Compensation Cafe

Cafe Classic: There's Knowledge . . . and Then There's Wisdom

Editor's Note: Jacque Vilet shares some Classic points - grounded in a memorable true story - about the lessons that experience and "time in the trenches" teaches us.  Let us not overlook the opportunity to value, draw upon and share this knowledge.

Here's a story that's been around a long time.

Charles Steinmetz was a brilliant engineer.  One of his close friends was Henry Ford.

One day a generator at one of Henry Ford's plants broke down and production came to a halt.  Ford brought in mechanics to fix the problem but no one could figure out what was wrong.  Reading through a trouble-shooting guide didn't help.   Finally he contacted Steinmetz --- his friend, the great genius.

Steinmetz came to the plant and tinkered around awhile checking out all the generators. Then he took a piece of chalk out of his pocket and made an "X" mark on one particular spot of one particular generator. To their amazement the mechanics disassembled that part of the machine and discovered that it was the exact location of the breakdown.

A few days later Ford got a bill from Steinmetz for $10,000. He couldn't believe it so he sent it back and asked Steinmetz to please itemize it. He did and a few days later Ford received a second bill ..itemized.

 For making an “X” mark on the generator = $1

For knowing where to make the "X" mark on the generator =  $9,999

Henry Ford paid the bill.                                                           

Charles Steinmetz knew where to tinker when nobody else did and that made all the difference.  The “fix” wasn’t about technical manuals or databases.  It came from the wisdom gained through trial and error ---- from experience.  

How can we apply this to compensation?  Well, think about yourself when you first started out as a Compensation professional.   You had your college degree with all the courses you took and all the books you read.   Wow!  You were really something!  You were ready to tackle the world’s toughest compensation problems.  Bring ‘em on!

How long did it take you to realize that some problems/situations couldn’t be “fixed” by the books?  That your solutions were tempered somewhat by company culture, strategy, priorities, management “quirks” . . . and, might I add, common business sense?   That policies were great but sometimes there had to be exceptions?  That data was only as good as its interpretation? That the more experience you gained the less you relied on books?
  
Took a while didn’t it?   

I remember in my early compensation days having a “lively discussion” with an Engineering VP that didn’t want to follow the merit matrix guidelines.  His argument was that he didn’t want to penalize his top performers by giving them a small increase just because they were paid near the top of the “hypothetical” salary range.  It didn’t make sense to him to potentially cause problems when/if these top performers discovered they were getting less than some of the average employees who were lower in the range.   

Some of you may disagree but the more he explained what he wanted to do the more it made sense.   I finally agreed with him that the most important things were: 1) staying within the overall budget figure, 2) not discriminating against any of the protected classes and 3) truly differentiating the pay increases between his key talent and the rest of the employees. 

So, yeah, I bent the rules.   And I’d do it again.

OK so what?  There are a lot of very experienced Compensation practitioners today.  No doubt many will be retiring in the next few years.  In the interest of keeping “key learnings” alive ---- why not commit to taking a “newbie” under your wing and being his/her mentor?  S/he will still stumble and make some mistakes. But there will probably be fewer than you racked up in your early days.
        
Besides don’t you think us battle-scarred wizards owe it to the profession to watch out for our own people?

Jacque Vilet, President of Vilet International, has over 20 years’ experience in Global Human Resources with major multinationals such as Intel, Texas Instruments and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expatriate twice during her career. Jacque has the following certifications: CCP, GPHR, HCS and SWP as well as a B.S. and M.S in Psychology plus an MBA. She belongs to SHRM, Human Capital Institute and World at Work. Jacque has been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications.

*Quote in picture credited to Miles Kington"

Solid Reasons to Start Communication Planning in August

If your compensation system works on a calendar year, you're going to be asked to start a compensation communication plan in September.

If you are going to make sure your compensation and performance management programs are procedurally fair, you've got research, analysis and strategy development to complete. My recent blog encouraged setting this goal for your program. It also identifies three dimensions of your practices that have the greatest impact on perceptions of fairness; these should guide your work. Odds are, your own opinion on where things stand on each of the three will not be enough, so you'll want to have conversations with select managers, at least. If you start on this data gathering in August, you'll have enough time to really analyze the status quo and plan improvements before September due dates.

People tend to be a little looser on themselves and their schedule in August. Your meetings with managers will tend to be more open and candid than if you wait until the jam-packed last quarter -- especially if you can take the managers to lunch. Managers are more likely to support employee focus groups when they are in an August frame of mind, as well.

You won't have to pretend that all managers and employees need the same information and training (even though you know that it is not accurate). Some managers, some divisions, some employee groups, some demographic categories, need more communications efforts because they: (pick one) 1) Haven't allocated the time in the past to do things right; 2) don't want to differentiate between employees; 3) want to spend their whole budget on "star players"; 4) don't train managers to think and talk effectively with employees about compensation and performance management; 5) don't try to be transparent with employees; and so on.

It's time to have a modular communications plan that can be customized to a manager's needs. Core modules on basics, plus separate units addressing weaknesses is a good place to start. Online resources and personal coaching are additional, essential methodologies that can be mixed and matched with the training modules to deliver personalized communication strategies for managers.

Since it's early in the game, you will probably have to pretend that you know the budget that you'll be given, but with a bit of detective work you'll be able to make a good guesstimate. Plus, if you create a cost estimate on your own in August, it can be reviewed with your leadership before they discuss budgets in September, giving you a foot in the door to get the bucks that you need and want.

Last but not least, you'll give yourself the time to think through how to make your work measurable. Think how much more confident you'll feel in front of your executives if you are able to give them results in January that show how much better you did this year on manager skill development and employees' views of fairness than last year.

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. A former Board member for the Bay Area Compensation Association (BACA), 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.

Cafe Classic: Solving Real World Pay Problems with Motivational Theory (Yes We Can)

Editor's Note:  Theories comes in handy sometimes, even in the real world and with real people problems. Classic truth this. Make sure you have one or two in your everyday toolbox.  

Theory can come in handy for our day-to-day compensation work.  This is particularly true when we find ourselves dealing with situations beyond the reach of our usual tools and where we can't benchmark our way out of trouble.

I was reminded of this recently in addressing compensation concerns surrounding a unique role in a unique organization, the kind of situation where external data driven guidance was not available and not really appropriate.  There was, however, a motivational theory we could draw upon to guide our examination of the problem and our development of a solution:  Adam's Equity Theory.

Most of you are probably familiar with Adam's Equity Theory, even if the name itself doesn't ring any bells.  Named for John Stacey Adams, a workplace and behavioral psychologist, equity theory asserts that employees seek to maintain equity in the workplace between the inputs they bring to a job and the outcomes they receive from it.  The theory holds that individuals who perceive themselves as either under-rewarded or over-rewarded will experience distress and that this distress will prompt efforts to restore equity in the relationship with their employer.

Certainly we are all familiar with employees who, correctly or not, believe they are underpaid and who approach their managers and/or Human Resources in an attempt to rectify the perceived imbalance.  Alternatively, employees perceiving their rewards to be out of balance with their contributions but who are unwilling to confront management about their pay may seek to restore equity to the relationship by quietly reducing their outcomes.  More than a few of you have likely encountered this scenario as well.

In the real-life situation I described at the beginning of the post, all parties acknowledged that there quite likely was an imbalance in the ratio of inputs to outcomes for the affected employee, but for reasons I won't take the time to detail there was no possibility of increasing individual cash compensation (at least in the short term).  And so we used equity theory, along with a broad definition of what might constitute inputs and outcomes, to search for a solution to the distress the employee was experiencing.  On the inputs side, we explored whether some of her assignments or accountabilities could be shifted over to someone else as a means of lightening the burden.  On the outcome side, we discussed things beyond cash that we could add to the package to address the imbalance including paid time off and development opportunities.

Bottom line, Adam's Equity Theory provided us with structure and language to understand, discuss and - ultimately - start identifying potential solutions to an unusual reward dilemma.

How many of you have found practical help for a real-life conundrum in this or some other motivational theory?

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration 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 "Balance" by tourist_on_earth

Cafe Classic: Solving Real World Pay Problems with Motivational Theory (Yes We Can)

Editor's Note:  Theories comes in handy sometimes, even in the real world and with real people problems. Classic truth this. Make sure you have one or two in your everyday toolbox.  

Theory can come in handy for our day-to-day compensation work.  This is particularly true when we find ourselves dealing with situations beyond the reach of our usual tools and where we can't benchmark our way out of trouble.

I was reminded of this recently in addressing compensation concerns surrounding a unique role in a unique organization, the kind of situation where external data driven guidance was not available and not really appropriate.  There was, however, a motivational theory we could draw upon to guide our examination of the problem and our development of a solution:  Adam's Equity Theory.

Most of you are probably familiar with Adam's Equity Theory, even if the name itself doesn't ring any bells.  Named for John Stacey Adams, a workplace and behavioral psychologist, equity theory asserts that employees seek to maintain equity in the workplace between the inputs they bring to a job and the outcomes they receive from it.  The theory holds that individuals who perceive themselves as either under-rewarded or over-rewarded will experience distress and that this distress will prompt efforts to restore equity in the relationship with their employer.

Certainly we are all familiar with employees who, correctly or not, believe they are underpaid and who approach their managers and/or Human Resources in an attempt to rectify the perceived imbalance.  Alternatively, employees perceiving their rewards to be out of balance with their contributions but who are unwilling to confront management about their pay may seek to restore equity to the relationship by quietly reducing their outcomes.  More than a few of you have likely encountered this scenario as well.

In the real-life situation I described at the beginning of the post, all parties acknowledged that there quite likely was an imbalance in the ratio of inputs to outcomes for the affected employee, but for reasons I won't take the time to detail there was no possibility of increasing individual cash compensation (at least in the short term).  And so we used equity theory, along with a broad definition of what might constitute inputs and outcomes, to search for a solution to the distress the employee was experiencing.  On the inputs side, we explored whether some of her assignments or accountabilities could be shifted over to someone else as a means of lightening the burden.  On the outcome side, we discussed things beyond cash that we could add to the package to address the imbalance including paid time off and development opportunities.

Bottom line, Adam's Equity Theory provided us with structure and language to understand, discuss and - ultimately - start identifying potential solutions to an unusual reward dilemma.

How many of you have found practical help for a real-life conundrum in this or some other motivational theory?

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration 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 "Balance" by tourist_on_earth

5 Reasons We Can’t Fix Executive Compensation

Executive compensation, especially at larger companies, continues to soar ever upward. Headlines in local newspapers and websites around the US are reporting record years, once again. While there are valid arguments for many huge CEO pay packages, there are at least as many that defy explanation. Why can’t we get our arms around this issue?

1. No one wants to admit they have below-average executives. Boards don’t want to tell shareholders that the goal is to have an executive team designed to perform below the middle of the market. Shareholders don’t want to invest in a company with a below-average executive team. Executives don’t want to be told (or admit) that they are “less than.”
2. Shame is not an effective deterrent. Our country is currently built on crowing about how much money you have. People at the top know that there is always someone who makes more. Many middle and lower-level employees celebrate and aspire to be like the high paid executives at their employer.
3. We have allowed a system to be built that cannot be sustained. In the early 1990s, executive pay began its rapid movement from cash and perquisites to a heavy dose of equity. In many industries equity was poured over every employee with the goal being a singularly aligned workforce. As executive pay has increased it has eaten more and more of the available equity (shareholders frown on 100% dilution). This means there is less and less available for the rank and file. More importantly, equity (while amazing) is a limited commodity. The current growth cannot be sustained without shareholders accepting significantly more dilution AND employee getting far less equity. My guess is that the current approach has 5-10 more years before it begins to cannibalize executive pay.
4. Executives are increasingly portable. Not so long ago most executives stayed in one industry and often at one or two companies for their entire career. The lack of movement worked to inhibit outsized pay increases. It also served to slow the need for expensive outside hires to replace the people who left. This is just like free agency wildly increased the pay of athletes. This will not, and should not, go away, but its impact cannot be underestimated.
5. The stock market has been redesigned to grow for longer periods and fall for shorter, albeit more dramatic, periods. This means that stock-based compensation grows more aggressively and more predictably than it did twenty or forty years ago. When crashes occur the reset period is short and the low prices provide for stacking even more equity onto the pile.

So, what should we do? All of our prior efforts have been the equivalent of pouring gasoline on a fire. Perhaps it is time to reassess whether the “scorecard” of executive pay disclosure is doing more than simply providing the foundation for next year’s big increases. Maybe a little less data will result in a little more control. I’d love the hear the thoughts of compensation professionals, whether or not they are focused on executive pay.

Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He works as Managing Consultant for FutureSense. He is passionately committed to aligning pay with company strategy and culture. Dan is also a leading expert on equity compensation issues and has written several industry resources including the one-of-a-kind Performance-Based Equity Compensation. 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 @DanFutureSense.

Cafe Classic: Don't Blame Incentives

Editor's Note: Incentives are a tool.  When we mis-apply them and the consequences are not good, the blame typically lies somewhere else - and not with the tool.  Jim Brennan expounds...

Incentives are not the cause of bad reinforcement programs, any more than forests should be blamed for the existence of warfare.  Some opponents of incentives show the same thinking that would condemn trees because they may be shaped into spears, arrows and catapults instead of being turned into sturdy houses or inspiring artworks.  A hammer can be used to build or to destroy.  The instrument is not at fault if the application is misused.  Then, it’s not the material but the defective treatment that should be criticized. 

Lessons about the potential abuse of essentially neutral elements also apply to total reward situations.  Because incentives are powerful, they should be designed and implemented with great care.  People react to the significant consequences they perceive resulting from certain courses of action.  Here is a story about perverse incentives that makes the point much better than a lot of pontificating. 

The comp consultant finished his presentation about the new merit pay system to be implemented at the police force, where the performance of patrol officers would be evaluated against (among other variables) the accident rate in their assigned sector.  The Chief stepped up to field questions, nodding to a grizzled veteran with his hand raised.

“Uh, Chief, so this means if the accident rate in Area 5 declines, I get a higher merit score that affects my pay raise?”  The Chief just nodded.  “Well, then, Chief, we just got to add a stop sign at the intersection of White Road and Route 14.  I’ve covered that sector for years and it seems like I have to call out the meat wagon for collisions there every week.”

The Chief frowned.  “Officer, after all the years you spent in that sector, why haven’t you ever made that request before?”  The patrol officer smiled genially.  “It was a hell of a good place to write tickets.”

What workers take from an incentive program may not be what was intended, so don’t be shortsighted when planning reward systems. Think beyond the horror stories to find the true lesson.  Don’t blame the tool when it is badly used.

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience in most industries.  After corporate HR posts and consulting CEO roles, he was Senior Associate of pay surveyor ERI before returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook), speaker and frequent expert witness in reasonable executive compensation court cases, Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Creative Commons image "Jewellery material 9" by Mauro Cateb

A Useless Analysis?

I don't get it.  Can someone help me understand a bit of compensation reasoning?  Why are some organizations interested in what others are planning to do next year with their midpoints?  I presume that's the case because compensation planning surveys compile and report such data.  But who really cares?  Aside from anecdotal information (presenting multiple data points), I have never understood the importance of this reporting.

To be fair, perhaps my career experience is the exception, as I've never used that data in program analysis, or even reported it.  Or even been asked about it.  But somebody must be using it.  Somebody.

Say what?

I can only guess that I've missed something; maybe I should have taken another WorldatWork class, because the issue has never arisen from any employer I've dealt with, either as an inside Compensation practitioner or as an outside consultant.  Which leads me to wonder, do some companies recommend raising their midpoints based on survey data that projects what other companies might do?  Is that metric as important as what is being paid for positions, or what the average merit spend might be next year?  How does a projected average salary structure movement relate to any company's situation?

Can you envision recommending to senior management that midpoints be raised by X% simply because a survey said that that’s the projected average midpoint increase of other companies?  Surely there should be more to the decision.

For me, the focal point of survey analysis has always been to determine the competitiveness of current pay practices and established midpoints.  In planning for next year we would adjust those midpoints to either remain competitive (midpoints are already there), to improve our standing (midpoints lag the market), or freeze them (midpoints already pegged above-market rates), no matter what a survey reports as projected common practice.  Am I wrong here?  I’ve always thought that my company's salary structure should move in relation to our own competitive positioning, regardless of what anyone else is doing.  Otherwise, we could be making improper adjustments - either too much or too little.

And what about the expense involved?  Contrary to what some pundits have assured me from time to time, midpoint growth can create costs.  There’s no free ride.

• When an employee's base pay drops below salary range minimum at the start of the fiscal year, do you cover that amount - or wait until the next scheduled employee review? The fair thing to do would be to immediately raise the employee to the minimum and then (or later) grant a merit increase on top of that.  There’s your extra cost.
• Higher midpoints push experienced employees further away from the internal "going rate" - creating pressure to restore the balance. Have you ever explained to a long service employee why they weren't being paid at least the midpoint? 

Practitioner Consideration

When are the estimates for these projected midpoint movements made, and how accurate are they?  They're only guesstimates, and many times the survey questionnaire is filled out without due consideration, just to get the form completed and submitted.  After all, most companies won't confirm their new structure commitment until November (senior management signoff), while the structure movement questionnaires are completed in mid-summer.  How good a guess can you make in August?

Btw, a company's salary structure (grades and salary ranges) is usually segmented along the lines of hourly, non-exempt, exempt professional, and management employees.  To gain a clear picture of your competitive marketplace you should consider that each segment is moving at a slightly different rate.  For example, it's likely that management pay is growing at a faster rate than that for hourly employees.   Suggesting that only a single number would reflect what’s happening with your entire population would distort the reality of those multiple markets.

Now I suppose there may well be organizations out there that have changes to their reward programs contractually tied to "market movement" or even structure (midpoint) growth, but do you think there are that many so governed?  And is it a process that helps the organization?

Bottom line, can someone tell me why tracking other organization's guesstimated midpoint movement is a valuable analysis?  I'd really like to know.

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, "Employee," per Southern Methodist U.

Cafe Classic: Chaos Theory

Editor's Note:  Many organizations and leaders resist structure in their pay practices; this is particularly true for smaller, more entrepreneurial businesses and many nonprofits.  Margaret O'Hanlon brings science to bear on this Classic challenge and explains why this ultimately may not serve the organization, its mission or its people well.  Listen up!

To jump on market opportunities, entrepreneurs love to exercise unrestrained initiative that involves risk. To change the world, non-profits encourage bold initiatives meant to unsettle the status quo. Perhaps that's why, in my experience, both start-ups and non-profits are the organizations that most often report that they have neither salary structures nor systematic compensation practices.

By their nature these organizations have a high tolerance for shoot first, aim second. Innovation is the very reason they exist. But when it comes to employee compensation, time is not on their side. In its section on the Chaos Theory, Wikipedia tells us, "Chaotic systems are predictable for a while and then appear to become random." As it turns out, even randomness can be plotted . . . and so can the outcomes of cutting individual pay deals.

In start ups, the initial rush to get going is on the founding employee's side. Ask and, pretty regularly, you receive. The money you're paid is obviously an investment, and the person who is paying it wants to feel like they can make things happen (like an effective entrepreneur).

It makes some sense . . . until it doesn't. Most notably if you are treating your salesforce this way. Nothing angers a real competitor more than when there are different, unspoken rules for different players in the same competition. When your salesforce notices -- that is, when you can no longer afford to keep throwing money at them -- their motivation will waiver just at the time you need them most.

In non-profits, everyone in the organization is aware of the difficulties of staying ahead of financial and operational challenges. "We all need to pitch in" is an organizational value that often takes precedence over attention to pay practices. The thing is, while their employees are strongly devoted to the Mission, they are also accutely attuned to unfairness in the world.

By their nature, both types of organization think it makes good sense to take what they see as bigger risks that leave pay policies in the dust. They are well intentioned but misguided, and it's our job to point it out early and often -- whether or not the CEO has compensation on the agenda. Consistent, strategic pay practices are not simply a recruiting or overhead issue for a small, dynamic organization, they are part of an operating strategy designed to keep the company healthy and focussed. 

As we all know from personal experience, you can buy just about anything but if it's mainly on impulse, chaos can ensue.

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. A former Board member for the Bay Area Compensation Association (BACA), 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.

Quick Reminder on Performance Management Effectiveness

I recently ran into a study on effective performance management practices that I want to share with you. Not because it says anything really new, but because it does a great job on focus and insight, attributes we can all use when it comes to performance management.

The study's conclusion -- procedural fairness is the goal to set for your program.  Procedural fairness is defined as, ". .  . whether employees perceive that central elements of performance management are designed well and function fairly." Procedural fairness because it can be measured, yet so few companies can pull that sword out of the stone right now. Procedural fairness because the concept can be transformed into three primary practices.

Before I share the three factors that stand out as affecting employee perception of procedural fairness, I want to point out that global executives provided this data to McKinsey & Company -- a company that is not typically tied to Human Resource consulting. Why is the company interested now? Because, 'organizations are demanding a lot more from their employees: they expect them to respond quickly to changes in a volatile competitive environment and to "always be on," agile and collaborative.' Sound familiar to you?

The research suggests that a performance management system has a much better chance of being perceived as fair when it does these three things:

1. Transparently links employees' goals to business priorities and maintains a strong element of flexibility in response to business volatility. (A clear line of sight is both a business strategy and a people strategy that gives employees a sense of meaning and purpose.)

2. Invests in the coaching skills of managers to help them become better arbiters of day-to-day fairness. (These italics are mine, chosen to highlight how innovative and focused manager training design could be if it honed in on those skills.)

3. Rewards standout performance for some roles, while effectively managing "converging performance" for most. (They use the term, "converging performance," to point out that the definition of performance is particularly difficult today when, " . . . roles are interdependent, collaboration is critical, and results can't easily be traced to individual performance.")

When it comes to this last, compensation-related item, the report states, "With middle-of-the-pack performers working in collaborative team environments, it's risky for companies to have sizable differences in compensation among team members, because some of them may see this as unfair and unwarranted." This is the best logic I've ever heard on the rationale for this "one size pretty much fits most" pay practice -- to which the McKinsey writers add encouragement for spot bonuses that are calculated as a percent of base pay rather than a negligible amount.

But is there a bottom line? Since McKinsey reports input received from executives, they recommend asking employees, who we all know are more than willing to help you see what they think is fair. McKinsey data shows that a perception of fairness will strongly correlate with a perception of effective performance management.

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. A former Board member for the Bay Area Compensation Association (BACA), 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.

Cafe Classic: What if We Prepared for our Profession Like Medical School Students?

Editor's Note:  What if we (speaking to my fellow non-doctoral colleagues), as part of our preparation for a career in employee rewards, had the chance for a formal learning opportunity on how to read research and assess the relevance of research findings to our day-to-day responsibilities?  Since this post planted the first seeds of interest in the kind of research/practice learning collaboration that we are attempting to initiate with our new Take Five series, I thought it might be a timely moment to feature it as a Classic.  

Don't worry.  I don't mean dissecting cadavers and such.  Rather, I'm talking about arming ourselves with the skills and know-how to not only keep abreast of research and developments in our field but to also identify where there are lessons that can improve how we practice in our profession.

As part of a formal medical school curriculum this term, a family member of mine is participating in what I find to be a very interesting class.  Through a combination of statistics coursework along with regular reading and small group discussion of medical papers and journal articles, she and her coursemates are learning how to assess and interpret the latest research and developments in their field.  Together, under the guidance of their instructor, they work to understand these studies and to determine the relevance of their findings to the day-to-day practice of medicine in their chosen disciplines.

Wouldn't we in compensation - and in other HR disciplines - benefit from this kind of professional preparation?  Few of us who haven't gone the doctoral route are comfortable and confident in our ability to accurately decipher research papers and academic journal articles, to cull out the wheat from the chaff, and extract the "real world" insights that can help us do our jobs better.

With this kind of preparation, we would also be better educated consumers of information.  We would be less susceptible to the mythologies and miracle cures being sold by consultants, academics and business book authors, who claim a solid grounding in "research" that may or may not be valid.

This may be part of the coursework in some M.B.A. or graduate level HR programs, but I know I never received it as part of pursuing my own Master's degree.  I'm not aware, either, of the existence of this kind of preparation in any of our professional certification programs, such as the SPHR or CCP.

Is this a gap that deserves further thought and attention?

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration 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.