Got values? Most organizations do. Values have a long history but somewhat mixed track record in the organizational realm. Too often the words inscribed on the web site and touted in press releases are no better than window dressing. And sometimes worse.
This matters to us, because organizational values should provide us with important direction about where and how reward dollars should be spent. The things we reinforce and the things we ignore when we reward employees speak loudly and ultimately shape the culture of our workplaces. Unfortunately, leaders often underestimate the difficulty of adhering to the values they declare. Or as British Clergyman John Henry Newman once said: "Nothing is more common than for men to think that because they are familiar with the words they understand the ideas they stand for."
One of my memorable moments as a consultant came sitting in a boardroom with the partners of a professional services firm. One partner was making an impassioned argument for a fundamental change in how the firm's incentive plan worked. His reasoning was sound, his recommendation aligned with accepted reward principles and he supported his proposed action with logic and facts. When he finished, the room was silent. He turned to me and asked for my opinion. I essentially told him what I mentioned above here: that his reasoning was sound, his recommendation aligned with reward principles, etc. "But," I said, "there's a plaque on the wall outside this room and one of the statements on it says..." His passionately presented recommendation flew directly in the face of what was written on a very short list of organizational values. He looked at me and then around at the other partners, folded his arms on the table and dropped head into them.
Yeah.
In his Forbes article about defining organizational values, author and consultant Greg Satell highlights important truths about why values tend not to stick. Here's the one that really caught my eye.
Values cost something
This indeed is the rub. As renowned business author Patrick Lencioni says, “If you’re not willing to accept the pain that real values incur, don’t bother going to the trouble of formulating a value system.” Satell shares the examples of Nucor and Southwest Airlines, both of which pledged to never lay off employees. Both companies paid a price for this; in 2009 when the recession hit, Nucor lost $294 million and Southwest posted rare (for them) quarterly losses as well. But both companies stuck with their decision to value employees more than a few bad earnings reports.
The commitment to any values comes at a cost. It means difficult choices. For the aforementioned professional service firm partner, it meant the choice between paying people the way he wanted to pay them -- which was to begin drastically differentiating pay by individual revenue generation or treating them the way he (and his fellow partners) publicly committed to in their value statement -- which amounted to the corporate version of "all of us or none of us." The only way to avoid this cost and these choices is to define your value set in a way that is so generic, so “something-to-please-everyone” that you ultimate strip them of any real meaning.
And lessen or eliminate any influence that values might have on the way you distribute rewards.
Why bother?
Ann Bares is the Editor of Compensation Café, Author of Compensation Forceand Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations. She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time. Follow her on Twitter at @annbares.
Creative Commons image "Sticky" by Susanne
Very aptly worded and brought out Ann!
Posted by: Ashish Saxena | 06/07/2017 at 11:16 PM