Could We Ever Enter a Post-Compensation Era?

Skimming through my news readers last Friday, I stumbled on an article in Network World in which Mark Dean, CTO of an IBM division and one of the engineers who designed the first PC, said, “PCs are going the way of the vacuum tube, typewriter, vinyl records, CRT and incandescent light bulbs.”

As incendiary as that statement is, Dean ratchets down the rhetoric later in the article, explaining:

“PCs are being replaced at the center of computing not by another type of device — though there's plenty of excitement about smartphones and tablets — but by new ideas about the role that computing can play in progress. These days, it’s becoming clear that innovation flourishes best not on devices but in the social spaces between them, where people and ideas meet and interact. It is there that computing can have the most powerful impact on economy, society and people's lives.”

This got me thinking about compensation and recognition practices common in workplaces around the world. It’s hard for us to let go of what has become familiar, even in the face of better innovations and approaches to compensation, recognition and reward. I doubt we’ll ever leave compensation – whatever form it may take – entirely behind. A base wage for a base standard of work provided will likely remain the standard.

How the total rewards package, however, is presented – that will change so dramatically, I don’t think any of us would recognize it as such in 50 years.

Just think, one hundred years ago, management thinkers just knew industrial age workers were lazy and couldn’t be incented to work more productively. Fifty years ago, the next generation of management thinkers just knew extravagant end-of-year bonuses were the way to focus senior staff on achieving results. Today, many just know that traditional President’s Club, Employee of the Month, and other short-term incentives programs alone are the smart approach to employee motivation.

No company would consider for a second paying only one-tenth of their staff. Yet, many seem to think motivating 10% of employees is a perfectly reasonable strategy. Extensive evidence proves, however, these traditional recognition programs do nothing to motivate the vast middle-tier of employees, only serving to reinforce those who are already highly engaged. Most importantly, these programs do nothing to move the needle on critical metrics of engagement, retention, performance, or productivity.

The Network World article goes on to say:

“For all the debate over whether this is a ‘post-PC’ era, …it's hard to beat the convenience of an easy-to-use, Internet-connected device in one's pocket, but many tasks are cumbersome without a full, physical keyboard.”

The same is true for compensation plans and traditional incentives programs. They have their proper role and place. But it’s like the old adage says, you wouldn’t use a saw to hammer a nail in wall.

Are you using the proper element of total rewards to compensate, incent, motivate or encourage the actions, behaviors and results you are seeking?

As Globoforce’s 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 and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[E. James (Jim) Brennan]

Give us time, Derek. In a few years, there will be virtual keyboards so pocket personal computers (read "The Mode in God's Eye", Niven & Pournelle, 1974... now free via Baen ebook) will have full functionality. Personalized pay programs will also become a reality, so people can choose their preferred combination of Total Rewards elements in an individualized package just like they currently control their customized benefit coverages, Paid Time Off banks and payroll deduction options. Tastes are unique. Compenation Cafe habitues should recognize that menus tend to vary, and many people enjoy cafeterias, too.

There is still a place for the Mark I pencil, however.

[Laura Schroeder]

Brilliant: 'No company would consider for a second paying only one-tenth of their staff. Yet, many seem to think motivating 10% of employees is a perfectly reasonable strategy.'

(Although I have to add here that most companies would almost certainly consider it if they could figure out a way to get people to work for free. I'm just saying.)

[Derek Irvine, Globoforce]

You are correct indeed, Laura. I likely should have written, "no company can get away with..."

Jim, thank you for adding that. Personalized pay programs are truly in the near future. I think concerns about "fairness" have held us back, but we seem to be overcoming that communication challenge slowly but surely.