Editor's Note: Context matters. Our pay programs are now operating in a world where businesses and work are operating in an enormously different environment and face significantly different demands than even 6 months ago. Understanding this is critical to effective reward management, asJacque Vilet lays out in this Classic post.
Context: Background, environment, framework, setting, or situation surrounding an event or occurrence.
Context has always been important to me. For example, I don’t like digital clocks. I don’t like seeing the exact time without a reference point. I like to see the clock face with all the numbers and the hands. I need context. Guess I’m just an analog girl in a digital world!
It’s the same at work. I always thought there was a strong connection between compensation and organizational design. I couldn’t “do” compensation unless I had organization charts. Today context is so much more than that.
Bear with me. I’m going to tell a story that I hope will make you see a parallel to compensation.
A relative of mine has had to have his entire 30 year old house re-wired. When the electrician looked at it he told him that the wiring was completely up-to-date when initially installed and met the then required code. So what happened in 30 years?
The builders didn't anticipate the information age. How could they know that the house 30 years later would have HDTV, a DVR box, a laptop port, an iPod speaker system, and a smart phone charger all operating at the same time. What worked 30 years ago, doesn’t work now.
It isn’t just wiring. Think about it. In other industries besides construction I think you would agree that very few products, services and business practices/processes are the same today as 30 years ago. And it’s even more complicated today.
Companies are now operating in a very different business landscape than the one they faced even 6-7 years ago --- pre-recession. The major issues they face now are such things as economic uncertainty, financial turmoil, globalization, global interconnectedness, political upheaval, etc. These issues are all contextual and they have a huge impact on industry.
Business example: U.S. companies learned the hard way that business models that worked in the U.S. did not work in emerging countries. Realization and acceptance of this took a long time and resulted in a lag to market and lost business. Management had to realize their historical model was no longer an absolute.
I think this example may be reflective of a problem in Compensation today. Can you see the parallel? Is Compensation in the same state of denial? Theories/concepts developed in the past and accepted as absolutes may not be serving us well today.
Just as companies had to change their business model to compete in global markets, why should we assume our models are any different? Well, you say, our theories have been scientifically tested. But business models in the past were researched and tested as well.
(Hint: Research cannot keep up with all the changes taking place today. And it probably never will. So we can’t wait for the comfort of experts to bless the practices we will have to use today/future in order to deal effectively with all the issues we face/will face.)
We need to think holistically. We need to be able to venture out of our comfort zone. We need to be more flexible and adaptable just as companies are learning to be. We need to look at the larger context and how all the parts are connected.
Understanding our companies’ business is important but it is just as important to see the broader context and build in some contingency plans for changes that are bound to occur. Our companies are doing the same thing.
What do you think?
Context: Background, environment, framework, setting, or situation surrounding an event or occurrence.
Context has always been important to me. For example, I don’t like digital clocks. I don’t like seeing the exact time without a reference point. I like to see the clock face with all the numbers and the hands. I need context. Guess I’m just an analog girl in a digital world!
It’s the same at work. I always thought there was a strong connection between compensation and organizational design. I couldn’t “do” compensation unless I had organization charts. Today context is so much more than that.
Bear with me. I’m going to tell a story that I hope will make you see a parallel to compensation.
A relative of mine has had to have his entire 30 year old house re-wired. When the electrician looked at it he told him that the wiring was completely up-to-date when initially installed and met the then required code. So what happened in 30 years?
The builders didn't anticipate the information age. How could they know that the house 30 years later would have HDTV, a DVR box, a laptop port, an iPod speaker system, and a smart phone charger all operating at the same time. What worked 30 years ago, doesn’t work now.
It isn’t just wiring. Think about it. In other industries besides construction I think you would agree that very few products, services and business practices/processes are the same today as 30 years ago. And it’s even more complicated today.
Companies are now operating in a very different business landscape than the one they faced even 6-7 years ago --- pre-recession. The major issues they face now are such things as economic uncertainty, financial turmoil, globalization, global interconnectedness, political upheaval, etc. These issues are all contextual and they have a huge impact on industry.
Business example: U.S. companies learned the hard way that business models that worked in the U.S. did not work in emerging countries. Realization and acceptance of this took a long time and resulted in a lag to market and lost business. Management had to realize their historical model was no longer an absolute.
I think this example may be reflective of a problem in Compensation today. Can you see the parallel? Is Compensation in the same state of denial? Theories/concepts developed in the past and accepted as absolutes may not be serving us well today.
Just as companies had to change their business model to compete in global markets, why should we assume our models are any different? Well, you say, our theories have been scientifically tested. But business models in the past were researched and tested as well.
(Hint: Research cannot keep up with all the changes taking place today. And it probably never will. So we can’t wait for the comfort of experts to bless the practices we will have to use today/future in order to deal effectively with all the issues we face/will face.)
We need to think holistically. We need to be able to venture out of our comfort zone. We need to be more flexible and adaptable just as companies are learning to be. We need to look at the larger context and how all the parts are connected.
Understanding our companies’ business is important but it is just as important to see the broader context and build in some contingency plans for changes that are bound to occur. Our companies are doing the same thing.
What do you think?
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.
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