Like every company back to the Cro-Magnon period, they are starting out by looking at compensation. You've got to start somewhere and insight into compensation provides the newbie with a staffing study, organizational chart, large portion of operating budget and so on. Revs up your recruiting plans, too.
But I've seen a number of companies -- especially tech companies who are busy acquiring small businesses -- to leave it at that. Or, at least pretty much leave it at a cool handshake and a new payroll source for their founding employees.
Some tech companies are shopping for intellectual capital not people, so the cash commodity mentality could hold merit. But many others are just plain overwhelmed by the details of setting up a whole new business operations from scratch. After all, their experience has been to grow it bit by bit, relatively quietly; not shout, "Ready, set, go."
If everything we do in compensation is communication, what does the first paycheck say to these employees who you are relying on to get up to speed and deliver fast? It's worth a good deal of thought because this opportunity will never come again.
Many, many executives are prone to over promise in this situation. It feels like a high to have all that potential in front of you, so why not be unrelentingly positive? Truth is, that's a rookie mistake. It doesn't take a high IQ to understand that nothing ever turns out exactly as planned. It's better to get focused on specific milestones than to believe that the company will be listed on the NYSE any time soon.
So back to that paycheck. In a start up, a paycheck/incentive talks to the employee about the future as much as the present. How fast will we grow? Can the exec deliver? Do I have a career here? Will I get recognized for pitching in? Are the managers any good? Is this better than my last job?
Being prepared to answer those questions from Day 1 is really tough to pull off, but with emotions running that high, it's an investment with an amazing payoff. A common human reaction to excitement is engagement and hope. A common human reaction to disappointment is resentment. People will make do until they realize that someone's unwittingly (or deliberately) making it tougher for them than it has to be.
No matter how good that paycheck is, you'll all end up feeling ripped off by the second quarter if the leadership group doesn't walk in as prepared as possible to build relationships that work out well. Put that on your To Do list, and count on making a measurable contribution to new business results.
Summer reading or influence building? Get yourself a copy of Everything You Do (in Compensation) Is Communication @ www.everythingiscommunication.com, the convenient website where you can grab our popular eBook. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal at Towers Watson.