Compensation Cafe

The Merits of Merit Pay for Teachers

The merits of merit pay for teachers should be discussed by experts on merit pay and pay for performance.  Politicians, parents and other interested parties all have a lot to say about the topic, but no one seems to care about the opinions of those with substantial experience in the subject.  Rather than simply listen passively to pundits whose sound bites resonate strongly but are weak in substance, why don’t we kick the subject around a bit here?

Here are some conditions generally considered necessary for the success of merit pay or performance-pay programs.

1. Performance objectives are defined, with clear output expectation standards communicated in advance.

2. Standards of performance are consistent among comparable jobs while still recognizing unique position circumstances and requirements.

3. The enterprise creates and communicates objective, valid and reliable performance measures so each employee can control their personal output measurement results.

4. Supervisors are trained in effective performance review and appraisal methods, so they can note individual output results in areas where differences are worthy of attention.

5. Supervisors accurately differentiate on the basis of validated performance and frankly but diplomatically communicate their evaluations to the subordinates.

6. Mutual trust exists between supervisors and subordinates.

7. Pay ranges are wide enough to permit significant pay differences among peers.

8. The organization has both sufficient money and adequate determination to award substantially larger pay increases to better performers.

9. Pay structures are externally competitive and internally equitable.

OK, now consider how difficult it is to accomplish any, much less all, of those prerequisite conditions in private industry where management has total control.  It is highly doubtful that most educational systems can do better than the private sector.  A quick review of those criteria will show that few schools can meet most of those demands.

Without the necessary environment to support merit pay, it cannot succeed.

Please realize that this is certainly not a comprehensive complete list of all requirements, but it happens to be a summary of the points I raised in an article with this exact same topic title over twenty-five (yes, 25) years ago.  The more things change, the more they stay the same.  Back then, I closed saying, “At present, the teaching environment lacks the right climate for merit pay.  Yet recognition of the steps necessary to properly reward merit in education will help bring the day closer when that ideal can be achieved.”

Being a perpetual optimist, I guess I’ll never learn.  Kick away!

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: "national museum of american art and portrait gallery-52" by krossbow

Hybrid, Shmybrid -- Let's MIX IT UP!

We're all becoming mad scientists! Whether the cause is job enrichment, career development or downsizing, many employees now find themselves with job titles that sound as weird as pickles and peanut butter. Titles that were unheard of in 2007 -- like, "Clerk/Receptionist" and "Director of Benefits & Training".

If "making do" has become our mantra and blended jobs have become a vehicle for employee development, recognition and engagement, you're likely to be running into more and more blended jobs that defy benchmarking. What's a Comp guru to do?

I've been chatting about this challenge with my colleagues and friends, Margaret Dyekman of Corporate Compensation Services and Judy Canavan of HR + Survey Solutions, who have offered to share their experiences and solutions with us. In 2010, they've addressed more hybrid jobs than ever before, for companies from 400 employees to corporations.

Join us in September for a series called, "Hybrid, Shmybrid -- Let's MIX IT UP!" Margaret and Judy will take us into their confidence and answer questions like:

• Why not just average the market rates for the jobs?
• Shouldn't Molly be paid more since she's doing so much?
• I don't know what we would do if we lost Harry. Don't you think we should add a premium to his salary?

In the meantime, if you have a Molly, Harry or other challenges of your own, why not include them in the comments? I'll ask Margaret and Judy to take them on the next time we meet at the Compensation Cafe.

Margaret O'Hanlon is founder and principal of re:Think Consulting.  She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results.  Margaret brings deep expertise in total rewards communication to the dialogue at the Café; before founding re:Think Consulting, she was a Principal in Total Rewards Communications with Towers Perrin.  Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University.  Creative writing is one of her outside passions, along with Masters Swimming.

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.

The Top 3 Provisions of Dodd-Frank..at Least for the Moment

I once had a colleague who was an acronym addict. His philosophy was anything more than a TLA (three letter acronym) was inefficient and confusing. If the name of a product or service required more than a TLA, he would insist it be changed to something shorter (not my strong suit). I have been doing a lot  of presentations on the Dodd Frank Wall Street Reform and Consumer Protection Act and the title alone nearly fills my twitter message box. For the sake of simplicity and my tweet stream, I am going to use the efficient DFA (Dodd Frank Act).

By now, you have probably seen the list of items that compensation professionals must add to their to-do list. For those of you who have blissfully buried in high-priority, pressure cooker-type projects here’s a quick run down.

•    Votes on ‘Say on Pay’ (MSOP)
•    Votes on ‘Golden Parachutes’
•    Compensation committee independence for public companies
•    Compensation consultant independence
•    Pay versus performance disclosure
•    Ratio of CEO compensation to average employee 
•    Mandatory claw back provisions
•    Formal employee anti-hedging policy
•    Limited broker voting
•    Enhanced shareholder proxy access
•    Company disclosure of Chairman / CEO role
•    And..MORE!

So, what does this all mean to the professional who already works significantly longer than a 45-hour workweek, even during the so-called “slow” months? First, it means you have to get started on a project plan that outlines how you will approach each of these items without materially impacting everything else you do. For larger companies, this may be limited to assigning specific topics to members of your compensation team.  For smaller companies, this most likely leads to categorizing items along with your normal activities. Second, it means there will be no shortage of work to go around.  And, lastly, it means that as a professional you must be nimble and know how to adapt quickly.  Get ready for a fun ride. The beauty of all of this is that it allows you to direct compensation evolution in a way you have envisioned for years, but did not have the support or budget to accomplish.

If I were a company, the following would be my top three priorities.

Priority 1.
When looking at the DFA, ‘Say on Pay’ is the most obvious driver of compensation restructure. Most academic studies also support ‘Say on Pay’, touting it as the single biggest catalyst in the move to performance-based pay. This provision is pivotal as it dovetails with another DFA requirement to disclose the link between pay and corporate performance.

Your company’s first step should be to look into creating a ‘Say on Pay’ stakeholder team. This team’s objectives will be to review how investors have viewed your past pay practices and begin to define communication, plan structure and performance metrics to help reduce the chance of having a “no vote” at your 2011 proxy.  This team can also discuss whether the company’s approach will be to aggressively attack shareholder hot points and perhaps get corresponding positive press or to adopt a wait and see approach by acting only after peers have announced changes or shareholders have started pushing for details.

A recent study by F. Ferri finds that CEO pay in companies with excessive compensation practices dropped an average of 38% after the implementation of a ‘Say on Pay’ provision.  For these companies CEO compensation dropped an average of $7.3 Million during the studies time span of 1997-2007. It becomes immediately important to understand whether your company falls into the “excessive compensation” category and how that will impact your preparation for shareholder compensation votes.

There are also some less obvious immediate drivers of increased responsibility for compensation pros.

Priority 2.
The compensation consultant independence provision is written broadly enough to allow firms to provide more than compensation consulting. While combined services are allowed, many compensation committees may adopt a more conservative approach to reduce the any appearance of conflict and the need for additional explanations.  There is also a looming question of who will be defined as a consultant or adviser for compensation issues. Will your company’s legal counsel or tax adviser be included in this disclosure? Will an outsourcing or software provider fall into this category?  It is too soon to know how the SEC will finalize this provision, but it is a good idea to evaluate to who you get information from and how that relationship might be impacted.

Priority 3.
The CEO to Employee compensation ratio requires that the compensation for all employees be determined using the “Summary Compensation Table” methodology.  There are very few companies that currently have this capability. Furthermore, it could very well require significant administrative costs and effort to accomplish this. There is the added complication of clearly reporting on average employee pay when you may have a workforce structure that deviates from that of your peers.  If your company currently has significant amount of work performed by employees in low cost locations, your ratio may be artificially high due to the low wages you pay. Conversely, if you have fully outsourced much of your administrative or manufacturing work to non-employees, the ratio may be relatively low due to having fewer employees at lower wage rates. Preparing for this issue will require a combination of new strategic and tactical skills, as well as some new tools.

These three provisions are just a quick start for all of us. Many of the details of the DFA have yet to be determined and communicated. These three priority items simply give us something new to work on while we wait for final answers on several other issues.

If you disagree with my big three please list yours in a comment and explain why they made your list. At this point in the game, all points of view are valid.  If we can get the discussion started now, we may be able to accomplish the intent of this legislation and simultaneously transform compensation at the same time.

Dan Walter is based in San Francisco, CA and is the President and CEO of Performensation, a firm focused on improving its clients performance and equity compensation programs. He has worked with small start-ups through the Fortune 100 for more than 15 years. In addition to being a frequent speaker in the US and abroad, Dan is on the board of the National Center for Employee Ownership, helps run ShareComp, a virtual conference for the share plan industry and heads Equity Compensation Experts one of the largest free networking groups for equity compensation professionals. Dan loves to share ideas and information. Follow him on LinkedIn or Twitter at @performensation.

What Are You Afraid Of?

One of the most negative management stereotypes is the image of the corporate "yes-man," that weak-kneed subordinate who is always quick to agree with the boss.  This is the empty suit having no other opinion than what's expected.  Can you picture the nodding head and vacant smile?

That's not your picture, is it?

Do you recall the old saying that goes, "see no evil, hear no evil, speak no evil"?  The modern version of this adage describes one who willfully turns a blind eye, refuses to acknowledge and even feigns ignorance when confronted with activities that they should otherwise say or do something about.

That's not you, is it?

Do the compensation professionals you know, including the one looking back at you from the mirror, provide objective advice and unbiased counsel to management, or do they simply offer support and justification for what management wants to do?

Do you stand up?

There are always opportunities for compensation professionals to turn a blind eye / closed mouth to improper practices taking place in their organization

• Finance has lobbied Senior Management that the average merit increase next year should be X%, and now you have been asked for your recommendation

• The performance appraisal process (forms completion and assessment reviews) is poorly handled and rewards are often granted without legitimate justification

• A Vice President wants to create an Office Manager title for a long serving Secretary.  This would also entail a higher grade and promotional increase.

Are you one to stand up and be counted, or do you let these events wash over you without contentious intervention?

• Do you provide Senior Management with an unbiased recommendation, based on your competitive research and an understanding of compensation strategy?

• Do you question those managers who wish to grant increases / bonuses for the wrong reasons?

• Do you strive to hold the line on meaningless titles that increase costs, create employee equity issues and provide the company with little or no ROI?

What's the worst that can happen?

Are you concerned that having an opinion out of step with Senior Management will damage your "team player" image?  That your career would suffer because you can't get along with others, that you "don't get it"?  Or do you just find it easier to get along with everyone and ride the tide wherever it takes you?

Professionals should give the best advice they are capable of providing, on the basis of their technical knowledge, experience and seasoning with business operations.  Let management make the decision.  They have a perspective that is wider than a singular compensation view, and it's their company, budget, operations, etc.  Your responsibility is to provide the best objective advice possible, to ensure that decision-makers have their eyes open and understand the ramifications involved.

Life isn't a tableau of black-and-white images, but a series of swirling grays.  We should acknowledge that, that there are contingencies and alternative possibilities available.  But we should not temper our judgment and our opinions on the basis of what the boss wants to hear.

Management will generally respect straightforward analysis and honest feedback.  However they won't respect your input if it's been tainted by political maneuverings or a "how many ways are there to say yes?" mentality.

Repeat after me - I will add value

You don't have to fall on your sword career-wise to make a point, to stand up for yourself, to add value to the decision-making process.  Sometimes you just know the direction management is taking, no matter the facts surrounding the issue.  While leadership may be plagued with personal biases that often trump rational analysis, that doesn't mean that you should step away from doing your job.

One of the best ways to establish yourself as a valuable contributor is to have an opinion, and not be afraid to voice it.  Even when the management steamroller is moving and you have to get out of the way or be run over, you should always provide your professional input.  You can do this by providing options and alternatives, multiple courses of action for management to consider.  That's where you are able to present your own recommendations alongside the favored management point-of-view.

Get them thinking; that's your responsibility and how you add professional value.  It's also how you build credibility and an invaluable personal awareness with Senior Management.

Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  With over 30 years Rewards experience Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a brood of cats. 

Image: Creative Commons photo (chiara2_photo) by arka D 

Immunizing Formula-Based Comp Systems

It's that time of year when we start thinking about going back to school. We stock up on loose-leaf paper, pencils and pens. Backpacks fly off the shelves. Shopping bags are filled with brand new sneakers. And, depending on their ages, we get our children immunized.

Taking your kids to get their shots is a great time to think about immunizing your formula based compensation system. It's like checking your smoke detector batteries when you change the clocks - "immunize kids, immunize comp system".

It turns out that immunizing your formula based compensation system is easier than vaccinating your kids - it hurts less and there are fewer tears! And thanks to a decision earlier this year by a federal judge in the Southern District of New York, it's easier than ever!

Here's a little background... The case was about a bonus payment program that was tied to the level of sales production. Normally, formula-based compensation systems are protected under Section 703(h) of Title VII:

[I]t shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority or merit system, or a system which measures earnings by quantity or quality of production or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin...

In this case, plaintiffs argued that the bonus program was not protected under Title VII because sales production was infected with discrimination. They also argued that defendants knew about this infection but adopted the bonus program anyway, and because of this an "intent to discriminate" can be inferred.

The court held that a pay system that compensated people on the basis of actual production is protected from disparate impact claims under Title VII, irrespective of whether the pay system has a disparate impact on minorities or women and irrespective of whether the employer knows that it will have a disparate impact.

The ruling stated that a merit, seniority, or production-based compensation system is 'bona-fide' if it applies equally to all employees in the same way. And even if the compensation system perpetuates the effects of other acts of discrimination that clearly violate Title VII, as long as the compensation system itself was adopted without discriminatory intent, it is immunized under section 703(h) of Title VII. In this case, the court found that the program was adopted without discriminatory intent; the court held that knowledge of past and even present discrimination alone doesn't make it plausible that defendants actually adopted the program with discriminatory intent.

So, how do you immunize your formula-based compensation system? Make sure that it's 'bona fide'. A bona fide system is one that:

• was adopted without discriminatory intent;
• is an established system based on predetermined criteria for measuring seniority, merit, or productivity;
• has been communicated to employees;
• has been consistently applied to all employees, regardless of gender, race, national origin, etc.

And it's important to document all of this. Make sure that the business reasons for adopting the program are delineated, and that the criteria used in the system are thoroughly documented. Communicate the program to the employees in writing, and make it clear to them exactly how their compensation will be determined. Most importantly, once you have the formula-based system in place, follow it! Apply it consistently, without fail.

Making sure your formula-based compensation system is bona-fide will go a long way in immunizing it from claims of discrimination. And you won't even need a band-aid afterwards!

 

Stephanie R. Thomas is an economic and statistical consultant specializing in EEO issues and employment litigation risk management. For more than a decade, she's been working with businesses and government agencies providing expert EEO analysis. Stephanie has published several articles on examining compensation systems with respect to equity. She is the host of The Proactive Employer, and is the Director of the Equal Employment Advisory and Litigation Support Division of MCG.

Too Much Recognition? Is There Such a Thing?

I advocate for frequent, specific and timely recognition -- letting people know "in the moment" how  much I appreciate their efforts, how their accomplishments contributed to a greater goal. I like to "catch people doing something good." And I don't advocate setting limits on this kind of specific, authentic and actionable recognition.

Given this, can there ever be too much recognition? Yes, there can. Let me explain.
 
In my college days, I had a summer job selling encyclopedias, schlepping door-to-door. My fellow door-knockers and I would be dropped off in our target neighborhood at the beginning of the day, and then rally together again at the end. In that end-of-day meeting, we would receive a certificate of recognition for something – ANYTHING. Every single one of us. The person who knocked on the most doors. The person who returned with the cheeriest smile. The person who walked the farthest. And, of course, the person who sold the most. By the end that summer, I had a stack of now-meaningless certificates at least an inch high. And they meant nothing to me. In fact, that end-of-day meeting quickly became something I and my friends dreaded.
 
Why? Because, in the words of The Incredibles, the Pixar movie about superheroes and those who want to be, “If everyone’s super, no one is.”
 
In a comments conversation I engaged in as a response to a post on HRZone.co.uk, Pamela Pattison made this very important observation:
 

“There seems to me a big difference in thanking someone and appreciating them. I, for instance, am annoyed by a formulaic 'thank you' as I leave the office. (I wonder if eventually I will ask 'what for?'). Whereas I have also had a senior manager just today thank me for the advice I gave which led to a very difficult, potentially explosive and costly situation being defused. The former annoys me as seeming a nod in the direction of appreciation and the latter really pleased me. … I suppose I could sum it up as: be sincere, don't say thank you without good reason; acknowledge work that is extra to the norm.”

That gets right back to my specific, authentic and actionable recognition. People don’t want just an offhand “thanks” or a meaningless and trivial certificate. We want to know why what we did had greater meaning and purpose. Yes, thank us for our efforts, show us your appreciation, but be sure to tell us the specifics – how we helped achieve something bigger.
 
But, and this is a very important point to always keep in mind, while recognition should be “limited” in that you should always be conscious of appreciating and recognizing employees in a specific, authentic and actionable way, setting artificial limits on the amount of recognition that can be given or on who can receive recognition can quickly kill a culture of appreciation in a workplace. As I said in a recent post on my own blog:
 

“And that’s why the OPPORTUNITY to be recognized -- and to recognize others -- should be equally open to everyone. That doesn't mean every employee will receive that "great job" recognition, of course. The top performers will receive the most, naturally. But all employees deserve the opportunity to be recognized for work they do that is worthy of recognition.”

If you want to create a recognition program that excites employees, engenders loyalty, and reinforces your critical company values and objectives, then recognize – frequently, specifically, authentically and in a timely way – employees at any level who deserve it.
 

As Globoforce’s CMO & Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin, Montreal and Boston. Follow Derek on Twitter at @globoforce.

You Are What You Pay For

Rewards matter. And they can reveal truths that sit in opposition to touted intentions, values and priorities.

Say what you want.  In the end, you are what you pay for.

Your reward philosophy may state that you pay for performance.  But is that slackard whose attitude and poor work habits are dragging down the morale of the whole department getting the same (or just a slightly reduced) salary increase as his hard working cohorts?  Again?  Save your breath, then, because your true reward philosophy has been confirmed by your actions.

Your leaders may talk up teamwork and the importance of collaboration, but are those who produce results by hoarding resources and refusing to support colleagues recognized and rewarded handsomely for their contributions?  Employees then see and understand that individual results are golden, no matter how - or at whose expense - they are achieved. 

That inspirational statement of values on your website and framed up in your reception area? Are you delivering  incentive awards and stock grants to people whose actions and behaviors fly in the face of these words?  Your true values are the things you reinforce, not what you choose to inscribe on a plaque.  Ask your employees; they know.

Your annual report claims that people are your most important assets.  Did your decisions and calls, your treatment of your "human assets" during tough economic times, confirm that claim?  Was the compensation pain that had to be endured apportioned fairly - and shared at all levels of the organization? 

Compensation programs are not just financial instruments.  They are not just HR programs.  They are also communication vehicles, and the fact that they have money behind them only serves to amplify the messages they send.  Your pay practices define your organization in ways that your internal and external PR efforts cannot touch. 

Think about that.

What do your pay practices say about you?

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time.  Follow her on Twitter at @annbares.

Image: Creative Commons Photo "You" by gcfairch

August in the Compensation Dept. -- Time for Fun!

If you manage a compensation program that is on a calendar year schedule, August is the calm before the storm. Q4 is a whirlwind of performance management, merit increase and incentive process work. And then in January, you start all over again.

We keep talking how much things are changing, but when it comes to administration, the steps still pretty much look the same, I bet. You know what's coming in the next four months. Why not take a minute to breathe, look around and decide where you really want to go with rewards and recognition that will take them far beyond business as usual.

The eternal question is: How can compensation along with the other parts of Total Rewards help your employees be more engaged, creative and productive than your competitors'? Will you deliver this time? Instead of scheduling more meetings, now is the time to have some fun and "sharpen the saw" as Covey used to say, before you are swept up in administrative details and don't have time to think.

Here's how you do it.

Chill. Everyone in your organization has been battered by the recession and we've learned in the past week or so what the economists and the Federal Government believe is in store for us in the next few years. Job growth is going to be as unreliable as AT&T cell phone coverage for the next two years or so.

If you are worrying that employees are ready to jump ship, you're probably looking at the wrong side of the coin. "Focus on how you treat the people you choose . . . employees themselves provide the clues . . ." to the innovations you can make. Are you listening to what they are telling you?

Read . . . for insight, ideas and inspiration to get going on real innovation. The quote above is from a really interesting summary of a speech given by Malcolm Gladwell for Towers Watson.  He talks about misguided recruiting and selection assumptions that are rampant in our culture. It's always fun to look at things from an angle that has never occurred to you before. (One of the reasons why so many people like "The Girl with the Dragon Tattoo"!) There's so much sound, predictive research out there, it's almost a professional lapse if your reward and recognition approach doesn't reflect it.

Need GPS for this road trip? Start with the research on the Web sites of the major consulting firms.

Go out for lunch. There are lots of companies in your neighborhood, no doubt. Do you know their Compensation or HR Directors? Odds are there are a few that you haven't met. Call one of them up and invite him or her for lunch. They'll be intrigued. You'll be able to talk shop with someone who isn't in your department. You'll learn something new. And it counts as networking!

Listen. A low-cost strategy for performance improvement. Towers Watson's research informs us of the power of manager-delivered recognition to boost employee engagement. How have your managers been doing? Are they still on your side? What kind of help will they need to do a good job on performance evaluation and compensation conversations this year?

Everyone is teetering under work/life challenges. If your time is so limited that you can't kick off your shoes in August, even for a bit, here's the place to focus.  Your managers will tell you -- have been telling you -- what it takes to deliver real innovation and what it will take to make it a success.

Margaret O'Hanlon is founder and principal of re:Think Consulting.  She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results.  Margaret brings deep expertise in total rewards communication to the dialogue at the Café; before founding re:Think Consulting, she was a Principal in Total Rewards Communications with Towers Perrin.  Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University.  Creative writing is one of her outside passions, along with Masters Swimming.

Dearth of Honest Mercenaries

Political correctness will be the death of us.  Just read a news story about University of Mississippi research professors uncomfortable about accepting consulting projects from BP that would involve telling the scientific truth about the Gulf oil spill. Apparently, it is more important to be seen as hostile to the offender than to reveal accurate scientific facts that might mitigate their negative public image.  Whatever.  Guess that’s just the way of the world today.

It might similarly explain the deafening silence heard from the Total Rewards community about the perverse incentives debacle that triggered the financial crisis.  The authors of those morally hazardous schemes (see Ann’s prior Fred Cook moral hazard post) seem to have disappeared.  Perhaps the creators of the incentive programs which enriched the perpetrators of major increases to the national debt have suddenly been overcome with shyness.  No one wants to stand identified as allied with the TARP-receiving organizations assigned the black hats by the media, either.  Hate to say anything kind about attorneys, but at least their code of ethics requires providing good faith aggressive defenses to even those charged with the most heinous offenses. 

 

Back in prehistory when I consulted, I was occasionally “locked up” in reasonable compensation cases by a contract perfected by a prepaid retainer, so the other side was denied my potential services as an expert witness.  Frequently, the enterprise whose attorney retained me was engaged in excessive pay practices unsustainable as “reasonable”; so it was my professional obligation to both honestly define to my client any degree of excess and to present the best arguments supporting the amount of compensation that was properly justifiable while leaving it up to the opposition to make their contrary case.  As a court-qualified expert witness (remember Marissa Tomei’s Academy-award-winning testimony in My Cousin Vinny?  Same thing…), you are sworn to tell the complete truth, to fully enlighten the court about facts and to honestly share your professional opinion, which will carry special weight with the court.  If I could not defend a position, I told my employer (the law firm) beforehand and clearly explained the limits of my intended testimony; so they would put me on the stand at their own risks.  No one client was worth impeaching my professional reputation, so I called myself “an honest mercenary.”

 

Where are the experts willing to objectively study a sticky situation today?  Makes no difference whether it involves the Gulf oil spill, an intelligence failure or moral hazard in reward programs.  It’s one thing to refuse to lie.  It’s quite another to refuse to tell the truth. 

 

There is only a short step between those who hide the truth and those who distort the truth.  Which are we guilty of today?

 

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.