giving you an opportunity” angle, and you both know they could always go outside for a better qualified candidate.  In fact, an advantage you have is that you are likely a cheaper choice for the Company.  So don’t push the pay issue too hard, or you risk throwing the baby out with the bathwater.

Here’s a checklist for you to remember when you’re doing your self-assessment:

1) Are you already familiar with company policies, procedures and personnel?

2) In your present role have you already demonstrated an ability with the technical side of the new position?

3) An advantage: internal promotions look and sound good to other employees, and managers know this

4) Can you develop an inside track with the manager (the all-important “fit)

5) You are likely a cheaper option than hiring from the outside.  Use that fact to your advantage.

Don’t be afraid of compromise.  Your plan should be to gain visibility for your performance and value, though it may take some time for a positive result to work its way through the bureaucracy.  No matter what you gain from your initial conversation (short of complete victory) suggest a follow-up salary review in three months.  Managers know they’d have a better chance of getting an adjustment approved after the initial hire / promotion, when it’s more likely an exception would be approved.  A manager who agrees to that review (and who will be thankful to avoid a contentious meeting) is already halfway to approving an adjustment down the road.

By being aware of the restrictions your managers are operating under you may be able to help them help you.  Do not beat yourself against the wall of bureaucracy, but plan for your next step; use your insiders knowledge to your eventual advantage.

In our last post we introduced you to Step # 5 of the Seven Step Compensation Diet – the need to set up a pay increase budget and stick with it.  Managers make fewer questionable reward decisions when funds are limited, when they are held accountable and when Finance is double-checking and reporting on transactions.

Hand in glove with this financial tool is the need to obtain Senior Management support for your program re-design strategies.  To gain their support you need to pro-actively make your case.

Step #6: Develop a Metrics Awareness Program

You can grab the attention of your senior leaders by telling them the story of their largest single expense item – your company’s reward program.  They will want to know whether that huge expense (40% to 60% of revenue) is being properly managed.  If there are challenges ahead, or a crisis at their doorstep, you will have their attention.  You will need to tell them what has happened, and why.   They will ask about implications (liabilities, competitive picture, morale, turnover, etc.) and what would it take to resolve the issues being faced.

You had better be ready.

To tell a compelling story that describes real or potential problems with your compensation program(s), you will need to present facts and figures.  You will need to be specific.  Suppositions, theories from management magazines or best guesses based on your years of experience will not make the sale.

You will also face the passive resistance of those accustomed to the laid back philosophy of “if it ain’t broke . . .”   Unless there’s a problem staring them directly in the face, management won’t recognize that the barn is on fire, or that it soon will be.  You will need to instill a sense of urgency by presenting evidence.

Specifics are listened to

To understand the plot points of your story you should establish a series of quantifiable indicators (metrics) that record the factors and activities that impact your compensation programs.  Some examples:

• Average salary / wage

• Compa-ratios

• Count of employees per segment (hourly, non-exempt, professional, management)

• Average performance ratings

• Average pay rise for each performance rating

• Count and average promotional and “equity” increases

• Voluntary turnover (employees who decided to leave)

• Average employee age and length of service

I could go on and on and on (we only have so much space), but you get the point.  Measure what is important to you.  The further refine these and other measures by breaking them down per salary grade, employee segment, male / female, etc.

Once you have the metrics established (collectively called the “dashboard”) and a current status baseline in place, determine where immediate problems might be festering.  I use a simple red light, yellow light, green light code to mark problems, cautions and thumbs up for each criterion.  Follow this by setting specific targets going forward to improve your weak areas, and create periodic milestones to mark your progress.

What to look for

Every organization has different pressure points.  However, if your metrics data indictaes any of the following situations, it’s likely a specific problem that your management would want to know about.

• Average performance ratings that exceed how the business was rated

• A workforce where key segments are approaching retirement age

• Promotion and “equity” increase activity that overwhelms the merit budget

• Low compa-ratios indicate you are not paying your salary ranges

• Any figure that is an unpleasant surprise

Having a series of quantifiable measures will give you a sense of direction, as well as a method to gauge your progress.  Lacking that, your activities would likely spin you around in a circle, achieving little but data collection.  You need to use the data.

Start the ball rolling.  Create quantifiable metrics that will collectively illustrate the well-being of your compensation program(s) – and then establish baselines and targets for each performance indicator.  This key step will help you understand whether your costs are being contained (your diet is working) and whether the ROI on employee rewards is at the level your company requires.

Have you ever watched and wondered how it is that some employees in your organization are recognized and moved upward, while others with more impressive credentials, experience and achievements seem to stagnate – and then eventually move out?

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

Not exactly what you hear in Management 101 training class is it?

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

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

It’s all about PIE

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

Performance: your demonstrated ability to perform the job you were hired for.  How well do you handle your role?  Do you achieve results?  The rating scale is the traditional range of from wonderful to woeful.

Image: do you “fit” within the organization?  Is the image you project (personality, interests, clothing, demeanor, etc.) accepted by the rest of Management?  This rating scale ranges from “one of us” to “one of them”.

Exposure: to what extent are you known or would be recognized in the hallways by senior management?  Who are you rubbing shoulders with?  Here the rating scale ranges from “You are known” to “Who?”

The Way it Was

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

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

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

Btw, the classroom answer?  Treat each “dude” the same as you would anyone else.

The Way It Is

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

Of course, if you don’t perform well and you’re not in with the right group, your career with that firm will suffer.  You will shrivel on the vine, if not ultimately chopped off.  However, if you are considered to be in with the right group, that association will step in to help should your performance leave something to be desired.  This assistance can vary from softening the blow to overlooking shortcomings (accusations never stick) to shooting the messenger on your behalf.  Club mates stick together.  They circle the wagons when attacked.  They get even.

What to do?

Sound fair?  That’s the way it is when Performance is valued less than Image and Exposure.  But does that strategy have legs?  I don’t think so.  Leadership and a cadre of high performing people are critical requirements to drive your business forward.  You need such outwardly focused success drivers, not those more concerned about internal group dynamics.

Should you find yourself working for an organization where your personal interests and hobbies are valued more than performance and results, your options will be limited.

• You can try to re-invent yourself according to someone else’s value system, but how much success will you have?

• You can try to stay under the radar screen, lest you be judged – but that doesn’t seem a good career plan, does it?

• You can try to change the culture.  Good luck with that!

• Or you can leave

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

Leave the mediocrity behind.  Change can be a good thing.

In our last post we introduced you to Step # 2 of the Seven Step Compensation Diet – the need to lay out in your mind the general theme of how you plan to reward your employees.  Without such a governing plan or broad strategy individual manager actions will continue to push your reward costs upward at a rate greater than anticipated or desired.

At the same time, if you don’t know where you’re going (i.e., the Yellow Brick Road), any path will take you there, and odds are you’ll end up right back where you started.  So you had better set up some signposts along the way.

Step # 3: Prepare Compensation Guidelines

By “guidelines” we mean a series of written policies, procedures and how-to instructions that guide your management in dealing with compensation / reward issues.  These compensation policies, programs and procedures should reflect and support the strategies you developed in Step #2 – The Strategy.   Commit them to writing and distribute widely to managers and employees.  Have everyone get the word and don’t let ignorance become an excuse.

This primer should be the policy and procedural instructions your managers will rely on when called on to make spending decisions.  Educating your managers on the tactical application of your company’s pay programs is a critical step; one that will help modify actions and decisions in a way that will support and encourage the enduring change your organization needs.

As you would anticipate, left to their own devises Managers tend to fill an information vacuum (no guidelines) with precedent-setting decisions that will increase costs, foster inequitable treatment and over time alienate segments of the population.  Guidelines (or rules, if you’re strict) serve to rein in these ineffectual leaders by establishing parameters to their freedom of action and limits to their authority.

While aberrant behavior by rogue managers will cost you in terms of money, morale, and productivity,  giving managers policies and procedures to operate by will save you money, as well as time and trouble.

A suggested Table of Contents might look like this:

• Compensation philosophy (Role of compensation function, pay for performance, compensation strategy [as available])
• Brief description for each of your direct and indirect pay programs
• Step-by-step instructions to process every type of pay change
• Approval process for every type of pay change
• Hiring, promotion and pay adjustment procedures
• Administrative issues (pay dates, overtime, new positions, job evaluation, etc.)

You should create a greater visibility for the inevitable exceptions-to-the-rule by establishing a one-up approval process.  Such a technique will highlight remarkable performance through transparency of reward.  If you include templates and sample forms you can help ensure consistency of message while assisting managers to administer the reward programs.

When you shine a little light into those darkened, special interest corners the employees will notice – and applaud.

Having a rulebook-of-sorts will also help provide standards and structure to your reward programs, which in turn will foster greater employee engagement.  As you begin to improve how reward programs are designed, implemented and now communicated you will inevitably:

• Reduce your overall labor costs
• Increase effectiveness of money spent
• Increase ROI of reward dollars
• Improve morale, engagement and productivity

Final note: Make sure that all managers receive a copy of the compensation guidelines, and then periodically update and use them.  Refer to them constantly and let employees see that they are to be followed.

Let no dust gather on these pages.

Over the years the Human Resources Department has transitioned through any number of “latest thinking” management concepts and corresponding “buzz phrases” – from “matrix management” to “broadbanding” to “onboarding” and “headwinds”.  Each new approach seemed the brainchild of management consultants seeking to encourage what they called creative thinking and the latest strategies to improve the human factor.

Lately though a persistent theme has settled in that HR should become a “Business Partner” of the organization, in order to be taken seriously by senior management and enhance the value-added contribution of its programs.  This encouragement suggests that HR is not currently a player on the Senior Executive team – but needs to be.

So what exactly is an HR business partner?  Several key criteria have been tagged as descriptors:

• Diagnose business needs
• Develop management’s capability to address HR issues
• Provide advice and a point of view
• The primary focus is driving the business forward
• To educate, motivate and influence others

Does the above describe the HR function at your company?  Is HR considered a business partner?

Your Father’s Personnel Department

Today most would chuckle at memories of the “old” Personnel department, whose primary responsibilities seem to have been tasks like recruiting, record keeping, arranging the blood drives, the safety shoe program and running the annual picnic / Christmas party.  The head of Personnel was rarely considered a “player” at management meetings.  Some in management claimed that the department was only a necessary evil.

That Personnel was viewed as the department focused on the interests of the employees.  Its management was staffed by employee relations generalists, was sensitized by the needs of employees and left the running of the business to the “businessmen”.  Personnel dealt with people.

Today, companies expect more.   Leadership expects less transactional administration and more strategic thinking.  Being labeled a “people person” is now considered a negative, a source of humor among recruiters.

What are the signs that HR is a true business partner at your company?

• Direct report to the President / CEO and listed as a member of the Senior Team
• Able to speak with credibility and respect at the management table
• Able to advance the value of HR to those holding negative biases
• Consulted by senior management on human factor issues
• Company decisions affecting employees are initiated by the head of HR

As a newly designated business partner-wannabe, Human Resources in many companies has transitioned away from the traditional role of caring for / representing the employees.  It has focused instead on utilizing the human capital to assist management in achieving objectives and driving business success.  However, the more successful HR has become as a business partner the greater the danger that employees will lose trust and confidence in HR, exactly because the focus has moved away from employees.

As HR has developed a new stratagem, some might say a new identity, what has been the cost to the original mission?  What part of itself has been lost while chasing the role of business partner?

Danger Signs

Have a care that you don’t lose the heart and soul of HR – its caring connection about employees.  Don’t start looking at them as merely numbers on a spreadsheet or boxes on an organization chart.  There are other departments who already do that very well.

Is the HR function served or harmed by leadership that is “counting the chairs” on their way up the hierarchy?  These are typically fast-trackers who are not HR-trained, but only temporary visitors to the department for a “broadening” of their management experience.  Why is that acceptable for the HR function, but wouldn’t be tolerated in IT, Finance, Marketing, Engineering or Manufacturing?  Is the head of any of these other functions anything less than a seasoned expert in that profession?

Why is HR viewed as different?  Why are other functions already presumed to be business partners?  Only HR is being challenged, remaining a newbie, on probation at best, at worst one step away from getting the coffee.

Lip service to the people department?  Even while sitting at the Senior Management table negative biases from the old days often remain:

• Remember the safety shoe program?  It’s hard to be taken seriously after so many years focusing on administration.  Does HR deal with important issues today?
• If the head of HR has only been appointed to gain experience toward their ultimate loftier goal, how serious can we take a temporary worker who is only passing through?
• HR is still perceived of as offering restrictive advice, what can’t be done; they remain the gatekeeper of corporate policies.  Being an advocate of policy doesn’t win friends.

From the employee’s perspective it is important to consider HR as the source and advocate of fair and equitable treatment, compliance with all regulations affecting employees, and their representative among senior management.

What if senior management doesn’t feel that way?  What if they want HR to become just another “business partner” concerned more about the bottom line – to the exclusion of the human factor?

Have a care that we get what we want – Business Partner – and then our employees choke on it as we lose our way.