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

Comments

[E. James (Jim) Brennan]

Well said, Ann. Wonderful reminder that compensation is communication! People may listen to what you say, but they only pay attention to what you do.

[Ann Bares]

Exactly right, Jim!

[mark allen roberts]

Good post!

There is a native American saying...”the wolf you feed is the one that grows”.

Make sure the compensation program is tied to your overall vision, values and roadmap. A good book that discusses being intentional about your overall culture is Delivering Happiness as I discuss in my blog : http://nosmokeandmirrors.wordpress.com/2010/07/09/delivering-happiness-proof-%e2%80%a6the-%e2%80%9cgolden-rule%e2%80%9d-is-profitable/

They identified 10 key core values at Zappos and built them into every fiber of their organization. They feed those who follow their values.

Mark Allen Roberts

[Laura Francisco]

Very true - you have to walk the walk with comp philosophies and programs. AND - employees need to meet you halfway (at least!) - not just sitting with mouths open like baby birds in the nest. We encounter environments were entitlement is the prevalent "reward philosophy" with many of our clients so I feel strongly that both employers and employees need to live the rewards strategies. Pay for Performance. Not just pay, not just performance.

[Wolf Halton]

This is absolutely true. We are trying to work out how to pay on performance and also on innovation. The performance part is simpler for people who are permanently coded to clients. Engineers whose charge is to support the entire infrastructure may be harder to tie to performance, since as they say, "The only time you notice me is when something breaks." If an engineer is coded to a set of clients then that engineer must work with the consultant who signed the client in the first place. Now we have a minimum of 2 people working at the behest of and toward maximizing the return for a single client. We are also a 50% employee-owned company so all of the employees feel some ownership of the results.

[Wally Bock]

This is a powerful and insightful post, Ann. My experience is that it's less the program design where things break down and more the implementation at the supervisory level.

[Ann Bares]

Mark:

A great quote, very on target here! Thanks for the link and the info on the book.

Laura:

Good point and quite true - both sides have to walk the walk!

Wolf:

Sounds like you have some interesting initiatives underway!

Wally:

Wow - thanks! I agree that much of the breakdown is outside plan design ... it's at the supervisory/implementation level AND at the leadership/conceptual level (where people may be tempted to use the pretty words that they're not really willing to live up to).

Appreciate the thoughts and comments everyone!