The Baby is Ugly – Compensation Edition

I love kids. My 7-year-old son claims I like talking to kids more than I like talking to parents (often he is correct.) I am one of those people who coo about the cuteness of every baby. Sometimes I may be stretching the truth. Compensation may be your baby, but sometimes you need to be a bit more honest. Sometimes your compensation baby is ugly.

This post was inspired by a Head of Total Rewards at a client of mine. The company is going through a bumpy patch and there aren’t any great solutions that will make everyone whole or happy. Most of their value has evaporated for the time being. Things they have planned for and communicated at the corporate level have fallen through. Their industry is going through a (temporary) downturn. She said on a recent call, “admit it, Dan, the baby is ugly”.

Admitting the truth about a difficult situation is often the first step to finding a resolution. It isn’t fun. It isn’t enjoyable. It isn’t everything we learn about work-life balance, attracting the best people, motivating them to perform, providing them with rewards to stay for a long time. Sometimes it's necessary to admit the facts so you can patch up the ship well enough to try again another day.

But there is always something redeeming in nearly every situation. Perhaps your expertise and efforts can make a hard landing softer. Maybe there is a way to save and reward the people who will be critical to correcting the course when the storm passes. Maybe your prior hard work of ensuring job titles were tight and pay levels were market competitive will help those who must be let go find a better position somewhere else.

So, what should you do when your baby is ugly? First, remember that this is your job, not your baby. Admitting the truth about the situation is critical to finding solutions. Next, approach your solutions from the perspective of you cannot fix everything in a truly terrible situation, but that doesn’t mean there aren’t any paths to success. Lastly, you need to communicate calmly and matter-of-factly to everyone impacted as soon as the opportunity arises.

Start with a triage assessment. Identify who and what can be saved, which things will survive without your help, and which things must be abandoned. An example can be found here. Abandon the unsavable quickly, but with respect for the people impacted. Explain to those who will absolutely survive that you will be getting back to them soon. Focus your efforts on the things where your efforts are required for future success.

With your priorities set, put your efforts into achievable solutions, not “great” solutions. Most of these won’t be found in your WorldatWork reference materials. Don’t hesitate to contact friends or even external experts. Most will provide ideas without complaint. Focus on quick execution, it probably won’t be pretty, but make sure it’s effective.

Then stand up in front of the crowd and tell them the truth. Be direct. Be clear. Be confident about the future (even when you may be unsure or scared.) In difficult times people need a leader who can shine a light on the facts while also pointing out that the darkness will pass. This is often the hardest part. Remember that you have a plan for tomorrow and that the plan depends on others being able to execute.

Sometimes the baby is ugly. When it’s your friend’s child, keep your thoughts to yourself and say nice things. When it’s your compensation programs, be honest, fix what you can, and focus on navigating the storm.

Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He works as Managing Consultant for FutureSense. Dan is also a leading expert on incentive plans and equity compensation issues. He has written several industry resources including a resource dedicated to 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.

Comments

[E. James (Jim) Brennan]

No one ever got strong by lifting a feather. Every work veteran who has survived "a rough patch" was better for the experience. Not that you enjoyed it or want to ever repeat it... but dealing with bad conditions is a vital if not career-essential practical lesson that solid contingency plans followed with calm resolution, patient endurance and unflappable confidence can and will succeed.

Nothing easy teaches you much. Every enterprise needs hardened survivors of disasters. The perspective and wisdom they gained by dealing with ugly realities are essential to maintain positive hopes and to deter despair. While untested novices are prone to panic, seasoned professionals deal with the bad and with the good with steady unruffled competence.

On employment selection projects for new operations, I took pains to assure that the fresh young faces of raw beginners were "salted" with older workers who had experienced plant closings and thus brought very useful perspective to the new crews.