When you consider the role of Compensation Management it's natural to first think of the competitive analysis and program recommendation process - where jobs are market-priced, salary structures are tweaked and a merit spend budget proposed for the coming year. It’s the annual “here’s what I think we should do moment.”
These projects usually consume much of the final quarter, and when you add in the merit review process and short term incentive assessment and payouts, compensation practitioners can be very busy for several months running. To many in senior management, that's what they do. That, in essence, is their job.
What about the rest of the year, though? What's the role of Compensation Management then, during the day-to-day?
The off season
Dotted throughout the year, during slow periods as well as "all hands on deck", compensation practitioners find themselves constantly challenged by scenarios where the red phone from Leadership has rung. Questions will be asked, background data researched, and various issues that impact business operations will be explored. The calls can be unpredictable in nature, timing and import - but have a common theme. Compensation will be asked to provide information, answer questions and deliver research and analysis reports. Some of the likely topics that could be raised are:
- Employee turnover is getting to be a problem.
- Our counter-offer policy (or lack) is causing issues with employee retention.
- We have too many red circle (over the max) or green circle (below minimum) employees.
- Managers are asking to increase eligibility for short term incentives.
- Payroll costs are getting out of hand.
- How effective are our pay programs?
- How to secure candidate "X" for the company.
Whatever your response to the question(s) at hand, you should always be prepared for when Leadership follows up with a question - "what do you think"? That would be like a softball question tossed to a politician, so you’d better be able to hit it out of the park. You'd better have an answer.
Compensation professionals should always have an opinion as to how rewards can and do (or could and should) affect the business. You should anticipate the issue(s) that Leadership is concerned about and be ready to provide your own well-considered comments. You should not simply point at a series of figures and say, "there you are."
That would not be a career enhancing moment. That is not managing anything.
The question you want to hear
If your role is to manage compensation, not to follow or administer it, then you need to anticipate the client needs and interests. It's like an attorney who advises, "never question a witness where you don't already know the answer." So think about what you're offering up in terms of how business operations might be affected.
To think and act like a leader of the organization you should consider what your facts, figures and recommendations mean for the organization. Even if you've not been directly asked. On what pathway will your information place the organization, and what might like ahead – given the various options that should be considered.
Some questions that you should anticipate, and thus provide in your response:
- What will this cost, in both hard and soft dollars?
- What if we do nothing?
- What are the risks of the pathway ahead?
- How will these suggestions benefit the organization?
- What do you think we should do? And why?
When Leadership calls, that’s your chance to have an impact, to utilize persuasiveness and influencing skills to move the organization in the direction you feel is correct.
Don't waste the opportunity.
Chuck Csizmar CCP
is founder and Principal of CMC Compensation Group, providing global
compensation consulting services to a wide variety of industries and
non-profit organizations. He is also associated with several HR
Consulting firms as a contributing consultant. Chuck is a broad based
subject matter expert with a specialty in international and expatriate
compensation. He lives in Central Florida (near The Mouse) and enjoys
growing fruit and managing (?) a brood of cats.
Creative Commons image courtesy of Ano Lobb