Compensation Cafe

We Must, We Must, We Must Increase Our Trust

What’s wrong with this picture:

• Salaries have been frozen for nearly two years although companies are sitting on piles of cash. 

• There’s a critical skills shortage but half your best people plan to leave. 

• Innovation is a key differentiator but employees are burned out.

• Leaders want to build morale and encourage teamwork but engagement’s at an all-time low.

A recent Fast Company article ‘Quarterly Earnings Kill People-Based Innovation’ put it best: "How do companies across the globe expect to innovate on the backs of an increasingly demoralized workforce that's stressed, overworked, undercompensated, unrecognized, lacks career opportunities, and doesn't trust leadership?"

It’s time to make some changes and the most important thing is to rebuild trust in your organizations.  Lack of trust makes itself felt in a number of counterproductive ways that you may recognize:

1. Focus on making oneself look good rather than helping others.
2. Reluctance to share or mentor others for fear of becoming expendable.
3. Increased meetings and decreased decision making.
4. Withholding praise or development opportunities to secure one’s own position. 
5. Looking for a new job in order to acquire new skills.
6. Making stress-related mistakes.

How can we we rebuild trust?  Communication is a start, and there’s a great article about the importance of communication over at TLNT. Unfortunately, communication isn't enough.  Keep in mind that employees have lived through downsizing, salary freezes, increased hours and poor communication.

Re-establishing trust will require more than words.  It will also require action:

1. Define a clear strategy that maximizes what your company does best.  Ask employees for their feedback so they feel like valued members of the team.  Get people talking, brainstorming and contributing.  If people believe the company has a future that they are part of they’ll be more likely to stick around and apply their creative energy.
2. Loosen up some cash in two directions: 1) rewards; and 2) job creation.   The first is to show appreciation for everyone’s sacrifices over the last months, the second is to get people out of the trenches and part of a dynamic, growing collective again.  Before you start hiring people, look internally to offer people new opportunities.
3. Empower people to develop their skills, choose meaningful rewards, and seek out new opportunities within the same company.  Help them build confidence.  Recognize and reward mentors, who can help foster teamwork and ensure that key skills are transferred.  Encourage open exchange of ideas and  constructive criticism.
4. Follow up promptly on employee feedback, inquiries and concerns. A timeless recipe for establishing trust is to say what you mean and do what you say.

Actions speak louder than words.  Don't just tell people they can trust you, show them. 

Picture courtesy of ZDNet.

Laura Schroeder is a Compensation Strategist at Workday, headquartered in Pleasanton, CA.  She has nearly fifteen years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and is currently pursuing a certificate in Strategic Human Resources Practices at Cornell University.  Her articles and interviews on HCM topics have been published in the US, Europe and Asia.  She lives in Munich, Germany and enjoys cooking, reading, writing, kick boxing and spending time with friends and family. If you want to read more from Laura, check out her talent management blog Working Girl or follow her on Twitter @WorkGal.

Friday Special: Is Your Employee Recognition Program Stuck in the 80s?

Editor's Note:  We are pleased to announce a "re-purposing" of our Friday Special at the Cafe feature.  Starting today, we will be using this space to feature guest posts from writers outside our regular team of contributors (interested? shoot me an email at abares@alturaconsultinggroup.com).  To kick off this new feature, we are pleased and proud to bring you "Is Your Employee Recognition Program Stuck in the 80's? Strategies to maximize your recognition practices and bring them into the 21st century." from guest contributor Theresa Chambers.  Take it away, Theresa!

While leg warmers and feathered hair may have made a comeback, let’s make sure your recognition programs aren’t stuck in the 80s. Whether you are creating a program from the ground up or revamping an existing one, here are some tips to bring your recognition practices into the 21st century.
 
Employee of the Month programs are so 80s. We’ve heard all the jokes, “Whose turn is it this month?” or “Let’s give it to Joe, he hasn’t gotten it in a while.” The impetus for recognizing great work doesn’t happen because you turned the calendar from August to September. It needs to be deserving, for sure, but it also needs to be based on criteria that reinforces employee behaviors aligned with company values.
 
No surprises. Surprise awards are more about the shock value for those watching than truly honoring the person you’re trying to recognize. If you knew you were receiving an award, wouldn’t you like to know ahead of time? Some people love the fanfare and applause, while others prefer their recognition in private. When it comes to recognition, one size does not fit all, so it’s always best to ask employees how they like to be recognized.
 
Don’t show them the money.Harvard Business School’s Rosabeth Moss Kanter captured it well, “Compensation is a right. Recognition is a gift.” While 85% of employees surveyed say they want cash awards, only 9% actually spend it on a special personal treat for themselves. Cash disappears. Awards should serve as a tangible reminder of the achievement. It can be as simple as a framed certificate with signed accolades from coworkers or a retrofitted Oscar trophy with a superhero cape renamed FRED (friendly, resourceful, enthusiastic and dedicated). 
 
Think strategy, not program.  Recognition is not a once a year celebration where only a small percentage of employees are honored and everyone else watches. A strategy is ongoing and multidimensional. The most important element is the day-to-day thank-you and acknowledgment. It’s about creating a culture of appreciation where it’s up to everyone to “notice out loud” when someone does something right for the company.

Involve employees in designing the recognition strategy. People own what they create and want to see it succeed. Committees should represent a diagonal cross section of your organization and its unique culture. Identify Recognition Ambassadors throughout the company who serve as the go-to person for ideas and resources.
 
The most powerful form of recognition is story telling.People pay attention to who gets recognized and why. An effective presentation should tell the story about what the employee did, the positive impact it had, and how it was an example of one or more of the company values. Use multiple communication vehicles to share employee achievements, including the intranet, recognition bulletin boards and the company’s Facebook page to post pictures and give coworkers an opportunity to add their congratulations. This works great for remote employees.
 
Maximize your managers. People may join a company for the pay or benefits, but it’s an employee’s relationship with their manager that determines whether or not they stay and how engaged they are. Research suggests that employees need to receive recognition and praise for great work every seven days to stay actively engaged. Thankfully, giving effective recognition is a leadership skill that can be learned. In fact, training managers on recognition skills increases the occurrence of recognition by up to 50%.

As your business goals evolve, so should your employee recognition strategy. Your core values may remain the same, but it’s always a good idea to take a fresh look at your recognition practices.

Here’s to keeping the ZING in recogniZING!

Theresa Chambers is the Chief Motivation Officer of Recognition Works and founder of the Puget Sound Recognition Roundtable.

Friday Special at the Cafe

Every Friday, we make it our business to find a terrific reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  While the post selected this week is not directly tied to reward design and management, I think it offers a bit of perspective and humor going into a holiday weekend - and so we offer it to you in that spirit.

Diane Pfadenhauer, who blogs as the Strategic HR Lawyer, posted on the results of a recent survey of hiring managers conducted by CareerBuilder.com, which noted a list of complaints that employees have raised about their co-workers.  The charges which workers have levied at their cohorts include:

•Employee has big hair

•Employee has bells on her shoes and it's not the holidays

•Employee's body is magnetic and keeps de-activating my magnetic access card

•Employee is so polite, it's infuriating

•Employee breathes too loudly

•Employee eats all the good cookies

Click over to Diane's post for the rest of the list.  As she notes, in this economy, it is difficult to believe people are complaining about stuff like this ... but there you have it.

Let's give this list the chuckle it deserves, and let's hope some of these folks get some perspective on their circumstances.  And if you aren't already reading Diane's blog, take this opportunity to check it out.

Best wishes for your Labor Day weekend!

Friday Special at the Cafe

Every Friday, we make it our business to find a terrific reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week I'm pleased to call your attention to a terrific post on the topic of performance from Cafe friend Kris Dunn at the HR Capitalist titled Role Player versus Star: Embedded Observations from the Field.

What's great about this post: not only does Kris put his finger precisely on the pulse of what is behind our collective inability to make performance management work better, but he uses it to engage employees at his organization in a great discussion of what differentiates role players from stars.

A few nuggets Kris gleaned from the conversation with his team members:

--The term "Role Player" isn't a negative to most people.  When asked to define a role player, most team members spoke in positive terms.

--Stars were thought by this group to be driven by passion and to be naturally curious, which leads to them gaining knowledge about other areas that complement their current role in the organization.  That additional knowledge and expertise can either make them a star, or cement their status as one.

--There's some natural suspicion among general team members on the motivation of stars.  Are they just naturally driven, or are they attention hounds who want all the glory.  I thought this line of thinking was pretty interesting and got me to thinking - even if Stars are driven by ego, should it matter?  Doesn't the organization still benefit?  In any event, I can see the ego-driven point that was made. 

--Team members generally think that someone can't become a star without putting in more hours than other people.

-THE CRAZY STAT:  Over half the group in attendance thought that 60% or more of the team members at our company thought they (self-identification) were stars.  But, when asked to provide a % of team members who were ACTUALLY Stars (the raters looking at the team member base), over half the group in attendance thought 25% or less of the team members in our company could legitimately be identified as stars.

As Kris puts it, that was the point where his head exploded. 

While I can relate to that - I still think it was an awesome move as an HR VP.  Until we get to the bottom of the Role Player versus Star distinction and make some real headway, we're going to remain stuck on the tarmack in terms of making performance management work in our organizations.  Click through to read the rest of the post and also check out the slide presentation Kris used for the session.

Have a great weekend!

Friday Special at the Cafe

Every Friday, we make it our business to find a terrific reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week we point you to a great post about recognition practices on the Globoforce blog, authored by Derek Irvine.

Derek discusses the nature of employee productivity gains realized during this economic downturn and decries the poorly conceived recognition attempts of some organizations in "Productivity Increases and I get ... a Lapel Pin?!"

It’s easy to see what those numbers mean. Employers are getting a lot more work per hour out of many fewer employees and are paying those remaining employees less for it.

What thanks are employees getting for this hard work – beyond keeping their job I mean? One article that hit my screen this week suggests lapel pins – yes, lapel pins! – are the way to go. Let’s pause for a moment and consider how many working professionals actually wear clothing with lapels on a regular basis. Bankers and lawyers, yes. Some doctors, but not all. Executives and senior leaders, perhaps, in some more “corporate” environments. But generally speaking, the vast majority of rank and file employees do not wear lapels to the office on anything like a regular basis. And I don’t know about you, but I’m not sticking a company-logo pin into the lapel of my best suit at the next wedding or funeral I attend.

Derek asks some great questions about any company's reliance on "company logo tchotchkes" as a key piece of their recognition strategy.  Click through to read more. 

The Globoforce blog is a great source for staying abreast of employee recognition trends and research - add it to your reading list today!

Have a great weekend! 

Friday Special at the Cafe

Every Friday, we make it our business to find a terrific reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week we highlight a great performance management post on Dan McCarthy's Great Leadership blog where he give us his Leader's Pocket Guide to Improving Performance.

Dan's post (you'll have to make your own laminated cards, sorry) is filled with great links, stories, exercises and resources ... like the one below:

Review and clarify expectations
Here’s an abbreviated version of one of my favorite stories on the power of clarifying expectations (unfortunately, I don’t remember who I heard it from, so I can’t give credit):
A consultant was hired by a CEO to “fix” one of his managers who was about to be fired. The consultant asked the CEO to write down all of his expectations for this manager. When he met with the manager, the consultant gave him the list. A few months later, after the manager’s performance had dramatically improved, the CEO was congratulating the consultant for his brilliant work. “How did you do it?” he asked. “I gave him your list”, said the consultant. The CEO slammed his fist on the table and said, “I knew it – you cheated!” 

Try using the same exercise with your employees. It’s even better if you both create your own lists, then get together to compare.

If you're looking for great information and insights on leadership, Dan's blog is one of the best out there - so go get subscribed today!

Have a great weekend!

Friday Special at the Café

Every Friday, we make it our business to find a terrific compensation/reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week we point you to Paul Hebert's Incentive Intelligence blog, and his recent post Too Much Recognition?

Paul questions if too much recognition might make it seem ordinary; if it needs to be less common to be considered special.  He also looks at the difference between validation for work and recognition for work. 

From Paul's post:

There are a lot (and I mean a lot) of articles lately that talk about creating a culture of recognition and advice from experts focused on reminding management teams to work hard at recognizing the contribution of employees and others (vendors, suppliers, channel partners) for their efforts.  I'm guilty of it as well - posting about how important it is to highlight the efforts of individuals and teams.

But I'm concerned that we're losing something - we're losing the scarcity of the award - and when we lose the scarcity we lose the value.

Here's a thought experiment - ask yourself - what would you think of a Pulitzer Prize Winner if you knew they gave out 250,000 of them every month?  Would you think it was a great honor or an average honor?

When we recognize people for performance we should make sure that performance is recognizable.

Click through to read more about Paul’s thoughts on recognition.

Incentive Intelligence is a thought provoking blog that questions the status quo.  If you aren't already subscribed to Paul's blog, I recommend you do so today.

Have a great weekend!

Editor's Note: My thanks to Cafe Contributor Darcy Dees, who has taken on responsibility for this week's Friday Special. Nice work, Darcy!

Friday Special at the Cafe

Every Friday, we make it our business to find a terrific compensation/reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week we point you to Mike Haberman's HR Observations blog, and his recent post Getting Punished for Trying to Do Good.

Mike does us all a service by reminding us about a particular set of fine print in the FLSA (Fair Labor Standards Act); one requiring that any non-discretionary bonuses awarded to nonexempt employees must be allocated over the time period to which they apply and then included in overtime calculation.  He does this by sharing the story of what happened when one well-meaning employer inadvertently ran afoul of this requirement.

From Mike's post:

QuikTrip, a Tulsa, Oklahoma based convenience store chain, has agreed to pay out $750,000 in overtime payments that the U.S. DOL said were due employees because of a violation of the Fair Labor Standards Act. By just looking at the headline you might think this is the "standard" case of a company working employees off the clock or not counting time they worked. Well if you thought that you would be very wrong. This case has to do with a company trying to do good things for their employees and rewarding them for their good work.

QuikTrip has a bonus system based upon a secret shopper program. Employees are rewarded for extra good work based upon their ratings in the program. What an excellent thing to do! However, QuikTrip got caught in a making a mistake that many companies probably don't even realize they could make too. In fact when I talk about this in the SHRM prep classes I teach most people are agast. The mistake that QuikTrip made was in giving nonexempt employees non-discretionary bonuses! Because if you give nonexempt employees non-discretionary bonuses you have to use that in your overtime calculation for the period of time that was covered by the bonus.

Click through to learn more about this FLSA requirement ... and then be sure to check out Mike's follow-up posting on the topic as well.

HR Observations is a great source of HR related news, trends and developments - explained by a seasoned and savvy HR professional.  If you aren't already subscribed to Mike's blog, I recommend you do so today.

Have a great weekend!

Friday Special at the Cafe

Every Friday, we make it our business to find an interesting compensation/reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week we point you to Steven Roesler's All Thing Workplace blog, and his recent post Kill Change With Too Many Priorities.

Steve may cover "all things workplace", but I find many of his ideas and insights have very direct implications for measuring and rewarding performance.  In the post we showcase today, Steve discusses a research study which examines why many U.S. businesses are so unsuccessful at effecting change.  The reason?

Managers have so many priorities at once that they can't tell what's important and what isn't.

Ring any bells?

As Steve relays it:

Although change projects are given top priority at most companies, almost half of the more than 500 managers surveyed said that a significant number of such projects failed to meet the stated goals.

The #1 reason given for failed change initiatives was having too many "top" priority projects and an inability to coordinate and integrate these across their organization

This is an important point for compensation practitioners, as our efforts and programs aimed at measuring and rewarding performance often fall fictim to the "everything is a priority" syndrome.  Reward programs are most powerful and effective when they are used as a mechanism to focus attention on imperatives.  But if everything is an imperative, nothing is an imperative, because there's only so much attention to go around. 

To drive his point home, Steve shares a personal anecdote:

Sitting in a conference room not long ago, I watched an executive trying to get guidance from his CEO: "I've got no less than than twelve initiatives going simultaneously. Which should I really focus on?"

The CEO answered, "Yes", and sat silently. He thought it was a clever response.

We'll see what the results yield.

For workplace wisdom, you really can't beat All Things Workplace.  Click through and read the rest of Steve's post ... and be sure to put his blog on your regular reading list.

Have a great weekend!

Friday Special at the Cafe

Every Friday, we make it our business to find an intriguing compensation/reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here.  This week we point you to an interesting post about recessionary pay cuts and professional athletes.  In You Know Its a Recession If You're Taken a Pay Cut, John Hollon, Workforce editor and author of The Business of Management Blog discusses the salary angst of LA Lakers star Lamar Odom:

Lots and lots of Americans are dealing with this, even those who have historically made a lot of money—such as performers and professional athletes. It’s hard to feel sorry for them because, in most cases, whatever salary they are getting still ends up with “millions” on the end.

Yes, it’s hard to feel sorry for well-paid people who are still pretty well-paid, and that’s why it’s hard out here in Southern California to feel a lot of sympathy for professional basketball star Lamar Odom of the NBA champion Los Angeles Lakers.

If you aren't familiar with John's blog or the others featured regularly by Workforce.com (look for them along the right sidebar), make it a point to check them all out today.

Have a great weekend!