Compensation Cafe

The Benefits of Recognizing New Employees

A common question I hear from our clients is how they can best improve upon the new employee experience. They want to know how to get employees up to speed quickly, make sure they feel like they belong, and of course, increase the chances of long-term retention.

In addition to strong onboarding and newcomer socialization, social recognition is an effective lever available to HR and business leaders. The truth is new employees are heavily engaged in collecting information and knowledge about their role, co-workers, teams, and organization. Recognition can help communicate much of that information.

Early recognition moments provide a good source of information on the expected behaviors and values of the team and organization, establishing a trajectory of successful performance from the start. With a social feed, newcomers can observe their own contributions alongside those of their teammates, further cementing an idea of what success looks like. Receiving recognition strengthens the social connection between colleagues, a vital part of the socialization process, ensuring that new employees feel like they are a meaningful part of the team.

Given those benefits, what are the barriers that some organizations face in successfully leveraging newcomer recognition?

Perhaps the largest obstacle is one of mindset. “What could a new employee be contributing that early?” Although it is true that newcomers take time to learn the business, there are good reasons to provide recognition early on.

As I mentioned above, social recognition can accelerate new employees along a trajectory of successful performance. A key part of that acceleration is to reframe contribution less in terms of what might be expected of a typical employee, and more in terms of the growth and learning relative to what would be expected of a typical newcomer.

Opportunities abound for recognition around proactivity on a project, innovation as the result of fresh eyes on an established process, or making valuable new connections for the team.

In addition to a logical argument for newcomer recognition, there is also growing scientific support. In his keynote address during the 2017 SHRM Annual Conference, Laszlo Bock pointed to specific, evidence-based practices to make work better. One was to “offer a nudge,” particularly for new employees.

While at Google, Bock’s team conducted research that found the average time for newcomers to be productive decreased from nine months to only six, if small nudges were provided – things like encouraging meeting more people, asking more questions, and having the right tools.

Social recognition easily fits into this category of “nudges,” as relatively minor actions that have a lasting impact amid the hustle of onboarding and socialization.

How does your organization integrate recognition into the new employee experience?

As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

I Saw It On Dilbert

Here's a bit of practical advice for every professional out there, whether you're in Human Resources or frankly any functional department at all.  If you see a work practice or policy highlighted in the Dilbert comic strip (a world of credit to Scott Adams), you should immediately stop that policy or practice as a bad idea.

For the uninitiated out there, since the 1980's Scott Adams has written about the dysfunctional workplace and its cast of oddball characters that we all recognize.

I used to work for a fellow a number of years ago who had his secretary transcribe his voice mail messages into written text.  He wouldn't listen to any of his peers/colleagues, never mind lowly little me, that such a practice was - silly/bad/impractical/inefficient/time-wasting, etc.  But when he saw that same practice ridiculed on Dilbert, he stopped that very day.

The World Of Work

Who of us out there cannot identify with the experience of having to work for someone like the "pointy-haired boss?"  Or the co-worker who really doesn't do anything and always seems to get away with it?

Whether it is Wally the incessant coffee drinking slacker or Dogbert, the HR Director from Hell when these characters suggest a certain course of action I'm usually running in the opposite direction.

Because Dilbert loves to skewer the often ridiculous realities we all seem to face at work.  We can readily identify with the foibles of management, laugh at the meaningless meetings and dysfunctional co-workers, then commiserate with Dilbert himself as the maligned and abused Engineer who keeps trying, day in and day out to keep his sanity in an insane world.

Entertainment

For your entertainment, I have included a few quotes from Scott Adams that relate to the workplace.  You may not agree with everything he says, but he certainly seems to have his hand on the pulse of a commonly mismanaged workforce.

• “There is no idea so bad that it cannot be made to look brilliant with the proper application of fonts and color.”   Add multiple pages of fluff, lots of colors, a spiral bound booklet and you have the common consultant proposal.
• “Hard work is rewarding. Taking credit for other people's hard work is rewarding and faster.” I've experienced enough examples of this practice to still get angry at the memories.
• “The job isn't done until you've blamed someone for the parts that went wrong.”  Finger pointing is a real office skill set, where some players are notoriously Teflon-coated and never seem to face the music.
• “Be careful that what you write does not offend anybody or cause problems within the company. The safest approach is to remove all useful information.”  Have you ever read an organization's mission statement?  Or almost anything written by corporate communications?
• “If you want to kill an idea without being identified as the assassin, suggest that the legal department takes a look at it.”  A good technique for the passive resistor, one who spends more time killing ideas than creating them.
• “Our system requires a continuous supply of highly capable people who are so disgruntled with their jobs that they are willing to chew off their own arms to escape their bosses.”  So maybe it's true that employees quit bosses, not organizations.
• “Accept that some days you are the pigeon and some days you are the statue.”  It rains on everyone.  Those who are successful grab an umbrella and press on.
• “Lately...the Peter Principle has given way to the "Dilbert Principle." The basic concept of the Dilbert Principle is that the most ineffective workers are systematically moved to the place where they can do the least damage: management.”  Haven't we all seen this?  Don't we all know someone?  How/why did Bob/Sally get promoted?  They must have photos from the Christmas party or some such inexplicable rationale.

So if you read that Wally or Dilbert or the pointy-haired boss are experiencing a new policy, procedure or work practice, laugh along with them even as you move your own thoughts/practices quickly in the opposite direction.

Consider these characters your "daily work alert."  They're more accurate than the weatherman.

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, "Dilbert - How to get motivated," by Arpit Gupta

Cafe Classic: Should the Boss Always Earn More?

Editor's Note:  Are there times when the notion of a "supervisory differential" - the adherence to ensuring a superior always earns a certain amount (or more) than his/her subordinates - doesn't apply?  As with many so-called rules, the hallmark of a good professional is understanding when exceptions can and should be made.  Jim Brennan explains in today's Classic post. 

No, the boss doesn’t have to earn more than every subordinate. The boss usually earns more, but there is no rule that requires a manager to be paid more than anyone who reports to them.

In general, each job is paid according to the organization's estimate of the value added by that person in that job. Long service in the same valuable position frequently means that a senior specialist who has earned national recognition in their field might earn a very high salary due to large increases accumulated over the years.  Their pay will frequently exceed that of their brand-new boss hired right out of school but expected to rise in the company. 

One major trucking firm used to hire ex-football players graduating with fresh business degrees from the college known as “Linebacker U” to start out as entry level dock foremen.  The drivers typically made far more money than their nominal “supervisors,” but they would never mess with the kids, who were quite physically and mentally imposing.  Nor did the relatively “underpaid” beginners begrudge the crusty veteran over-the-road long-haul drivers their higher earnings.  After all, this was the mere beginning of the college graduates’ rise to management levels, while the drivers fully deserved their wage for the sacrifices their role demanded.  If the foreman wanted the driver rate he (this was pretty much in the pre-EEOC Stone Age where female dock foremen were rare) could always join the Teamsters or buy an owner-operated rig.

It is common to have overlaps in pay structures; so that the top end of a technical ladder may permit pay higher than the bottom rung of a supervisory scale.  If there is a situation where one career is ending while the other may be starting, no inequity will be perceived by incumbents.  There also used to be a deliberate overlap in bonus-eligible pay structures, creating a juncture point looking like a Y turned 90 degrees to the right where employees whose total compensation included contingent pay packages would have lower guaranteed base pay than their peers ineligible for bonus.  Their base line would have a lower slope, while their intended total compensation line would be higher; but, of course, if they did not perform adequately or produce the desired output, their TC would remain lower than non-bonus-eligibles who might even be their direct-reports.

Sometimes the boss is simply a bureaucrat paid to handle budgets or funding or do other things different from the skills or competencies of the superstars supervised. The most brilliant Nobel-prize-winning research scientists often report to program managers who make less than they do; but their skills lie in different areas. Think of any professional sports team, where the General Manager hires and fires and the Coach directs the subordinate players but both of those senior executives generally earn less than the top superstar players.

Different jobs bring different pay. And having a long distinguished track record of exceptional performance in a position will usually mean that your pay will exceed that of most of your peers and maybe some of your supervisors. That's especially true if the boss is relatively new to their job, even though the lower-earning supervisor may be "worth more" in the long run to the enterprise and may have a higher range of potential pay.

These are all exceptions to the normal procedures that apply when you experience pay compression.

Management positions usually earn more because they have more leverage on the success of the operation. It is the responsibility of the senior executive team to make sure that no one is raised to a position of power without the necessary minimum skills, competencies, experience and knowledge to exercise management authorities. Anyone with those credentials (sometimes called "human capital" or KSAs) will expect a certain amount of pay to take on that job responsibility, and it will generally be a higher rate than the normal wage or salary of their subordinates; but not always. 

Sure, the typical visitor to the Compensation Café knows all this, but much of the rest of the world does not understand this basic tradecraft principle.  The next time someone hits you with a challenge on the topic, send them this link.  By that time, we may have a bunch of comments covering the elements I omitted.  It’s a lot easier to have a reference on hand than trying to remember all the points you need to cover for a comprehensive explanation.

E. James (Jim) Brennan, former Senior Associate of pay surveyor ERI, recently returned to consulting. Author of the Performance Management Workbook and veteran expert witness in executive compensation trials, Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Who Are We Kidding?

If I asked you how to improve your company's EBITDA, would you be able to answer? Or if an employee asked you to explain why EBITDA is a sound measure of company progress, could you explain? Could you draw a line from an employee's decision about how to use his/her time on Monday to the health of your company's EBITDA?

Let's say you answer, "Yes," to all these questions, can you tell me how you feel about your company's EBITDA results last year? Are your proud, disappointed, wary?

I have no doubt that EBITDA is the right target measure for most companies to hang all or part of incentive plan funding on. Experienced financial advisors turn to it repeatedly. But is it a motivator? Will it cause the manager in shipping to make an effort to improve delivery times so this year's incentive plan is funded?

Most companies who use it in incentive plan design haul it out to employees once a year, and only once a year. Human Resources spells the acronym out in a PowerPoint presentation so no one can get mixed up -- earnings before interest, taxes, depreciation and amortization -- then everyone goes back to their desks, none the wiser.

I'm only bringing this up because over my career I have seen no company do any better with EBITDA -- or want to, when the question is posed. No one's ever tried to help employees picture a line of sight or go into any detail about why, given how the stock's been doing and the new product launch and, and, and, EBITDA is the best way for us to track our progress because . . .

Basically, the message always comes down to, "trust me," we need more earnings before interest, taxes, depreciation and amortization. Actually, if we even said that, it would be much clearer to the employee that what we usually cook up in incentive communications.

Can EBITDA be a motivator? I bet it can. We offer truckloads of advice on Compensation Cafe about how to design and implement an effective incentive plan, so there are lots of ways we can and should do things better. But this has to be one more example.

If we make all this fuss in incentive plans about whether the plan will be funded, and how much it will be funded, and then we create a version of smoke and mirrors with "EBITDA," what do you think that does to the rest of the incentive plan? It undermines its credibility and power as a motivator.

If you don't want people to think of their incentive as an annuity, think about this. Your goal doesn't need to be getting employees to understand Finance -- but it should be getting employees to feel that their incentive is an inducement to work more effectively. What in the world should they make of EBITDA? If it's so important, we should all understand a lot more about it by now.

Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret is a Board member of the Bay Area Compensation Association (BACA). She coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.

Getting Crowdsourced Pay Right

Crowdsourced compensation is one of those terms that can send people running in the other direction, or at least just look at you with a smirk. The immediate image in most peoples’ heads is of a company run amok, employees having free rein over payroll decisions, perhaps even an unsustainable utopia of giant paychecks for all.

It’s easy to overlook the benefits of crowdsourced pay with such vivid imagery. Fortunately, the reality of crowdsourcing is far less extreme. Typically, a relatively small portion of the overall payroll budget is devoted to crowdsourced methods, like social recognition.

The efficiency and success of such programs comes from the ability of all employees to spread out that investment, both across people and across time, which collectively yields greater impact than if used in a more traditional, lump-sum manner.

Instead of a year-end, top-down bonus, that same amount of money can be spread throughout the year from the bottom-up. The cadence helps to ensure a more even source of motivational energy and social connection. Such methods are also more inclusive, spreading a wider net of energy across employees.

To realize these benefits, it is important to get a few key psychological dynamics right. For crowdsourced pay to be maximally effective, there needs to be the right balance between psychological safety and a sense of autonomy.

Psychological safety is important because employees have been empowered to decide to whom, where and when to distribute the social recognition investment made by the organization. Without a sense of safety, it is all too easy to fear making the “wrong” decision or receiving backlash for a particular nomination or type of award.

While manager approvals and program guidelines are available to keep spending in check, a lack of perceived safety can still prevent a robust culture of recognition from forming. Having an “award advisor” or other communications can help provide a sense of safety by demonstrating the expected norms or providing examples of what others have done.

Safety is only half of the equation, though. Equally important, employees need to feel a sense of autonomy. Too much structure and employees will not feel empowered to select the appropriate level or type of recognition, again stalling the positive effects that the program could have.

The power of crowdsourced pay comes from employees who see the contributions of their colleagues and feel empowered to select the right award that equals the impact of the contribution. That sense of empowerment further contributes to positive cycles of engagement.

Balancing safety and autonomy is familiar to many parents, but applies equally as well to HR professionals seeking to get the most benefit from their social recognition programs and transition more of their compensation investments to crowdsourced methods.

Does your organization provide the right amounts of safety and autonomy with its programs?

As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Price is Only an Issue in the Absence of Value

The title of this article is not something I invented. But, the smart person who first said it seems to be lost to history, so I am borrowing it. But, that’s not the point.

As compensation professionals, we worry an awful lot about prices. Value is something we often put on a back burner while trying to build a better benchmark. The secret that the best businesses and salespeople know is that pricing loses its power when the value is properly understood.

It’s such a simple premise that it can be hard to believe fully. But, study after study confirm this simple fact. When something has value to a person, the price they put on it is higher.

Are your employees leaving for an additional $0.25 an hour? I recently spoke to someone who told me just that. While pay for these roles must be evaluated and possibly corrected, there is something deeper serving as the cause of this issue. The company knows it. The individual knows it. But neither have been able to put their finger on it. Identifying, defining, and building the perception of value is not always easy.

First, you must be able to create the feeling of value from the perspective of the individual. It doesn’t matter one bit whether you see value in the offer. You probably helped determine the details, so you probably see some value.

You need to understand what is valuable to the individual. Don’t guess. Don’t assume. Don’t tell them. Ask them.  Listen and confirm. Then get to work building or communicating that value to the individual. Don’t do this as some defensive counter-offer to someone who has said they are considering leaving. Be proactive.

Work on learning what people in the problem area find valuable about their jobs and in life. Work on showing them how your solution builds on that value. Show them new ways to find value in what they do. If you can effectively do these things, you may find that minor pay differences are no longer an issue.

I can already hear some of the negative Nellie’s saying that this is too simple and it won’t work for everyone. You are right! It won’t work for everyone, but it will work for a bunch of someones. This is a purpose-built approach to dealing with people who are “leaving for better money.”

Think about it this way. Diamonds are made exclusively from one of the most abundant elements in the universe. They are incredibly expensive for something so abundant. But, they have great value to people purchasing and receiving them. They have come to represent something of significance between two people. They represent commitment. They represent the fact that you are doing well enough in life to own that shiny bauble. But, make no mistake, they are expensive!

The value they deliver exceeds the price required to obtain them. Spend the next two months figuring out what your people value and how your company can deliver it. If you do it well, you will find that prices are only an issue in the absence of value.

Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture and considered a leading expert on equity compensation issues. Dan has written several industry resources including a recent Performance-Based Equity Compensation issue brief. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”, “Equity Alternatives” and other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation.

Yes, No or Maybe?

Are you satisfied with the way your organization's performance appraisal process is working?

Yes, no, or maybe?

One of the most debated issues among Human Resource professionals for the past several years has been arguments regarding effective performance appraisal processes.  Everyone seems to have their oar in the water, anxious to join the debate about what works and what doesn't.

In one corner you have the performance management crowd who want to divorce pay increases from the performance appraisal process. They prefer to focus attention on performance improvements and career counseling - issues that tend to have a longer-term focus. Looking forward, not backward.  The subject of pay determination (the increase) would come later, during some vaguely defined subsequent conversation.

In another corner, you have the so-called traditional practitioners, those who tie rewards directly to the work effort and in so doing combine performance/reward determination and career counseling steps into a single conversation.  Desired performance improvements and the where-are-we-going? discussion become the epilog, not the main topic.

Finally, you have the seldom reported employee perspective, those who have delivered the performance and await management's assessment and reward determination.  They expect to see a direct connection between their efforts and a subsequent reward.

What's Wrong?

Part of the reason for such debate between opposing viewpoints is that performance appraisal systems are flawed; it's commonly recognized that they're the object of numerous well-deserved criticisms.

• Managers do a poor job of it:  Whether it's lack of training, lack of interest or simply an attitude of "I've got more important issues to deal with," the result is often rushed, poorly thought through and . . . sloppy.
• Favored son (or daughter) treatment: The "I like you" or opposite syndrome, regardless of performance.  Fair treatment can be a casualty if appraisals are too subjective.  Refer again to the training issue.
• Job responsibilities not clarified: When the manager expects performance "A" and the employee thinks "B" is called for, while the outdated description shows a muddled "C" - what follows is going to be an awkward conversation.
• Forms gone wild:  Human Resources and systems people always tinkering with forms, creating ever longer, more complicated processes.  The usual result is a manager's passive resistance and poorly handled assessments.
• The focal date review:  "Let's do these things all at once."  Procedures that mass produce performance appraisal forms and meetings usually result in a loss of quality - and credibility for the process.  Pity the manager who has ten of these to work on at the same time.

What's Good?

The process of performance appraisal has been around since the first manager - subordinate conversation, and that learning curve of experience has highlighted a number of advantages:

• How else are you going to tell an employee how they're doing?
• If your compensation strategy is to have a pay-for-performance program, you'll need performance appraisal to assess the employee's contribution, and to somehow assign a corresponding reward -- to pay . . for. . performance.
• Employees expect a connection between performance and pay.  That's what they're listening for during the performance discussion.
• It makes sense to periodically review performance/pay levels, to eliminate the need for employees to stress over when to ask for a raise.

Practical Realities

During any performance appraisal discussion, the employee's first question is likely going to be, "how much is my raise?"  If you're not prepared to discuss that, even mentioning your "recommendation," you're in trouble.  Because employees tend to pay closer attention to career counseling and next steps after the raise for past performance has been resolved.

When an employee expects a performance appraisal discussion to include a reference (at least) to a likely pay raise, and you don't cover that topic, the meeting will go rapidly downhill from there.

• They won't be hearing your thoughts for the future, as they've stopped listening.  You're not talking about what they want to hear.
• Frustration and lost engagement are going to seep into body language, tone and perhaps even conversation, with the recognition that pay-for-performance is somehow not viewed as a primary concern by management (you).
• To make the assessment process work employees need to be engaged in the conversation.  Otherwise what you're left with is delivering a boring lecture to a half-interested party who only hears blah-blah-blah.

My Two Cents

Personally, I recommend connecting performance to rewards, because performance rewarded is performance repeated.

I like to acknowledge the elephant in the room, that employees want and expect that their performance appraisal meeting will cover reward determination as a key component, even if senior management approval remains pending.

I don't like to artificially separate performance from reward as if somehow the two aren't connected.  The employee considers it a solid, direct line connection.

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, "Money Question," by Ano Lobb

Cafe Classic: How to Be Both Transparent and Secretive at the Same Time

Editor's Note:  In the Classic post, we toast (roast?) those organizations who manage to pull off a kind of perfect schizophrenia in their approach to pay communication.

Don't think it's possible?  I'm here to tell you that it's easier than it seems.  In fact, I am struck by the number of companies that manage to pull it off.

How can  you be both transparent and secretive at the same time?  Let me share a few examples.

You can distribute well-crafted, multi-colored and detailed total compensation statements that include such helpful information as an employee's pay grade, salary range and current compa-ratio.  This at the same time that you are maintaining a completely opaque, black box of a job evaluation approach that combines peeking at market data with some type of jerry-rigged point factor system, the administration of which cannot be easily explained or defended because it is half voodoo.  So, while employees can know their salary ranges, neither HR or their manager can tell them the rationale by which they were placed in their current pay grade in the first place.

You can hold regular employee shop talks, where you share information on the company's business outlook, even provide high level financial and operating data, encouraging employees to partner with leaders in making the company successful.  This while holding all employee bonus plan decisions close to the vest, claiming that awards are based on performance, but never committing to any specific set of metrics or formula, preferring instead to make a discretionary last-minute call at year-end, so that employees are never sure what to expect until the check - if there is a check - is distributed.

You can even be so boldly open as to publish every employee salary, all of them for anyone to see, while also granting sporadic, significant salary adjustments to individuals based on a process and criteria that are never talked about and so appear to be completely arbitrary and capricious.

Even in the most open and transparent environments, there are things (particularly in the realm of compensation) that should be kept private.  On the other hand, we need to be mindful of our apparent tendency to compartmentalize transparency.  Employees can connect the dots, even if we can't, and we run the risk that our practices of secrecy in one area will undermine our efforts to be transparent in all others.  The net effect may be that employees become hesitant to trust any of the information we share.

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and 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. 

Image courtesy of flipkey.com

Fanning the Pay Gap Flames with Artificial Intelligence and Alternative Facts

There's a new AI ChatBot that promises to help women "ask for and get the raise you deserve."

CindyBot is here to get you your money, plain and simple, by arming you with salary information and helping you develop a negotiating strategy.

This latest weapon in the war against the gender pay gap is an AI version of Cindy Gallop, the British advertising consultant who, according to Mashable, "swears like a sailor and is a pro at dishing out career advice, especially for women." 

Your consultation with the AI begins with an introduction from CindyBot:

"Let me start by saying that talking about your salary may feel awkward. Jam those feelings down the nearest garbage disposal. You ready to get the money you deserve?"

From there, CindyBot asks you about your job title, how long you've been in that position, and your employer's zip code. She returns the average salary for someone in your role and location (I'm assuming this salary information comes from PayScale, one of the partner organizations behind CindyBot's creation). According to some users, this average salary information is quickly followed by a memorable quote from CindyBot:

It's good to know the facts, but it's better to make a sh*t ton of money.

(Side note: when I tried CindyBot, she provided we with an average salary for my position and stated "But that doesn't matter does it? Because you aren't average.")

CindyBot gets you ready to make a sh*t ton of money by helping you prepare a negotiation strategy. She asks questions like "how are you exceeding expectations?" and reduces your negotiation strategy into bullet points. She then encourages you to go and demand more money either by asking yourself WWASWGD (what would a straight white guy do?) or by visualizing what Gallop herself would do: "prepare, present my reasons, get paid. A lot." 

I had a visceral response to CindyBot when it was released on April 4th (a.k.a. Equal Pay Day) this year, and I've been trying to process and organize my thoughts about CindyBot for the last two months. A post on entitlement from my Cafe colleague Jim Brennan helped me to clarify my thinking and come to the following conclusion: I don't like CindyBot, and she may be doing more harm than good.

I can overlook the Bot's (confident? hardline?) personality, the use of four-letter words, and perhaps even the WWASWGD philosophy; for others, this may be a deal-breaker. What I can't overlook is the sense of entitlement CindyBot could be breeding and the alternative facts users may be creating for themselves because of their interactions with her.

Right from the start, CindyBot's introductory question "you ready to get the money you deserve?" sets a tone of entitlement. This tone permeates the user's interactions with CindyBot. For example, she asks the user how she is exceeding expectations. This is certainly a valid question to consider when contemplating and preparing for a conversation about a raise. However, CindyBot can't provide meaningful insight into the user's response. Instead, she simply assumes the user is exceeding expectations in a meaningful way.

Whether the user responds with "I've grown revenue from existing clients by 15%, well above my target of 3% growth" or "I always replace the water cooler bottle when I take the last of the water" CindyBot always comes back with the participation trophy of performance conversations: "That's great. You're a boss." There is no ability to differentiate, so everyone wins and everyone's a boss.

In real life, not everyone is a boss. Not everyone is above average (this would violate the laws of mathematics). Not everyone is underpaid. And even if you are underpaid, compared to the average, you cannot automatically assume it's because of gender discrimination.

Thinking in this way can lead us to create alternative facts about ourselves and our performance. Believing you're exceptional and entitled to a raise when you're not can distort our understanding of the gender pay gap and our relationship to it. Consider the following quote from a Refinery29 article about CindyBot:

"The British advertising consultant and entrepreneur has launched a chatbot that will help you ask for and get the raise you deserve. Because as we all know, women are still making 80 cents to a man's dollar and no amount of variables such as experience or child-rearing makes up for the fact that many industries simply choose to pay women less because they can."

As an economist who has studied gender pay gaps professionally since 1999, I can tell you that gender discrimination is real and it does occur. I can also tell you that there is an abundance of empirical evidence indicating that relevant work experience, periods of absence from the labor force, tradeoffs between cash compensation and benefits, etc., have an impact on worker pay. Assuming a woman isn't getting the money she deserves simply because she is a woman is just as unfair as paying a woman less than a similarly situated man simply because she is a woman.

The problem I see is CindyBot itself, not Cindy Gallop or the many individuals working to educate women about how to assess their pay vis-a-vis comparator employees and cultivate their negotiating skills. When asked about why she created CindyBot, Gallop said that it "enables me to scale myself, and help every single woman I can to get the pay raise she deserves." Her motivation is noble, and I'm sure the help she provides to women in-person is invaluable. The breakdown happens in the scaling; CindyBot is not capable of providing recommendations based on a raw, real assessment of an individual user's situation.

This raw, real assessment, which sometimes involves telling people they're not exceptional and not entitled to a raise, is the only way to solve the gender pay gap.

Stephanie Thomas, Ph.D., is a Lecturer in the Department of Economics at Cornell University. She teaches undergraduate and graduate courses on economic theory and labor economics in the College of Arts and Sciences and in Cornell’s School of Industrial and Labor Relations. Throughout her career, Stephanie has completed research on a variety of topics including wage determination, pay gaps and inequality, and performance-based compensation systems. She frequently provides expert commentary in media outlets such as The New York Times, CBC, and NPR, and has published papers in a variety of journals.

Clearing Away the Cobwebs

Somehow it felt like time to hit the reset button, so I went looking for inspiration. I came up with two new WorldatWork videos (embedded below). They helped me clear away some cobwebs. I thought I'd point them out to you in case you're in a reset mode, too.

The first one, "The Modernization of Total Rewards: What's Changed and What's Coming," should inspire conversations in your department. It's not your usual, "Align your talent, reward and business initiatives," sort of discussion. Instead, it encourages us to shine a light on our practices to become aware of the cobwebs and dust bunnies have that been accumulating while we have been working away diligently over the years.

Think back. During the Recession, we were just hanging on for our lives, so overall strategy couldn't be a priority. When things finally started to improve around 2014, we were really tired, so repetitive work was right up our alley. Since then we've been looking closely at details, trying to plug the holes that had been created by the Recession.

In the meantime, the work world has changed immensely in terms of regulatory policies, economics, workforce priorities, data analytics, productivity through technology and so on. At some point, instead of living with the clutter from the old systems, we need to take the time to clean out the metaphorical closets. Extreme Clutter may have been a TV program that focused on icky realities, but think about how often people in situations like that say, "We just don't know how it got this way." I'm just sayin' . . .

I think you'll change your perspective in the six minutes that it takes to watch this video. Then pass it around and talk it over with your colleagues. You just might find yourself looking for flashlights and the buckets in the next few weeks.

The Modernization of Total Rewards: What's Changed and What's Coming from WorldatWork on Vimeo.

I'm passing the second video along because, in my experience, it's the first time that WorldatWork has highlighted the value of behavioral psychology/economics for our compensation practices. Over the years, Compensation Cafe writers have pointed out that a lot of money is spent wastefully in compensation on the premise that the pay-for-performance concept simply and automatically drives employee performance. However, there are acres of behavioral research showing that it isn't nearly that straightforward -- and that many of the "classic" motivational philosophies inspiring compensation design are just plain wrong. 

This video, "Using Behavioral Science to Improve Total Rewards Effectiveness at the NSA," is best seen as a case study of an organization that is dedicated to making its practices as effective as possible.  " . . . virtually anything we do in Total Rewards arena ultimately has some sort of an impact from a behavioral perspective on our employees . . ." comments Chris Dobyns of the NSA (and frequent Cafe guest contributor). In the wider world think merit pay, incentives, equity awards, sales compensation, wellness, medical cost management, training and you've only touched on the most obvious examples.

The video doesn't have answers. Instead, you're watching and learning from practitioners who are committed to upgrading the NSA's practices. It's courageous of the speakers to be talking about their work in progress, and instructional.

Using Behavioral Science to Improve Total Rewards Effectiveness at the NSA from WorldatWork on Vimeo.

Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. Margaret is a Board member of the Bay Area Compensation Association (BACA). She coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.