We're all familiar with the "deer in the headlights" experience. You know those days that you're sure everything's finally going smoothly then, without warning, you're staring at a speeding car bearing down on you. It could be as simple as a call from the CEO.
Here are a few tips from organizations that have learned about the ugly combo of panic and compensation. I promise they'll come in handy when you find yourself in a pinch.
Case #1: [Select an option: IT, Sales, Research, Production] department head is running amok.
"We need those five [select an option: Engineers, client managers, project managers, shift supervisors] or we'll go under. We have to give these guys better, more up-to-date salary offers TOMORROW or they'll get poached. I'm sure of it."
If you find out that your leadership team is suddenly faced with rocky financials, with the Board bearing down on the execs, rushed decisions may seem reasonable. These are serious situations and it's natural for execs to be tense. You'll feel tense too, since you want to understand, move as quickly as needed and help in any way that HR can. But, but, but.
Those with experience know that knee jerk reactions don't hold up over time. More importantly they often distract you from much more productive triage work when you're in a serious situation. In the case study that inspired this article, HR called me because the CIO wanted to talk over salary agreements with incumbents before there was any type of turnaround strategy. Fortunately, the CEO stepped in and got the IT leader to face facts. There were far wiser actions to take than throwing money at these guys right now. Especially if the whole leadership team hadn't conferred yet on future staffing needs.
If HR had realized it was being cornered, it could have handled the situation differently. HR could have asked the CIO some tough questions and demanded good answers before equipping him to make offers. Or, HR could get the ear of someone influential who sits in on the daily emergency meetings to get staffing issues on the agenda and organize a systematic organization-wide approach.
Case #2: We haven't checked our salaries against the market in [select an option: 3, 4, 5 or more years].
"We've got to do it now, don't we? But we don't have any money for surveys. Let's call around to see what other companies are paying for a few of our job titles." There is no question that many surveys are expensive, but why ignore reality? You need to confirm pay rates on some regular schedule. Why not work with your CFO to create a way of putting an amount aside each year until you can fund a good survey. Acting with intention like this will give you a schedule, a budget and no drama.
Case #3: "It's been [select an option: 3, 6, 9, 12 months] since we tried to fill that C-suite position. Let's try again with a bigger [select an option: salary, sign-on bonus, incentive, equity offering, loan opportunity and, and, and]."
I've seen this happen a number of times, especially with smaller organizations. They hire an executive recruiter, make their way through the list of candidates but get turned down by their best choice while the other candidates move on. Stuck and a bit embarrassed, it's likely that the executive team's next move is to hide out for a while, then improve the rewards package.
I often wonder why HR doesn't advise them to do a deeper analysis. The executive recruiter has some responsibility for how this turned out. Review the process you followed with him or her and identify key events that may have contributed to the poor outcome. In-house candidate assessment might also be off. Was the exec who walked away overqualified, overconfident or perhaps dismayed at what s/he was told about the company's current status? None of these problems could be solved by handing out more compensation.
And recognize, if your solution is only more compensation, the odds go up that candidate who is eventually hired could be overqualified, overconfident and/or underwhelmed -- but getting paid a really expensive total compensation package.
While deer can slip through your yard without being noticed, you have no such camouflage. Everything you do in compensation is communication, so why not do everything better? Start now by getting yourself a copy of the popular ebook, Everything You Do (in Compensation) Is Communication @ https://gumroad.com/l/everythingiscommunication. 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, communications and leadership to topics like the CEO Pay Ratio and performance management discussions at the Café. Before founding re:Think Consulting, Margaret was a Principal at Willis Towers Watson.
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