Compensation specialists, what do we do well that others don't? Identify how our company will acquire or grow the talent it needs to succeed in the next three years. Build a systematic, data-based approach for a highly emotional form of decision making. Design interventions that reward when the company achieves an outcome that is needed -- and create the measures that will accurately define the outcome, as well. And there's more.
I love working in the compensation field, in concept and in action. I really do. But I struggle with some of our professional biases and find myself without good ways to articulate what bugs me, so I am grateful when I run into something to help clear up a bit of my confusion. HBR's article, "Why Organizations Don't Learn," in November's issue was an eye opener for me.
Virtually everyone in our compensation biz believes that companies must learn to be able to improve. Yet -- and here comes one of my struggles -- we seem biased toward the status quo. There are lots of reasons why this has come to pass. I can go all the back to the 70's to opine if you want. But what I really want is to get us to read the article and do some soul searching.
24 months ago, the idea of pay transparency was heresy. 18 months ago, an article in a major newspaper about non-union employee pay was unknown. 6 months ago, companies would fire employees who talk with colleagues about pay. 3 months ago, announcing the ratio of CEO pay to employee pay was . . . well, you know. And as Dan pointed out yesterday, even the august duo of Towers Watson and Aon Hewitt are admitting to what the data has actually told us for a few years, " . . . base pay is dead."
In this time of change, the HBR article gives us good food for thought. It leads with insights into the "bias toward success." Of course, everyone has this bias, from companies all the way to baseball pitchers. The HBR writers point out how an excessive, single minded pursuit of this goal impedes learning -- and, therefore, success. (Think hitting home runs but losing games.)
Here are the obstacles that we create for ourselves, based on research: An intolerance of risk due to a fear of failure, a fixed mindset on doing rather than learning (in order to achieve success in the future), overreliance on past performance and the human foible to blame failure on difficult circumstances rather than our own actions. Do some soul-searching -- don't these sound just a bit familiar?
I know that compensation practitioners have learned to thrive (or should I say, survive in the Board Room) by embodying a confidence in their own abilities and data. But look at the competencies that the global executive search firm, Egon Zehnder, have identified as most valuable in a candidate for a leadership position: Curiosity, insight, engagement and determination.
Given what is going on in our compensation playing field, I think we all could use a reality check, followed by a plan to kick the curiosity and insight up a few notches. Our profession needs it, our executives are hoping they can rely on us for both and, if you notice, our careers will benefit, too.
For example, following up on that "death of base pay" notion (which is beginning to feel like the truth, don't you think?) let's not just stick those incentives on a flat base pay and call it total compensation. Let's figure out what that change means to our sense of compensation. To employees' sense of compensation, too. Use determination to stick with this "soft" concept, until we can guide our leadership team into the next three years of talent growth and productivity, not just the next 12 months.
Where are we going with employee compensation? In late 2015, I believe that our execs, managers and employees need us to be able to lead them through anything but the status quo.
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