First, You Eliminate Pay as the Solution

My esteemed colleague Mercedes McBride-Walker signs her emails with this slogan: 

 

"95% of the time, the issue is something other than money. So why am I not out of a job?" 

 

She makes a very good point.

Most of the people I hang with are still pretty much compensation people rather than Talent Managers or Total Rewards professionals, so when they are presented with a problem, guess what gets addressed first?  Their instinctive first “fix” is usually to throw money at it.  It’s almost like we were politicians. 

When your only tool is a hammer, every problem looks like a nail.   Those whose power and authority comes from compensation expertise tend to rely excessively on that element as the universal cure for all ills.  It becomes the same old story… first you give them money … then, when that doesn’t work, you try other solutions until you finally work your way down to the real causal agent, by trial and error and at great expense of  time, effort and money. 

We are not the only ones at fault.  It is all too easy for managers to assume that pay can solve any problem.  Even when they are wrong, the recipient of the inappropriate largesse will typically display some gratitude and may demonstrate temporary improvement.  Plus, even if higher pay doesn’t create a compression wave, the manager still gets a bigger budget.  Those who correctly identify a solution that does not involve compensation face an immense amount of resistance to any fix more difficult than simply writing a check.  After all, if an issue can be corrected with cash, it is not a management problem but only a cost item. 

Not until I held credibility as a compensation expert would anyone believe my claims that pay was usually not the issue in any given situation.  Realistically, if you don’t deal with compensation first, dispelling that as the solution, no one will listen to you; all will claim it’s simply a matter of money. 

We human resources people still have a terrible habit of prescribing solutions without ever performing a diagnosis.  The seductive temptation to throw money at every problem cannot be defeated without strong and confident compensation people willing to reject inappropriate solutions.

Ironically, we need more pay experts in order to correct non-pay problems. 

Do we have them?  And will we continue to grow them?

E. James (Jim) Brennan is Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. Semi-retired after over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that  (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.) and will express his opinion on almost anything.

Image: Creative Commons Photo "my to do list" by koka_sexton

Comments

[Jen Turi]

Thanks for the post. I'm a big fan of the "Don't just throw money at it" concept. It doesn't work but it is a convenient excuse not to explain the real problem. Good leaders get to the root of the problem rather than treating symptoms.

[E. James (Jim) Brennan]

Maybe life will get easier next time, when you can simply give them a link to this post, or hand them a copy. Anything "published" (particularly when peer-reviewed) tends to be more credible than even an accurate verbal assertion.