Compensation Top Chef

Have you ever noticed how compensation plans can be like Indian food?  The list of ingredients sounds exotic, but is not very long. Each ingredient is used for a specific reason and care must be taken not to use too much or too little. Hundreds of recipes can be created by combining, adding or removing a limited number of ingredients. The final product is determined by how carefully the selected ingredients are cut, cooked and what dish is being served to compliment the unique combination of flavors. Most importantly, each dish is designed to uniquely appeal to a specific sense of taste.

Sometimes, we approach our compensation plans more like food from Taco Bell.  Take a listen to this parody of a new product. In the name of simplicity or cost we cut out the ingredients that add spice, color or uniqueness. We often take a few of the most popular and common ingredients and simply re-arrange them and serve in new wrapper. We give this concoction a new name and focus on the next project.  Somehow we believe that common efforts will be rewarded with uncommon attraction, retention and motivation.  In fact, people see through the packaging and lack of imagination and know that they are getting the same old thing. 

It's time for a new recipe. The volatile stock market, changing economic conditions and abundance of available staff members gives us an opportunity to learn or create something new. You should take this time to attend some classes, or raid a friends recipe cards. Learn how to add new flavors while you combine your favorite ingredients in new ways.  Perhaps you can add a dash of performance to your equity plan.  Or, maybe change your performance appraisal process and scoring system. Maybe, just maybe, you can roll-out that communication project that's been sitting on the back burner simmering for two or three years. Imagine the possibilities.

Start by trying this in your own kitchen.  Go out tonight and buy a few new spices.  Head over to epicurious.com and get an idea how new ingredients are used by others. Pick an interesting recipe and surprise yourself with something new and delicious.

Take this newly  found creativity and talk with your compensation colleagues and review industry websites for new ideas for plans and features.  Talk to compensation consultants and ask what kind of interesting projects they are working on for other companies. Try making some small batches of these new compensation recipes and test them out against your historic data. Get some “official taste-testers” and have them discuss the results. You may find that the creative juices start flowing and you open a whole new world of compensation.

There is nothing wrong with the familiar and easy, but it is not hard to create something truly unique and special. Try a few new ingredients in your compensation plan this season and appeal to the culture of your company.

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. Performensation's current focus is the "not Fortune 1000", 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.

Comments

[Derek Irvine, Globoforce]

Dan, brilliant post. Too often total rewards plans resemble hospital food -- bland and unexciting, but perfectly safe.

You're right. Adding a little spice isn't about "mixing it up a little," but about catering to the tastes of each employee. It's not difficult but the rewards are great.

[Dan Walter]

Thanks for the comment Derek. This is an exciting time for all of us in the compensation, rewards and benefits world.

Too bad we can't have some type of "compensation Plan" reality show. Get some pros in there and give them challenges and have judges vote on the best solutions.

[Ashwini Deo]

Great Post, Dan! Never looked at it this way, some food for thought.