It's almost August. A handy time for calendar-year compensation programs to take stock before the initial swell of the end-of-year tsunami arrives in September.
In the last eight years, toward the end of the summer, I usually write about setting time aside to assess the effectiveness of your practices and plan improvements for next year. After all, just last week, Chris Dobyns made a compelling case for program evaluation. He wrote, ". . . as we all know, things can (and do) go wrong less right with any program or intervention and maybe more so with programs in the human capital realm."
Compensation practices often look like perfect exercises on paper, but in reality there are a wide array of actual practices once managers and employees get involved. As Chris' article points out, HR systems, " . . . can follow a precisely prescribed design and process, and still fail to achieve desired outcomes."
Face it, that observation fits like a glove when it comes to your pay-for-performance cycle. Yet few organizations take the time to analyze and brainstorm to any degree before they start to plan for the next year, even though pay and performance are such critical business performance factors.
"Nothing is ever found by not looking," Chris points out. Here are a few of the places to look when it comes to your pay-for-performance practices.
First, the fun stuff. One of my annual suggestions is to invite the head of compensation from another company out for lunch. We are far too busy to see beyond the room of cubicles we currently inhabit. It's not our fault -- that is until we're reminded that we can do better.
So why not have some fun while you're searching for new best practices? Don't know other heads of compensation? Pick a company and send an email. Odds are you'll hear back and the answer will be yes, even if you don't know the colleague. Then, over lunch, take the time to share what's been going on in HR especially in merit practices. You'll both leave with one or two new insights or ideas that can improve your current practices.
Then, check your assumptions. You know WHAT you do for pay for performance, but do you know WHY? You can't be consistent and systematic in your practices unless you can name the principles they embody and the behaviors they should inspire. Take a few hours to noodle through and name the fundamental beliefs that seem to lead to the behaviors you're asking of your leaders and managers. Use these as the criteria to weigh how well-aligned each of the current pay-for-performance practices are with your company's principles and culture.
Never been able or willing to develop a compensation philosophy? Get through the process described above, and voila -- you have a first draft of a compensation philosophy that will guide your program evaluation.
Next up, more DIY pay-for-performance program evaluation and planning suggestions. Check out the upcoming Part 2 of "Now's the Best Time for Pay for Performance."
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 coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.
Connect through Linked-In as well, it is a great resource for meeting other professionals. Also don't be afraid to reach out to head of HR in your industry, they can also provide a valuable insight into what is working/not/working/on the horizon that may impact compensation practices. Who knows you may end up starting your own local meet up?
Posted by: Katherine Macrone | 07/31/2018 at 06:27 AM
Yep, Katherine, LinkedIn is the best place to start your contacts. It's great to hear your energy around the idea. Lets try to spread it!
Posted by: Margaret O'Hanlon | 07/31/2018 at 10:47 AM