Compensation Café

Organizations that are unable to innovate and evolve will likely not survive, let alone prosper. Few inside and outside our profession would argue the point. What role can rewards play? The topic and question bring to mind an intriguing book on creative invention:  The Medici Effect by Frans Johansson.

I've always made it a point to ask about organizational values in compensation philosophy sessions and in every discovery conversation at the front end of a problem solving engagement. The responses can vary from "Values? Don't remember but I think you can find them on our web site" to a passionate discourse on the guiding principles of how people behave and make choices in the organization.

Organizations that are unable to innovate and evolve will likely not survive - let alone prosper. Few inside and outside our profession would argue the point. What role can rewards play? I had the opportunity to hear a great presentation on strategic thinking a few years ago and came away with interesting ideas and an intriguing book on creative invention:  The Medici Effect by Frans Johansson.

Swiss psychiatrist Carl Gustav Jung once famously said "You are what you do, not what you say you'll do." With this in mind, I always smile when someone says: "We've never had a compensation philosophy."  The fact is, they've always had one, since the very first time the organization paid an employee. They just haven't committed it to writing yet. Or, perhaps more likely, owned up to the truth of it. But it's there.

There appears to be general agreement among reward professionals that the compensation approaches and protocols which have dominated practice for the last few decades are more than ripe for reinvention. That disruptive change in the field is necessary and inevitable. I also sense an assumption that we will be the change that we have been waiting for.

Do your employees believe what you say about your pay program? How do you know? I've had the chance to work with many organizations that have decent, even quite good, compensation programs and practices in place, but where employees are simply not buying it. They resist "corporate" messages about the pay plans and they invent and spread all manner of rumors about them.

Are your incentive plans designed to support or defeat your organization's business strategy? It's a fair question. And a passage about tradeoffs from Clayton Christensen's book How Will You Measure Your Life? illustrates just how fair -- and realistic -- a question it can be.

Editor's Note:  It's true that office parties of any type and theme can reveal a lot about the organization and its culture. Jacque Vilet shares a few enlightening examples in this December Classic! I’ve attended my share of company Christmas parties --- my employers’ and as a guest at other parties. There were some that I really enjoyed, some that made me uncomfortable and a few that were downright miserable. It was not until a few years ago that I realized something.

We seem to love to get granular with incentive plans. So many compensation professionals are tasked with not missing anything, they include darn near everything in their incentive plans. Increase revenue? CHECK! Manage safety? CHECK! Grow new clients? CHECK! Maintain old clients? CHECK! Focus on the newest product? CHECK! Sell through the old inventory? CHECK? Improve your Net Promoter Score? CHECK! Keep aligned with long-term objectives? CHECK? Meet this month’s sales goal?

Editor's Note:  Interested in a successful compensation career? Chuck Csizmar shares some Classic tips! Whenever I come across self-help materials intended to assist Compensation practitioners with their professional growth I often notice an overly large emphasis on the technical side. And when reading internet blogs meant for the same audience there again seems a constant litany of how-to guidance on, again, technical issues. That's all well and good, but . . . .