Paying Attention?

I've been thinking about alignment this week, mostly because I am not really sure about it at the moment. It seems like we have some competing notions floating around, guiding our "cutting-edge" compensation decision-making. If I'm right and we just haven't noticed yet, here's a start.

The most talked-about shift in compensation strategy in the last three or so years has been the allocation of resources to the "highest performers." Through pay for performance, they've always earned the highest rewards, but our resource-constrained situation has begun to turn what was once a decision about across-the-board merit increase allocations into a process that is more like, "First them, then let's see how much is left over." Incentives are being introduced in part to make this type of reward allocation easier. Whether shouted out or left unspoken, belief in a meritocracy is trending. True believers wouldn't consider any other way to reward.

I'm not bringing this up to just shoot it down, as much as to encourage us to check our logic.  At the same time that we've been gathering the league of the extraordinary together, we've been talking about the importance of the community. Changes in how we work together are filtering down from the Googles of the world to the less adventuresome.

First, there was the emphasis on team decision making, then on collaborative decision making -- neither of which rely on superheros. Now the "democratization" of the workplace is accelerating, as Ann Bares pointed out in her recent Compensation Cafe post, "Ready for the Uber-ification of Work, Performance and Pay?" In this "free agent nation," employees assess their own interests and value to the organization as they choose assignments and gravitate toward teams with which they feel affinity.

I'm not saying there is an outright contradiction between the pay trend and the talent trend, but there isn't real solid strategic alignment, either. The disconnect popped into my head this week when I looked at the landing page for a book that Seth Godin is recommending. It's from a cutting edge non-profit called DoSomething that is involving "young people" in social change. The founders have compiled a book called The XYZ Factor: The DoSomething.org Guide to Creating a Culture of Impact, which has sold out on Amazon as of today. In the introduction they claim:

The goal of this book is to foster one thing: Productivity. This book is not a manifesto. This is a business book. An introduction to a new kind of office culture created by the arrival of the Millennial generation (our generation) to the workforce.

Their insights into the generation include:

• We are sharers
• We value choice; choice is the norm
• We move fast
• We've been programmed to crave feedback
• Failure scares us; we believe in do overs

Now, I'm not a really firm believer in warnings about the strategic impact of "generational waves" on business. I've never seen data that made me comfortable. But, as a change manager, I am a believer in understanding diverse attitudes and beliefs when engaging teams in a mission. Clearly, the Millenials want us to know about their differences (although they may not be as different as they think!) And, clearly there is growing interest in less hierarchy and more streamlining in decision-making in many, many organizations. This doesn't preclude a meritocracy, but it does create some obvious contradictions.

Back in 2006, regular Harvard Business Review contributors Robert S. Kaplan and David P. Norton wrote, "Most organizations attempt to create synergy, but in a fragmented, uncoordinated way." Since our job in HR is to keep this from happening, I thought I'd point out that we may be tripping ourselves up right now. Or we may need this phase as an intermediary step to understanding what effective alignment between pay practices and results-driven behaviors is beginning to mean. Either way, I think we owe it to our organizations to keep a closer eye on things.

To polish up your alignment skills, get yourself the popular eBook, Everything You Do (in Compensation) Is Communication. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. It's easy to download the book at www.everythingiscommunication.com. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal with Towers Watson. 

Comments

[E. James (Jim) Brennan]

Agree with Margaret's central point, that chaotic diversity is increasingly the "trend" of the future. Monolithic uniform practices are essentially dead. Sure, there are recalcitrant bureaucratic dinosaurs staggering off towards extinction in their narrow industry-specific niches where new ideas are immediately killed; but the challenge we face is to effectively sift through the many potentially productive options being tested and explored in this 21st century.

No one method is best in all circumstances. That means trouble for the inexperienced comp people but infinite opportunities for others.

[Margaret O'Hanlon]

Great angle, Jim. I'm looking forward to the future you're describing!