Compensation Cafe

The Third Wheel In Recruiting

One of the multiple hats I wear as a Compensation Consultant is working with mangers in transition, helping prepare them for their next employment offer. We look at ways to improve what the employer has put on the table, to ready candidates for negotiating the best package they can.

A common misconception among these managers is that the interview process involves only the internal recruiter and the hiring manager. A more accurate picture is that, when it comes to developing an employment offer for managerial positions the employer's Compensation function often also occupies a critical seat at the negotiating table.

• The Recruiter: The face of the company. These folks screen the candidates, present them to the hiring manager, and as necessary represent the candidate in late stage negotiations. They don't create the employment offer, but deliver it.

• The Hiring Manager: He who makes the call. Here is the person with the job opening, the decision-maker as to which candidate is selected. They hold the purse strings in the form of department budget, and they have an offer number in mind.

• Compensation: Thumbs up or thumbs down? This Analyst, Manager or even Director often plays the role of the gatekeeper or policeman, the one at the table with the policy manual in the left hand and a spreadsheet of employee pay practices in the right.

Like a branch of the federal government, Compensation serves as a check and balance against the other two players; the objective advisor intent on preventing a blind focus on an individual candidate, to the possible detriment of existing employees or the business. Here is the "bad guy" cop who reminds others of budgets, precedence and internal equity issues.

A Necessary Evil?

Once you reach the management level it's common practice for the recruiter and the hiring manager to talk with someone in Compensation to help determine (or simply review) an appropriate offer.

Firstly it's likely a matter of policy, a double-check requirement that for management roles HR must be involved with setting the compensation package.

Then there's the matter of heightened sensitivity, where a limited number of key jobs creates an environment of greater visibility and individual impact. The company can't afford to make mistakes here, as the health of the business itself may be at stake. Even senior hiring managers often look for support when they seek to make a critical employment decision.

What Compensation Does

When dealing with management offers Compensation would consider:

• Where the suggested base salary fits within the hiring range, vs. candidate expectations, the internal budget, the previous job holder and how large an increase it might represent for the candidate.

• The salaries of similar or peer job holders and those at the next level, to ensure the new employee doesn't create compression issues with those in larger roles.

• As may be necessary to assist with negotiations, to suggest where opportunities exist to improve the offer without harming internal equity concerns, creating damaging precedence or budgetary difficulties.

Compensation would typically not consider:

• Whether the candidate is qualified. They wouldn't conduct interviews or have any face time at all.

• Organization issues such as title, reporting relationships or job responsibilities. Any of those issues, and some can be problematical, should be dealt with before candidate selection.

• Wouldn't compare the candidate against other employees, except for the potential of internal pay equity.

• Typically would not have the authority to prevent an offer, but would have the responsibility to give the offer visibility beyond the hiring manager if a concern is raised. In other words, if consensus cannot be reached and the hiring manager is adamant, it's time to raise a red flag for a higher level arbiter.

Compensation doesn't create the offer either, though they may make suggestions. More typically they react to what the hiring managers are planning.

Compensation's role therefore is one of protection, of making sure that everyone's eyes are open as to the ramifications of whatever is put on the table for the candidate to consider. A winning formula is the goal, where internal equity has been maintained and the new employee is excited and engaged.

 Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.

Creative Commons image,"Screaming Kitten" by Galgen TX

Cafe Classic: The Best Recognition I Ever Received

Editor's Note: As HR and compensation professions, sometimes we learn best from the reward lessons that impact us personally.  This was recently illustrated beautifully in a post by Jim Brennan.  In today's Cafe Classic post, first published on January 9, 2012, Jacque Vilet shares a story of her own about the power of recognition in her professional life.

The floor is yours, Jacque!

You know Derek Irvine writes some great articles at the Compensation Café regarding recognition.  And 99% of it has nothing to do with money!

I’ve been thinking about that a lot recently.  It’s true . . . at least for me.   The best recognition is not about money.   It’s about feeling appreciated.  It’s about feeling that you did something good, and it was noticed.   It makes you feel you are not just a cog in a wheel but a person. It makes you feel that you are valued for your expertise, good judgment, decisions and  recommendations. That you have the best interests of both the company and employees at heart.

I want to tell you about the best recognition I ever received in my career.   The company shall remain nameless but other than that it is a true story.

I went to work for a company that had operations in 20+ countries.  I was the International HR Manager.  There were no HR people outside the U.S.   My manager told me they weren’t sure how many employees they had at each location and that this was embarrassing.   He said the CEO was upset that HR could not even answer a simple question like “How many employees do we have outside the U.S?”

My manager also told me that he didn’t know if the company was legally compliant in each country, had no idea what, if any, policies each location had, what their compensation was or what benefits they had.   He told me “it’s yours --- go for it”.

I did audits in each location, participated in surveys, made sure each country was legally compliant, worked with business units to insure their employees in each location were paid competitively, and recommended supplemental benefits where needed.  Each time I needed approval for something I was given the go ahead.

Toward the end of the “cleaning up” phase, I decided the company needed to implement multinational pooling.  It was approved by my manager.   I next made my presentation to the SVP of Administration.   He asked me to come back to him and discuss it  three times.   At the end of the third session he finally looked at me and said ---- and I’ll never forget this:

“Jacque we hired you for your expertise.   None of us here in the company know anything about international HR.   I still don’t totally understand multinational pooling.  I rarely approve something that I don’t fully understand.   But if you think we should do it I approve it.   I trust you and believe you have researched this and know what is best for the company and our employees.”

Well . . . . . . for the next week I was walking on air.  I can’t tell you how much that comment meant to me.   The SVP could have given me a “dinner for two coupon”, a $100 check, a plaque, etc.   But the best thing he did was give me recognition that made me feel like a million dollars.

I can assure you that I worked even harder than ever from that moment on.   I was determined to never make the SVP regret his words.

I have not forgotten his comment, and I never will.

Jacque Vilet, President of Vilet International, has over 25 years’ experience in Human Resources. In her current role she works with start-ups and multinationals on both domestic and international HR issues. Jacque has an M.S. in Psychology and an MBA from Southern Methodist University. She speaks at conferences in the U.S. and overseas, contributes to various HR and talent management publications and conducts frequent webinars.

Time to Work Out Your Chicken Legs

We have all been to the gym or have seen this guy walking down the street (here’s an example). He’s the guy with those big arms, broad chest, and a narrow waist looking like a cartoon superhero. The guy is impressive in a t-shirt but carried around by skinny chicken legs. It’s obvious he puts in the work. It’s also noticeable what he likes to do and what he doesn’t.

More and more companies have compensation programs that look like this guy. Pay for executives is muscular and impressive. It has outpaced pay at lower levels for a long time. Despite how strong and impressive these companies’ pay look, the truth is they are vulnerable to a competitor kicking their legs out from under them. Heck, some of these companies have such weak foundations that they could easily trip themselves, tumbling straight to the ground.

Money spent on pay innovation, research, and consulting is first focused on executives. If there is anything left it trickles downward and disappears quickly. These chicken leg companies seem to believe that performance is based on a strong upper body. Any athlete will tell you this isn't true.

Great athletes in almost every sport first have incredibly strong core muscles. The middle supports and directs every movement while allowing for long-term growth above and below. Next, come powerful legs. These are the foundation of any great performer. They create stability, speed, and maneuverability. Only after these components are working at peak condition does it make sense to build the upper body. Even then the goal is lean usable strength not gaudy restrictive size.

Doing squats and sit-ups isn’t much fun. The results from these efforts are far less visible in everyday activities. Convincing management that the rank and file should receive a bigger percentage raise than the executive is even less fun. The results are also unlikely to be as immediately visible as a great executive incentive plan. But, once the effort has been made consistently for awhile, you will not only see a difference but, it will allow you to be better at a wide array of other things. The path of least resistance is undeniably seductive when you are already swamped with other projects. And, the people who need to approve your ideas are the same people who will feel the most negative Impact. Try it anyway.

Look at your company in a mirror and determine if you are this guy. Tell your executives you read about this on the Internet. Tell them other companies are looking into it (and they are). Heck, use me as the bad guy. But, mostly tell them that you are passionate about doing the best you can to help the company succeed. Right now, that means doing the tough legwork.

Dan Walter is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture. Grab a copy of Dan’s new comprehensive issue brief, Performance-Based Equity Compensation. Dan also cowrote “Everything You Do in COMPENSATION IS COMMUNICATION”, with Comp Café writers, Ann Bares and Margaret O’Hanlon. And believe it or not, he has co-authored “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives.” Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

The CEO Pay Ratio: Great Gift Ideas for Every Compensation Practitioner on Your List

Listen. Do you heard that sound on the rooftop? It's the sound of Executive Compensation practitioners trying to escape before they get dragged into the CEO Pay Ratio brain drain.

Don't kid yourself. Anyone who isn't feeling a bit anxious about this isn't thinking real hard. But worrying will only earn you coal in your stocking. Instead, here's three great gifts to give yourself and your colleagues. I promise that, eventually but reliably, they will help you to be more jolly in 2016 than you imagine you could ever be.

1. When you come to a fork in the road, take it. Thanks, Yogi, for your advice on this one. Complaining and resisting is only going to make things worse for you. The ratio is as done a deal as anything else. The government could change their minds, just the way they could all play more nicely together -- it's a great idea but it's not going to happen.

To get yourself started in a thoughtful way, run don't walk to WorldatWork's webinar called, "The CEO Pay Ratio-Understanding the New Rules and Preparing to Comply." (It looks like access ends on Jan. 25, 2016.) The discussion of the pay ratio is mostly unemotional and consistently clear, and the presenters explain how to make the ratio calculation far, far less ominous than you are imagining.

Best of all, Stephen Eliseo, CCP, who is the Director of Executive Compensation for Johnson & Johnson describes what his company has learned by doing dry runs every year beginning 2010 in preparation for pay ratio disclosure. That's right, they have completed five years of experience and boy will their insights be valuable to you. Even if you are expert in the CEO Pay Ratio final rules, there is much to be learned from the implementation ideas that are discussed in the webinar -- especially the emphasis on doing multiple dry runs so you can refine your assumptions, numbers and, frankly, understanding.

2. Learn to take advice. The collaboration needed to pull this off could be more extensive than you have had experience with. This is not just an executive compensation exercise, it's about all forms of compensation. The employee compensation staff will need to help define who the median employee is, and weigh in on how that definition aligns with your compensation philosophy. So, employee compensation is not off the hook here and should be studying up, too.

You'll also need to involve the Compensation Committee, Legal, Payroll, HRIS, possibly obtain pension numbers and more, for all (or most) of your worldwide locations -- not once but often over the period of time that you are tinkering. It's going to take a lot of relationship building with all of them to engender the responsiveness level that will be helpful in your quest.

3. If you think this is just about numbers, you're bound to be embarrassed. Everyone is worried about explaining the pay ratio, but even the WorldatWork webinar doesn't take your communications challenge seriously.

This is my gift to you -- in the same way you need to do multiple dry runs of the numbers, you HAVE TO DO multiple dry runs of the communications starting early in the year, so you have time to try at least three different approaches. Remember it's not just the pay ratio that is going to raise issues. I think that for many employees the "median employee" example will be even touchier. After all, it's a lot more likely that an employee will believe that her/his work is like another employees' than it is like the CEO's, and question why s/he is paid less than the median employee, ineligible for a bonus and so on.

Obviously, it's much too early to offer solutions, but in my next article I'll include some stocking stuffers for the wise and well-behaved among us on how to manage the complicated communication challenges that we are facing.

Wondering what to get for all your favorite CCPs, CECPs, GRPs, ACCPs and MCCPs? You can't go wrong with a copy of the popular ebook, Everything You Do (in Compensation) Is Communication @ www.everythingiscommunication.com. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. 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 at Towers Watson.

The Future of Transparency

A move toward pay transparency is inevitable. Who’s willing to argue with Ed Lawler?

Let’s review why. We’ve all heard about how transparency builds a more productive workforce, a healthier company culture, greater trust in company management, and better business outcomes. As Yul Brenner would say “et cetera, et cetera, et cetera . . . “.

Gen Y, which makes up a third of today’s workforce, is accustomed to sharing personal information through social networks and are instrumental in shaping this trend. Transparency also ties into some of the idealism underlying the sharing economy, with people crowdsourcing information on all sorts of things.

In addition there is a huge amount of salary information available on the Internet, including third-party websites such as Glassdoor.com, Payscale.com and Salary.com. Sharing salaries on social media is growing in popularity. Internet searches for the phrase "salary transparency" grew about 63% from March 2014 to March 2015, according to Google Trends data.

So like it or not, it seems there's no putting the genie back in the bottle. Like nature, pay transparency will not be denied.

However, with transparency comes obstacles. Companies have to clean up all their pay discrepancies, gaps and other “dirty” compensation laundry. And transparency is anything but black and white. In spite of clean ups there will still be some remaining outliers that seem out of whack at first glance but make perfect sense when understood. Companies must be prepared to explain them.

But let’s look ten years out. Some economists and management researchers are already studying how transparency in salaries is affecting today's labor market (see #3 below). Now trying to predict the outcome of that research is above my pay grade, but I can throw out some possible outcomes on compensation practices.

1) Pay everyone in the company the same like at Gravity.
2) Let employees either decide or vote on their own pay as in Figure 53. Similar cases for this exist at Hanno and Semco.
3) Pay employees in each pay grade or job the same. There’s some interesting research that shows evidence of “compression creep” even today. (See “Does Transparency Lead to Pay Compression?”, Alexandre Mas, Princeton University, 2015)
4) Give the same percentage of base salary increase each year based on general market movement
5) Use recognition, team bonuses for differentiation and premiums for critical skills

These kinds of pay practices would go a long way in eliminating such things as pay gaps including gender pay, pay negotiations, poor manager communication of current practices, etc. Using such differentiators as team bonuses and recognition based on goal accomplishment or some other objective/measurable criteria might be easier to explain and more defensible. Simpler, easier and more workable. Plus changes like this might be more appealing to younger generations.

I don’t know if the future of transparency will lead to any of the possibilities I’ve listed, but it will be interesting to watch as transparency becomes the norm.

What do you think?

Jacque Vilet, President of Vilet International, has over 25 years’ experience in Human Resources. In her current role she works with start-ups and multinationals on both domestic and international HR issues. Jacque has an M.S. in Psychology and an MBA from Southern Methodist University. She speaks at conferences in the U.S. and overseas, contributes to various HR and talent management publications and conducts frequent webinars.

Pay Bureaucrats Get Special Rewards

Those who control pay increases have leverage over actions that can have far-reaching consequences.  For example, at one time, I had a life-changing experience while routinely processing pay increases approvals at a large corporation.  Paperwork arrived one day requesting an exceptionally large early merit increase outside policy guidelines for a young research scientist.

After checking the employee's performance evaluation file, I frowned.  A few years of excellent work had earned him strong merit increases, but his most recent job performance had slipped badly.  No new evaluation supported the extraordinary early increase requested now.  His present salary was generous.  There was no justification for approval of a policy exception.

When I investigated further, it got worse.  The immediate supervisor told me his subordinate's performance had plummeted in the few months since his last review!  The performance deterioration was so sudden and dramatic that the employee was ordered to take a complete physical examination.  It revealed he was dying of a rare fast-acting fatal brain disease.

Still in his late twenties, with a wife and kids, he would leave little money to his family.  His boss had requested the large early pay increase to raise the base salary which would determine the disability stipend paid while unable to work. Everyone in his chain of command was anxious to activate the salary increase before the unfortunate young man officially left work permanently and became ineligible for the raise. I swiftly agreed: the salary increase was a small but worthy gesture.

Before approving the raise, I considered what effects the pay increase would have on his total reward package.  His final paychecks would be a little bigger.  His disability payments would be slightly higher. His life insurance amount might change as well because it too depended on base salary.  It suddenly occurred to me that our company-paid life insurance policy specified fixed absolute death benefits dollars according to where the annual salary fell.

I discovered that the exceptional increase requested by the boss would not change the death benefit.  But if the increase were four percent higher, his salary would enter a higher benefit payment category, doubling the life insurance payable to his family.

Quickly calling the relevant top corporate executive, I explained the situation and presented a proposal.  By extending our generosity a little bit more, we could perform a REALLY good deed.  The executive was aware of the tragedy and had earlier agreed to the original raise for the unfortunate scientist.  I argued that another four percent and its miniscule eventual impact on our long-term life insurance experience rate was a small price for the human benefits we could provide.

I clarified that our discussion was confidential.  No one else was aware of the opportunity I had discovered to help the family this way.  No one would ever learn about the possibility if he rejected it.  Pointing out that no one had asked for this and we didn't have to do it, I added that once the thought struck me, I could not in good conscience fail to call the opportunity to his attention.  His approval was necessary for such an extraordinary and exceptional raise that exceeded the special increase he originally endorsed.

Delighted with my pitch, he hesitated for hardly an instant before agreeing.  I then immediately went backwards through the chain of command, informing the various executives and managers that papers authorizing a new salary increase were being prepared as I spoke.  They were overjoyed at the news that I had actually approved an even higher amount, had found a way to supply far more insurance money and had already cleared all obstacles.  I expedited the paperwork, making sure that the scheme worked as planned, and then told the employee's immediate supervisor to notify him of the unexpected windfall the corporation had arranged for his survivors.

When the employee did die soon afterward, his passing was eased and his family's burden was lightened somewhat by the corporate action.  No one was told of my part; but I still treasure the knowledge that I was able to make a bureaucratic job highly responsive to human values and to assist other managers to feel pride in both their company and themselves.

E. James (Jim) Brennan is an independent consultant with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution.  After HR corporate jobs in chemical/pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until 2015.  A prolific writer (author of the Performance Management Workbook) and speaker, he gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service.  Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Image "Smart Beautiful Business Woman Posing" courtesy of stockimages at FreeDigitalPhotos.net

 

Are You Watching The Store?

The pending start of a new business year brings with it both the end and the beginning of the company’s annual management incentive plan cycle. While the left hand is busy processing performance assessments and award payouts the right hand is getting ready to launch the new cycle. In many companies this fresh start becomes an automatic activity, an administrative process not given much thought past doing what they did last year, and even the year before.

Here We Go Again

Perhaps instead of a rubber stamp now might be a good time to review the design, communication, administration and payment history of your annual management incentive plan and consider breathing some new life into it. Because if left on autopilot too long it’s surprising how many extra names get added to the incentive-eligible rolls, adding significant cost without proper review.

Eventually senior management will notice the ballooning costs and clamp down, either by reducing eligibility in a broad-based fashion, and /or by reducing incentive payment opportunities. You don’t want to get to this point.

Has your company made too many people eligible for the incentive program? Take a quick look at a 3-year growth curve of positions / employees being included. Would you consider them all deserving? Is someone making that call, or does title or grade designation become the sole deciding factor? Can you explain the ROI for the growing total in management incentive pay?

Employees deemed eligible for an incentive should have a line of sight between their performance against measureable objectives and corresponding incentive payments. If they don’t, what are you rewarding? Your plan shouldn't be a profit-sharing scheme, where eligible employees light a candle in the window and hope that the company does well.

Companies typically use the “manager” title as an eligibility cutoff, but perhaps what you name a position shouldn't be the sole criteria. There are those whose responsibilities include managing people, versus other individual contributors who manage a budget, or a non-staffed function, or a specific responsibility.

Using a grade designation can have its own problems; is everyone in a grade automatically eligible, and if not how do you differentiate between positions, when the company has already deemed all of similar (graded) value? Slippery slope here.

If you’re suffering from title inflation and have granted puffed-up titles for certain employees, are your Managers actually managing at all, or are they only supervising or are only technical experts with a bigger title?

Have a care that your pay-for-performance management incentive program doesn’t evolve into an entitlement program.

It's Time; Where's My Payment?

Something else to look at is whether the incentive award is actually at risk. How many of your eligible employees don't receive an award each cycle? If practically everyone receives an award, perhaps instead of an incentive plan what you have is a delayed compensation plan; managers put in their twelve months and then expect a bonus payment. I have clients in Europe where at least a portion of a manager's annual incentive is guaranteed.

Does your incentive program require behavior above and beyond, with individual objectives linked to broader company goals? Or are your objectives created at the end of the cycle, simply to comply with some HR assessment form that they must complete?

At the lower limits of eligibility companies may offer a 5% incentive target. However, that low a reward opportunity isn't a carrot at all. You won’t change behavior, never mind get anyone’s attention, so why bother? If behavior isn’t going to change, if you’ll get the same performance as before, but now for an additional cost, what's your investment return?

Now is the time to review the effectiveness of your annual management incentive plan and suggest improvements to increase effectiveness and provide more "pay for performance." Once the current payment processing cycle is complete the pressure will be on to roll-out the 2016 program. At that point the die will be cast for another year.

It will be too late. Your EASY button will have become your $ THROWAWAY button.

 Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.

Creative Commons image, 'Bureaucrat," by Delmarva.Dealing

Our Nearsighted Friends and Us

I have a brother with 20:15 vision. For those of you normal humans, this means he can see things clearly in the distance that the rest of us see as only a blur (if at all). I have a sister with, to be kind, worse vision. Like many people, her vision imperceptivity worsened over decades. She began to think it was normal to see street signs only as she came close to them. It did not seem odd that she depended on her experience rather than her senses. And, simultaneously, most of her friends were also slowly losing their ability to see into the distance so they didn't notice anything changing.

Perhaps the world of executive compensation and all of our friends have slowly become nearsighted.

A recent New York Times infographic does a good job at showing the short-term cycle linking shareholders, proxy voting, pay practices, trading and information. At first glance, the graphic seems fairly expected. However, when we look back on how things were ten or twenty years ago, the cycles are clearly tighter than ever.

It would be so easy if we could blame this growing focus on a single entity. Doing so would allow us to come up with an elegant solution. The truth is that everyone in the loop is contributing to the problem. People want things fast. Everyone works hard to satisfy this desire. People want things accurate and the shorter cycles reduce the impact of incorrect guesses and provide results that are more inline with expectations. But, as we strive to meet turn-round times and make better predictions, we may have lost some of our ability to see and plan for the long-term.

It seems to be a rare company that considers five or seven years as an expectation for a long-term incentive. A few decades ago stock options were regularly granted with 25-year or longer terms. Corporate growth and shareholder investments were often measured in decades. But, that was also a time when a telephone looked essentially the same for about 50 years. It was a time when you would wait 10 years to watch every episode in a TV series (rather than binge watch 120 episodes over a long dark weekend.)

In many cases we, like my near-sighted sister, have adapted well to our lack of long-term vision. Heck, my sister hasn't been in an accident and most companies actually do a fairly good job at aligning pay with performance. But, our inability to focus on the goals in the distance may also be driving the hyper-speed growth of executive pay that often aligns with similar speed in the growth of company values.

There is one real and seldom mentioned risk. When operating at high speed in smaller and smaller loops the effect of making a mistake can be catastrophic. We are on a highway that is increasingly crowded filled with faster and faster vehicles. If something goes wrong, we have given ourselves very little room to navigate to a safe space. At some point in the not so distant future, truly successful companies may be those with executive compensation professionals with 20:15 vision and plan for how to navigate even the most unexpected events ahead.

I am interested in hearing how your company is dealing with the speedier expectations and lessening ability to focus on the long-term issues that seldom make into the current loop.

Dan Walter is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture. Grab a copy of Dan’s new comprehensive issue brief, Performance-Based Equity Compensation. Dan also cowrote “Everything You Do in COMPENSATION IS COMMUNICATION”, with Comp Café writers, Ann Bares and Margaret O’Hanlon. And believe it or not, he has co-authored “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives.” Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

The Power of the Joy of Work

Editor's Note: Today's post comes to us courtesy of guest contributor Chris Dobyns.

Let’s face it, despite what any employer does to try and make the work environment a better place for employees, you’re still asking people to be somewhere other than where they’d probably rather be and to perform work. It’s only going to get just so “good”, no matter what you do. 

One of the Keys . . . Variation

Over the course of several decades, I’ve managed to figure out that employee satisfaction can be enhanced by, among other things, varying people’s assignments periodically.  Fairly recently we had an unusual opportunity in our work unit, that was pretty far afield from our regular portfolio and standard work product.  In support of a conference presentation, we realized we needed to produce an overview video about our organization, with a very short turnaround time. And when we requested assistance from our multimedia department, we received the politely perfunctory (and always irritating) response, “we’re too busy”. 

You Can Go Your Own Way . . .

So, I solicited internally for folks who might be willing to work on this video, and got a handful of takers.  In fairly short order, we developed a storyboard and a script, recorded the narration, edited a soundtrack, and selected a series of video clips and still photos.  Post-production brought all the pieces together in a two minute video suitable for primetime – and was completed in less than five days.  Unfortunately, due to a lack of necessary software, combined with some unique “limitations” of our line of work – most of this video development needed to be conducted at home, and after normal work hours. 

After seeing the finished product, the group that contributed to this effort were totally jazzed, and couldn’t say enough about what a great experience it had been, how they had learned so much about digital video production in such a short period of time. And maybe most importantly, just how much fun it had been working on something that was so different.

You Spoke Too Soon

A week or so later I made the mistake of describing to a long-service federal manager about the great experience we’d had in making the video. At that point, the other manager asked me how I had ensured my employees had been compensated for their time while working on the video. Unfortunately, I had forgotten that asking a federal employee to work on anything uncompensated was a cardinal sin that ranks right up there with practicing witchcraft (bad) or advocating for the abolishment of the Internal Revenue Service (worse). Summoning my courage, I stated that none of my employees had ever even asked to be paid, and that they appeared to have volunteered simply for the “joy of the work.”

The Punchline Follows

That elicited the probably unintentionally scornful response from the other manager that, “our employees aren’t allowed to experience that level of joy from their jobs . . . unless we pay them.”

Thankfully, I managed to suppress my initial reaction, by reminding myself about the strict prohibition against violence in the workplace.

The Epilogue

When I later relayed these comments to the video “narrator”, she responded that, “if she’d had to be paid for doing that, it would have taken all the joy out of the experience.”  A direct quote and sage words indeed. 

After so long in this business, I still find myself surprised by these almost counterintuitive intersections of human behavior and motivation and where any allusion to pay and compensation almost rise to the level of being “dirty words”.

My suspicion is that there’s more than a smidgen of psychology in all of this. The continued challenge is operationalizing that psychology and finding the balance between the work that can be done and the work that must be done. 

Based on the above quote from my fellow manager, it’s maybe no surprise that the federal government still has a ways to go in understanding how people really want to be paid and managed.  More surprising is never to discount the benefits of encouraging employees to take on new experiences that oftentimes can be fun, and reinforce the possibility and the power of the joy of work.  

Everyone probably has a different perspective.  What’s yours?

Chris Dobyns, CCP, CBP, is Manager of the Office of Human Resource Strategies for one of the largest U.S. intelligence agencies. The Office of Human Resource Strategies is responsible for compensation and incentives, occupational structure, recognition and rewards, HR policy, and human capital program evaluation and assessment for his Agency. Chris has worked in the area of compensation for more than 30 years, and has been employed in various compensation-related positions by a number of large, private sector companies including, Sears, Roebuck, Arizona Public Service and Westinghouse Savannah River Company.

Image courtesy of fotolia, "Happy Young Businesswoman" by Rido