How much am I worth?
It's a question that stands at the center of the employment relationship, driving every pay conversation, negotiation, offer and response.
It's also a question that stands on increasingly uncertain ground, in light of continued economic turmoil and the shifting nature of the compensation game. Organizational leaders are struggling to balance fixed investments with the need to stay nimble. Salary increase projections are showing only modest recovery going into 2011. HR departments are pushing forward in their quest for ways - beyond salary increases - to recognize and reinforce employee contributions.
Many of us are already, or will soon be, charged with the need to shepherd our organizations and workers through the shift to a reward package where non-salary elements are increasingly prominent. This will mean more than simply designing new plan details and mechanics. It will require understanding and supporting the psychological shift that must go hand-in-hand with moving to a broader reward package.
As my Cafe colleague Jim Brennan recently reminded us, pay is a scorecard. We must not underestimate the power of pay as "a measure, a sign, a symbol and a reflection of self-image." The reality is that, going forward, many organizations may be putting the screws to the piece that has traditionally been the centerpiece of that scorecard - base salary - in favor of more variable reward elements. Rewards, for many employees, will become more varied, more situational and more complicated.
Success in this brave new world of rewards will demand that we help workers reframe the question - how much am I worth - to accomodate the fact that the return for their contributions has become more variable, more situational and more complicated. That their worth, more than ever before, is bigger than their base. That there are new and changing variables in what used to be a pretty simple equation. And that, unfortunately, what was once easy math may start to look and feel more like multiple regression.
The bar for compensation communication will be going up as employees strive to answer the "worth question" in the face of new reward strategies and initiatives. Will we be ready for it?
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.
Comments