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02/26/2014

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Oh you mean we don't all use the 'best practice' and just apply them all regardless of situation?

Haha..

Very Good!!!

The 'Olden Daze Never Went' huh? For years organizations tried to 'pay their way out of challenges' and it continues I guess. How many times have issues been addressed under the banner of, "Let's do a pay study". And everyone completes a job description, and jobs are 'evaluated', and salary ranges are 'adjusted', and folks are crammed into one salary range or job or another. And to the astonishment of everyone the challenge the organization is facing remains after averyone is 're-slotted' and 're-evaluated'.

Rather than manage poor performers out of the organization in a fair and humane fashion many organizations 'do a pay study' and these folks are either 'set out to pasture' or some other fate in order that they remain with the organization rather then have the chance to re-start their 'engine' someplace else.

I think this may be one reason our profession has been slow to earn a 'place at the strategy table'. Maybe having t-shirts made that say, "Look out, the salary study will get you" is one way to fund an employee lunch program or something. Good post Dan. You are my 'hero' of the day.

Treating every problem as merely a cost item to be solved by writing a check is stupid but easier than resolving the real issue. Buying time requires much less effort than fixing broken systems. It's therefore popular among lazy managers.

Examples of inappropriate compensation interventions could fill many books. As the article published here back on 8/26/2010 "First, You Eliminate Pay as the Solution." But it requires comp expertise to make that diagnosis stick!

It's so easy for management to think that throwing pay at someone will fix any problem. Or they think it's the easiest way to fix something. They're thinking: "Anything, anything --help!--- anything rather than having to actually talk to an employee!"

its realy good article , thanks

Jules,
I agree. "Best Practice" needs to be removed from the quotes. Best Practice means just that. "Best Practice" means generic, vanilla, lazy and best for no one.

Jay,

Thank so much. That means a lot coming from you! I like your idea of a t-shirt. I think mine would say

"Compensation would be HAPPY to support your thoughtful idea for company success."

Jim,

Writing a check always seems easier at the start, but usually ends up being much harder in the long-run. I like the article you referenced. It requires both compensation expertise and an understanding that everything in compensation is communication.

Once you communicate that pay is more important that determining a real solution, you're sunk!

Marbella,
Thanks for your comment and support!

Jacque,

I think part of the problem is that pay seems like such a fast way to promote a correction. The hard part is getting all stakeholders to understand that Pay without alignment to a real solution is just a slow solution to circling the drain.

The 't-shirt' for Dan . . .

I don't mean to make jest of the issue (or do I?) But we are 'following the latest leader' off a cliff relative to copying 'best practices'. I spoke at a conference of College and University HR folks some years ago and the crux of the conference was an annual survey of 'best practice' and 'competitive practice'. And most of the sessions were about things like, "The danger of non-compliance with best practice" or 'What to do if your college does not follow competitive practice'. It was scarey the number of institutions that were quivering in their boots because some university leader had implemented some pay practice that was 'not reflective of best practice'.

I asked during my presentation if anybody had in any way measured the consequences of the 'best practices' they all followed and asked about what happened if someone was not 'paid competitively'. The answer essentially that they had 'no data'. They actually did not know why they did what they did other than that it was 'competitive'. The response nearly half of the organization reported they followed when they were experiencing high critical talent departure was 'we did a salary study and increased pay in general'.

I never got invited back to speak at that conference for some reason. I guess I fell into the black hole of 'inconsistent practice' or something. Oh well???

Jay,
I think we have to make jest of the issue at times, because people get so upset when we make it readily apparent that we are serious. Much of my practice is spent working with companies who truly want to, or have to, stay unique. I love it.

As for following the leader searching on the term "follow the leader" on this blog brings up many articles including the following that I wrote a couple years ago. http://www.compensationcafe.com/2012/02/follow-the-leader-is-dangerous-but-so-is-being-the-leader.html

A 'possibly true' story?

Someone just told me that when looking for an internal total rewards professional Netflix specified that they do not want someone with a CCP from WorldatWork. The logic, I was told, is that they want original thinking and not someone who has been 'brainwashed' by 'me too' compensation and benefit planning. I wonder if this is true? If it is I must say that whatever direction our profession is taking to prepare people to add value to our organizations has gone in a problematic direction. Can anyone tell me if this is actually true?

Our studies of what CEOs want from total reward practitioners suggest this may actually be true. When we asked CEOs why the 'rap' on them for wanting always to save money many said something like this: "If all we get from our HR professionals is sponsorship of copying what other organizations do and not seeking advantage, why would we not want to copy others at the lowest possible price?"

I guess we have 'beat' on this topic enough. But if someone can tell me if the Netflix story is true or nonsense I would appreciate it.

Hi Jay,

Just reached out a friend of mine in the Netflix comp department. She has been there for a very long time. It turns out the story is an urban legend. Neither she, nor anyone she asked, has heard of the company specifically (or implicitly) looking for CCPs.

They do however focus on people that can understand, support and promote their unique corporate culture and approach to pay.

Dan

"If all we get from our HR professionals is sponsorship of copying what other organizations do and not seeking advantage, why would we not want to copy others at the lowest possible price?"

In 1989 I proposed risk rating medical insurance premiums for my then employer. The VPHR threw me out of his office and forced me out of the company.

Nobody ever got fired for buying IBM.

Tony,

Thanks for your comment. I sadly expect that many others have had similar experiences. As many senior people as there out there who know that change is needed, there are still far too many for whom change is the equivalent of poison. The are also far too many who have neither the will or ability to create real solutions, so they put the onus on compensation professionals to fix things with pay.

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