What can the tardigrade, a one-millimeter aquatic arthropod, teach us about compensation?
They are masters at surviving extremely harsh conditions. As we officially enter Q4 of 2012, compensation pros are going to have to survive some harsh conditions as well.
Tardigrades (a.k.a. "waterbears" or "moss piglets") can survive temperatures ranging from -328 to +300 degrees Fahrenheit, pressures more than 6,000 times Earth's atmosphere, and radiation doses thousands of times stronger than what humans can survive.
Companies are facing their own extreme temperatures and pressures, even as the economy slowly recovers. According to Jeff Blair, Hay Group's U.S. Productized Services Leader, annual salary budget increases of 3 percent may be the new normal. Blair says this is not a "sustainable strategy, especially for hot jobs or hard-to-fill positions."
In light of this "new normal," compensation pros are going to be making decisions in a pretty harsh environment. Being creative with your total rewards may be the answer to stanching the exodus of talent and keeping employees engaged. Here are three tips from tardigrades for your total rewards strategy:
1. Stretch out and relax. When the oxygen content of their water gets too low for respiration, tardigrades stretch into a long, relaxed state. The relaxation of their muscles allows as much water and oxygen to enter their cells as possible. If you're stuck with a three percent or less budget increase, don't panic! You can use non-cash rewards like flexible work schedules and telecommuting to help your employees stretch out and relax. Some companies are also offering longevity leave bonuses and sabbaticals for longer-tenured employees to help them refresh and refocus.
2. Sweeten it up. Tardigrades are able to survive environmental stresses by producing trehalose, a special protective sugar that preserves their cells. When cash rewards are tight, use your own protective sugar to preserve your employees: say thank you. As my Cafe colleague Derek Irvine points out, "simply knowing someone noticed - knowing that what you do every day matters - is key to motivation, engagement, and loyalty." Don't wait until annual review time to say thank you - do it in response to specific accomplishments and achievements. Be careful to show appreciation genuinely and authentically; real sugar tastes great, but artificial sweetener has a bad aftertaste.
3. Dehydrate and rebalance. Tardigrades also have the ability to "super-hibernate" - they can enter a dehydrated state, reducing metabolic activity to as low as 0.01 percent of normal levels. While in this dehydrated state, a tardigrade curls up into dry, lifeless ball called a tun. If you are facing an extremely harsh environment this Q4, you may have to dehydrate base salaries and re-balance your rewards mix. Dehydrating base salaries and relying on other elements of rewards - variable pay, for example - avoids permanently ratcheting up pay levels when increases in company performance may not keep pace. Tardigrades can survive for decades in this dehydrated state, and return to normal once immersed in water. If - and when - annual salary budget increases return to "old normal" levels, you can re-examine your rewards mix and rehydrate where appropriate.
Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. Since 1999, she's been working with businesses and government agencies providing expert quantitative analysis. Stephanie's articles on examining compensation systems for internal equity have appeared in professional journals and she has appeared on NPR to discuss the gender wage gap. Stephanie is the founder of Thomas Econometrics Inc., the host of The Proactive Employer radio show, and author of the upcoming book Compensating Your Employees Fairly: A Guide to Internal Pay Equity. Follow her on Twitter at proactivemployr.
Image courtesy of Eye Of Science/SPL/Solent