How do you decide?
Inspired by an Harvard Business Review article on dealing with problem products (who knew there were such similarities between product development and pay plan design?) and adapting its wisdom to our field, I offer the following guidelines:
Scenario 1: A Plan in Search of a Purpose.
Why was this particular pay plan created? What purpose does it serve? Does anyone know? Not infrequently, we HR and compensation pros can get enamored with a particular idea or approach. Perhaps we picked it up at a conference or read about it online. In an effort to be at the forefront of our field and do what the cool kids are doing, we bring it to our employers. Or someone in the leadership suites comes down with a directive to implement a particular plan because it was a hero at his/her previous employer.
But are we clear and in agreement about the problem it is designed to solve? The types of behavior and outcomes it is meant to inspire? How will we measure success?
Fix or Kill: If you can't identify a compelling business need that the plan is designed to address, something critical enough to warrant the investment of precious discretionary pay dollars, kill it and start over. Begin this time with strategy and problem definition.
Scenario 2: Poor User Experience.
"Usability" -- according to author Moe Kelly -- is a top killer of new products and services. This is true for compensation programs as well. Often they are aimed at the right business priorities and problems, but designed with no sense of the user (managers, employees) experience. Does the plan make sense to managers and employees? Do they understand why it was put in place and how it works? Does it send messages that are in alignment with stated intent?
Fix or Kill: Fix. Get out of your office and away from your spreadsheets and PowerPoint presentations and spent some time discovering what managers and employees experience when they have an "encounter" with your plan. Can you make that user experience better, so that it allows the plan to speak to and deliver on its intent and purpose?
Scenario 3: Poor Strategic Fit.
The plan is a perfect fit -- to a business reality that existed 5 years ago (or once upon a time in the designer's imagination). If you can't articulate how the plan drives and supports strategic priorities, there's a pretty good chance that it actually doesn't.
Fix or Kill: Usually kill. Chances are this plan has lost all credibility, so your credibility may hang on disposing of it quickly and following up with the design of something that has clear strategic relevance. (And then, vow not to allow this one to slip into auto-pilot mode.)
Scenario 4: It's an Idea, Not a Plan
This is a classic product development problem -- a grand vision of an emerging market opportunity in an exciting new space that the company gets all giggled up about but can never completely execute on. In the compensation space, we are familiar with this as a version of analysis paralysis. You define an emerging critical business need and imagine a reward scheme that has the potential to produce exciting and tangible talent results. Meeting after meeting is held, ideas are flying, but no traction is being gained.
Fix or Kill: Here's what product development wisdom has to say: Either get clear, focused statements of purpose and objectives and a plan (with milestones, responsibilities and deadline) on the table or kill it. If a real program does not then emerge according to the plan, kill it. This takes real discipline, especially if you have (or your culture has) a tendency to fall in love with and get stuck on ideas that never come to fruition. Moe Kelley describes this process as "Whack-A-Mole" since the same half-formed ideas keep popping up even after you "smack them down."
Agree or disagree with any of the above? What would you add to these guidelines?
Looking for the definitive guide to compensation leadership? Ann Bares collaborated with Margaret O'Hanlon and Dan Walter on the ebook Everything You Do (in Compensation) is Communication. Find it at www.everythingiscommunication.com. Ann is the Founder and Editor of the Compensation Café, Author of Compensation Force, and Managing Partner of Altura Consulting Group LLC. Ann also serves as past President of the Twin Cities Compensation Network (the most awesome local reward network on the planet) and is a member of the Advisory Board of the Compensation & Benefits Review. She earned her M.B.A. at Northwestern University’s Kellogg School, is a foodie and bookhound in her spare time. Follow her on Twitter at @annbares.
Creative Commons image "Whack-a-Mole" by Sam Howzit