Compensation Cafe

Cafe Classic: Can Quantum Mechanics Make Your Pay Programs Better?

Editor's Note:  One of our favorite things to do at the Cafe is to step outside the familiar confines of our jobs and look at the things we do through the lens of another field. 

Today we're going to reach out into the strange world of quantum mechanics for insights on pay program design and implementation.

Quantum mechanics, as briefly defined at LiveScience.com, is...

...the body of scientific laws that describe the wacky behavior of photons, electrons and the other particles that make up the universe. Quantum mechanics is the branch of physics relating to the very small. It results in what may appear to be some very strange conclusions about the physical world.

That, it turns out, is an understatement.  Quantum theory (which underlies the field of quantum mechanics), when it emerged a hundred years ago, turned our understanding of reality and the classic world of physics upside down.  Niels Bohr, one of the theory's pioneers, liked to say that "Anyone who is not shocked by quantum theory has not understood it."  A century after its birth, now being used daily in applications that range from MRI scanners to solar cells to DVDs, it is still considered a puzzle.

What can the murkiness that quantum physicists discovered at the heart of the atomic world possibly offer to us, who practice in human resources and compensation?  I think it is encapsulated briefly and beautifully by Italian theoretical physicist Carlo Rovelli, author of the bestsellers Seven Brief Lessons on Physics and Reality is Not What it Seems:

Reality is only interaction.

Quantum theory holds that things, at the atomic level, don't always exist.  They exist only when they are observed by or when they interact with someone or something else.  The controversial finding at the heart of quantum mechanics is that there is no objective reality independent of whoever happens to be reacting with whatever.  As Rovelli likes to put it, the things of the world can be better compared to a kiss - which only exists when it happens - than a stone.

You think of your new salary structure, that incentive plan you developed in collaboration with your cross-functional design team, as things that exist as their own independent and objective realities.  But what if that isn't true?  What if your pay plans only exist, only become real when managers and employees interact with them?  What if their reality is solely the experience that managers and employees have when they encounter the plan in their work lives.

The problem is that we often go about our jobs believing that our pay plans are like stones.  We create them, we set them neatly in their place, we write a memo or hold a communication session (maybe even several communication sessions!), and then we step back and wait for the magic to happen while we turn to our next initiative.  And we try to understand why they don't drive the changes and produce the impact we hoped for.

How would we do our jobs and plan our priorities if we considered the interaction that people have with our pay plans - rather than the plans themselves - as the product of our work?  What might we do differently if we focused our ideation, design and implementation efforts on the "kisses" - those moments when managers and employees observe and interact with our pay plans?  If we envisioned the result of our work as the net of interactions that builds over time around them instead of the content of the written plan materials?

Could this make our pay programs and our work better?

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Partner at 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 hiking, reading and hanging out with family in any spare time.

Cafe Classic: Before You Link Pay to ANYTHING...

Editor's Note: Sometimes the best advice on pay comes from outside our profession.  Today's Classic post serves as Exhibit A.

Rob Markey of Bain & Company's global Customer Strategy and Marketing practice wrote a great "series" of HBR posts awhile back on the perils of linking pay to customer feedback (The Dangers of Linking Pay to Customer Feedback and Before You Link Pay to Customer Feedback).  As any of us who've considered using customer feedback metrics in incentive design know, this can be a potential minefield.  Markey's cautionary advice on pay linkage is well written and worth our consideration beyond the boundaries of customer feedback metrics ... before we link ANYTHING to pay.

With that in mind, Iet's consider his five essentials - preconditions for trust and credibility - in the context of broader compensation design:

Essential #1: Truly reliable feedback and metrics.  If your metrics aren't trustworthy, if they vary widely from one time period or unit to another and you don't know why, your compensation system won't be trustworthy either.  This "essential" has obvious application to any metrics we might consider tying to pay.  Markey provides some great suggestions for digging into prospective metrics to assess their viability with questions like is the sample controlled and stable? and are response rates high enough to reduce responder bias?

Essential #2: A clear link to financial and strategic outcomes.  Your metrics must correlate with financial and strategic goals.  I've posted before about the importance of grounding incentive design in value creation.  Markey makes the same point here: Without a confirmed link between your selected incentive metrics and business outcomes, your incentive system won't last long.

Essential #3: Processes and tools for understanding root causes.  Markey uses the example of a company which began linking improvement in customer feedback scores to executive compensation before it had developed the discipline and processes for truly understanding those scores.  The company's managers - understandably - felt helpless and frustrated.  This is perhaps our most common mistake with incentive plan development, one that critics like Alfie Kohn and Dan Pink nail us on for good reason: throwing incentives at a problem before/without understanding or providing the tools to deal with its root causes.

Essential #4:  Organized learning.  The root cause discipline noted in #3 above must be supplemented with the means and the leadership support for learning and improvement.  Again, often an area where we are at fault where we try to implement incentives in lieu of learning and development(I've seen it tried and I'll bet you have, too).

Essential #5:  Repeated communication.  Why, Markey asks, do so many leadership teams spend countless hours devising the details of incentive systems and then under-communicate their intent?  Amen.  Although, as my Cafe colleague Margaret O'Hanlon and I have both noted in earlier posts (mine here, Margaret's there), effective communication in this age of information overload is more about creating patterns than repeating messages. 

Sometimes our best advice comes from outside the profession.

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Partner at 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 hiking, reading and hanging out with family in any spare time. 

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Cafe Classic: What Do You Do?

Editor's Note:  Dan Walter tackles the Classic holiday get-together question, offers some thoughts from the Cafe contributor team as well as his own tips, then opens the floor for YOUR thoughts.  How do YOU answer this question?

The holiday season is now in the rear-view mirror and everyone reading this post has recently had to answer some version the question, “what exactly do you do?” Maybe you had to explain it for the umpteenth time to a family member who spent the past year sending you articles about payroll. Maybe you had to explain it to someone who blames you, personally, for the disparity in pay between executives and “everyone else.” Perhaps you had to deal with why you had not yet fixed the minimum wage, income taxes, health care or some other headline issue. Or, this might have been the year where the light went on and someone FINALLY realized that you were some sort of workers compensation attorney.

Some of you might have it even worse, your job might include compensation AND benefits. Maybe your title includes the words “total rewards.” Heaven forbid your business card or email signature includes the words analyst, consultant or director. Explaining what you do in a way that everyone can understand can be one of the most difficult parts of the job.

I asked for some help on this post. Some of my esteemed Compensation Café contributors provided two-sentence descriptions of what they do. Some also provided short descriptions of what YOU do.

Here are some of the descriptions of what the contributors do. (Feel free to guess the writer of each in the comment section.)

I help HR leaders leverage the power of thanks and social recognition to empower employees and build cultures of appreciation. Through a more modern and strategic approach to recognition, companies can fuel employee engagement, productivity, and ultimately drive business results.

I assist organizations in solving and resolving their employee pay challenges. From across the street to across the globe, I advise clients as to how best to effectively and efficiently design programs, value positions, measure performance, communicate transparency and ultimately properly spend reward dollars in a manner that benefits both the employer and the employee.

I work with companies on their employee pay/compensation issues. They may need help on problems with salaries, bonuses or a certain benefit. Some of my work is helping companies with employee pay issues in their offices or manufacturing facilities overseas in other countries. Because the laws about compensation are different in other countries, they may need help in making sure their pay plans are legal.

I try to get people to think in new ways about how people and technology impact business outcomes.  ​

I diagnose situations and 'splain the range of most applicable HR and compensation policies and practices.  Drawing on many decades of experience with virtually every industry and location in North America, I research, summarize, distill and (hopefully) clarify the range of options available for total rewards applications.

Here are some descriptions of what you do…

The primary role of a comp professional is to ensure the right mix of rewards to attract, retain and motivate people to execute its business strategy.

A comp/TR professional collects and analyzes data, conducts diagnoses, makes presentations and implements the most situation-specific suitable range of optional prescriptions for effective solutions in human behavioral issues.

I think the descriptions above simply prove the point of how hard it can be to explain what you do. The thing about the problem is this: If you can't explain what you do, how can you engage your business stakeholders in helping you help them?

Here’s my stab at it.

A compensation professional figures out when, how and how much to pay people given their company’s strategy, budget and culture. In the end the goal is to pay, recognize and support employees (or consultants, etc.) in a way that allows both the employee and company to be successful.

Or, try this:

I figure out how to pay people and adjust as needed.

I should point out that some of my own family still call me to ask if I can provide stock investing advice (I have some deep expertise in equity compensation, but…no.) Friends still ask me to talk to their bosses to explain why they should get a raise (not generally my day job.) And, of course, people regularly blame me for the wealth gap, executive compensation excesses and the rise in housing prices (I wish I had, but do not yet possess, the power to control any of these.) I think you get the point. My holiday season is usually as fun as yours when it comes to this topic.

I would love to have you post your own two sentence descriptions of what you do. Maybe someone else (like me) can use it at this year’s family reunion or holiday party.

Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He works as Managing Consultant for FutureSense. Dan is 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.

Happy New Year and a Cafe Announcement!

Happy New Year Dear Readers!

As we ring in 2022, we are also closing a chapter in the life of the Compensation Café.  After serving up straight talk, original thinking, and caffeinated conversation on everything compensation since we opened for business in April 2009, this site has published its last batch of new posts.

The good news is that this site, with its treasure trove of great content, will remain here for you (at least for the foreseeable future).  Going forward, we will continue to publish Classic posts on a weekly basis.

Here’s the great news: there’s a new Café in the works!  Long-time regular contributor Dan Walter is putting the final pieces in place for a reboot of the Café at a new place and URL (www.TheCompCafe.com).  The Comp Café will work to pick up and expand on what the Compensation Café started. The format will change slightly for the video-oriented world we live in. The contributors will be mainly new (with some familiar voices like Dan and Reena Paul).  The hope is that this new resource will provide another decade or more of fresh thoughts, open conversation, new ideas and technical know-how for the next generation of total rewards professionals.

I want to thank everyone who has written for the Café over the years, particularly the regular contributors.  Few people can turn out on-target original content, laced with humor and attitude, day after day after month after year, the way this group has.

Special recognition to those who carried this site right to the end:

They include my dear friend Margaret O’Hanlon, who has been on this journey from Day 1 and who I have often described as the Café’s co-founder.  It would be difficult to imagine the Café apart from Dan Walter, whose unique voice, sense of humor and unmatched gift for reward analogies helped define our cheeky, in-your-face brand.  There is Chuck Csizmar, whose wisdom and insights (and cat pictures!) made him a cherished favorite of so many readers.  And a shout out to the newest regular, Reena Paul, who joined the Café team just this past May.

Many others did stints, long stints in some cases, as regular contributors over the past 12 years.  This esteemed group includes Jim Brennan, Stephanie Thomas, Derek Irvine, Jacque Vilet, Laura Schroeder, Darcy Dees, Becky Regan, Doug Sayed and Terri Albee.

We’ve been privileged to feature the writing of so many great guest contributors, way too many to list them all, but I want to send a special shout to just a few: the incomparable team of Pat Zingheim and Jay Schuster, Howard Risher, Gerry Ledford, Paul Weatherhead, Chris Dobyns and Joe Thompson.

And readers … how can we express what your readership, the comments and encouragement you’ve shared, and the great discussions you’ve started with us have meant?  What a wonderful thing it has been to meet and connect with you at this funny on-line coffee shop!  We are more grateful than you’ll ever know.

For me, I want to say that all of you who’ve written, who’ve read and who’ve shared our content have blessed my career and my life in more ways than I can count.  Thank you.

Please watch here for announcements on the reboot under Dan’s care – coming soon – and do continue to check in/subscribe for great Café Classic content!

Ann Bares  |  Founder/Editor

Cafe Classic: A Beginner's Guide To Job Descriptions

Editor's Note:  The process of writing job descriptions doesn't have to be a pain in the behind, says Chuck Csizmar.  In this Classic post, he shares some practical tips and strategies for working with managers to get 'em done!

After enough gloom and doom about managers hating job descriptions (see my earlier article on this), let’s take a fresh perspective and look at how writing descriptions should be handled.   Call this a beginner's guide, a how-to procedural or simply a few tips ‘n tricks that can work wonders.

The Beginners Checklist

The process of writing descriptions doesn’t have to be a pain in the butt.  It may never be a favorite activity, but we can take away a lot of the sting.  It’s my view that a win-win strategy with your managers is to take a more simple and straightforward approach.

The basic needs:

• A simple, short and standardized form so that all descriptions look the same.  Two pages, no more.

• The Basic Purpose of the job – a short summary you could verbalize in sixty seconds.  Answer the question, "why does this job exist?"

• Focused bullet statements that describe only critical responsibilities.  Explain what is key to the impact and import of the job. 

Extra Toppings

Unfortunately many organizations require more than the basic essentials.  They're looking for what I call the “extra toppings,” a combination of ancillary information, feel-good statements and subjective information that often doesn’t help.

If the idea is to describe the job, do we need to talk about candidate qualifications?  And who is deciding this?  Check whether incumbent employees meet those qualifications.

Length of experience?  That’s another subjective area whose inclusion is intended to distinguish between core and senior level jobs.  This is a short cut that avoids differentiating responsibilities.

More useful is a list of knowledge and skill requirements that a candidate must (or is preferred to) have.  This helps recruiters screen candidates, but make sure you qualify the data.

Have a care before you ask for educational requirements, unless your legal staff can defend you.  Many use an “equivalency” phrase, but who understands that?

Is heavy lifting required?  Perhaps travel?  Maybe it’s an outdoor job with dusty working conditions.  Nothing wrong here, but does it need to be written down, or could it be verbalized to the recruiter / candidate – or simply assumed?

Sometimes an organization will add text to a description in order to comply with state or federal regulation.  When ADA was announced, companies scurried to revise descriptions to provide acceptable language.  That language didn't change the role of the job, and arguably didn’t have much of an impact on candidate selection, but the lawyers were happy.

Like I said, extra toppings.  Have a care that your additional content requirements don’t become too extreme.

How To Write A Job Description

• Use bullet statements, not run-on sentences.  Short and sweet.  Focus on key words.   A rule of thumb is to have at least four, and no more than eight bullets.  Beyond that you’re either repeating or listing secondary tasks.

• Start each bullet with a strong verb, like plan, develop, advise, operate, design, prepare, etc.  Powerful action more easily identifies either a direct or support role.

• Avoid weak verbs like assist (what does that mean?), coordinate or work with.  Here the reader isn’t exactly sure of the job’s impact or import.

• Focus on the key responsibilities.  The reader should come away with a clear understanding of the job's main points.

• Avoid flowery language, puffery that adds little clarity.  “Drive and have a passion for x”,  “Be the expert for . . “ and “serve as a thought partner” are taken from an actual client description.

• Throw away subjective adjectives that aim at the how, not the what(excellent, strong, persuasive, collaborative, successfully, smart, solid, immense, aggressive, etc.).

• Write the description as if there's no incumbent.  Don’t be influenced by an employee's background and experience.

• Write the Basic Purpose last.  Once you’ve already prepared the bullets it’s straightforward to complete the summary.

• Know when to stop.  Some writers can’t help themselves – especially when listing the job tasks.  They go on and on detailing secondary and minor tasks , as if everything is equally important.

The Manager's Friend

Remember what you're trying to accomplish.  On the one hand to prepare effective job descriptions, but at the same time to make the process easier for the manager – the one responsible for getting them written.  You want a win-win scenario.

So here are a few thoughts to help elevate you to hero status with your managers.

• Short and simple; managers can get behind that.  Resist the temptation of “specialists’ who tell you all the extra toppings you need.   Short forms are completed faster – with less complaints. 

• Purchase a job description source book.  A Google search will show several quality sources.  If you send managers a generic copy of a likedescription, they'll have an easier time writing the proper description.

• Use the Manager as the “editor,” the subject matter expert who reviews the description.  They should do that anyway, but it’s a treat when you’re not expecting them to write the darn thing. 

• Offer to help.  Careful here, so you don’t get sucked in, but offering support (training, reviews, Q&As) up front can remove some of the sting of having to do something they'd prefer to avoid.

• If some of the "extra toppings" are generic (i.e., ADA or other compliance language), tell the manager that they don’t have to worry about that stuff.  HR will add it in later.

Good luck out there.  Now you know how to keep managers from chewing off your head.

Chuck Csizmar CCP is the 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.