Compensation Cafe

Cafe Classic: Don't Use Pay as a Babysitter

Editor's Note:  In this post, Chuck Csizmar addresses this Classic problem practice, a favorite of ineffective managers.  I'd wager that many of you have your own pay baby-sitting stories to share...

Have you ever used a babysitter?  This is when you have someone else assume your responsibilities while you take a break and focus on something else.  The babysitter stands in for you, is you during the period of your absence. 

Typically we think of babysitting when there’s a dependent child involved, but in the workplace it’s not uncommon for ineffective managers to use the same concept when dealing with their employees.  These managers seek to use the pay that their employees receive as a surrogate for leadership – for keeping those workers complacent, retained and generally “in line.”

The practice of manipulating rewards presumes that the employee will chase the money, and will be happy with their lot, while at the same time will not require much in the way of supervision, periodic direction or even meaningful conversation.  The thinking here is that, if I provide you with enough reward you will act as desired in order to not jeopardize those payments.  The goal is to place the employee’s attitude and performance on automatic pilot while the manager is engaged elsewhere.

So far, so good.  Not necessarily a problem.  The red flag goes up the pole when you consider whether these monies are warranted by either performance or business need, or are they simply bribes?

What are we talking about?

Scenarios where pay is used in lieu of actual management are easy to spot.

• The Grand Giveaway:  Where managers try to give away as much money as they can to as many as possible, not worrying overmuch with distinctions between individual performances.  The key is to build an employee's appreciation of their manager’s largesse.

• Title inflation: The promise of bloated and meaningless titles that distort organizational structures, for the prime purpose of rewarding employees in lieu of cash.

• Over rated performance:  Playing the good guy by over-rating performance during salary reviews.  Culprits are often seen rewarding activity over results.  So look busy!

• Assured compensation: Take the risk out of rewards and encourage an attitude of entitlement.  Everybody receives an annual merit raise, everyone earns a bonus. 

• Counter-offers: “Let’s make a deal” attitude to keep resigning employees from actually leaving; a dangerous practice that increases costs and lowers morale.

What’s the cause of this behavior?   Managers typically receive inadequate training (if any) on how to use their company’s pay programs, so many use pay as a crutch.  Spending the company’s money effectively and efficiently isn’t on the radar screen.  They use pay like a club to get an employee’s attention.  And once they have it the manager is off doing something else – with the presumption that pay will substitute as supervision and motivation while the manager is absent – kind of like a babysitter.

Weak and ineffectual managers don’t actually manage their employees, in the sense of performance direction, leadership, setting good examples and decision-making.  Instead, they want to be liked.  They want to avoid conflict and they don’t want anyone to quit.  They want employees to get along, and to help foster a friendly team atmosphere they try to manipulate pay in support of their efforts.

It’s really kind of a bribe.

So what is “managing” to these people?  It’s not about making hard decisions.  Too often it’s trying to get the most for their employees, deserved or otherwise, whether the organization gains in the process or not.  The manager is focused on their own interests, and is using someone else’s money to fund their behavior.

Why it doesn’t work

Relying on pay as a replacement for management has a short effective life cycle.

• Employees see arbitrary same-same pay treatment as de-motivating to high performers.  Why bother extending yourself if you’re going to receive the same reward as the guy doing crossword puzzles?

• Employees resent favored-son treatment and those who benefit for non-performance reasons will always become known.  There goes your morale.

• No amount of money replaces the value of honest performance direction and feedback.  Those with an interest in learning and growing appreciate the help.

• Absentee managers lose the respect of their employees, who know what’s going on.  Remember that employees leave managers, not companies.

For managers who need a crutch to help motivate and retain their employees, to help them do their jobs, the above cautions likely won’t make a difference.  Their goal is not to manage, but to get-by, to be liked by their employees and to avoid disruptions to their routine.  This is not leadership, but administration.

But for those managers who wish to make a difference, who understand that managing employees is a challenging and rewarding role, abrogating responsibility through babysitting is not an option.  They recognize it as the opposite of management, a damaging practice that will not enhance anyone’s long term career prospects.

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.

Cafe Classic: Uncertainty Motivates No One

Editor's Note:  Part of our job, if we do it well, is to remove uncertainty and ambiguity from rewards where it can and should be done (and correctly discerning where this is true).  Dan Walter examines this in today's Classic post.

Have you ever been asked by an executive or compensation committee to create a compensation solution for a problem that was poorly or incompletely described? Nearly everyone reading this has had this happen. Admit it. As you walked away you were probably uninspired even though you may have said yes. That’s because uncertainty isn’t motivating. In fact, when you ask people about their most common driver of procrastination most will say it has something to do with not being certain of how to move forward. The list includes: big projects that require you to delve into areas where you are less than fully confident; complex calculations that require the creation of new formulas or entire tools; dark basements on stormy nights after a blackout; blog articles when you might not have a great idea. You get my point.

Compensation is fraught with uncertainty. Outside of hourly pay and salaries, much of what we do is based on variability (translate that to uncertainty.) The compensation world has lived by the mantra of “attract, motivate and retain” for so long that sometimes we believe just telling our employees that we designed a program to support these goals is reason is enough to make them occur.

Incentive plans, short and long-term, cash and equity based, depend on a level of uncertainty. The point of these programs is for participants to make the potential happen. Our job is to remove as much ambiguity as possible and allow clarity of the potential. One challenge is to make the potential clear without making promises. Another is continuing to have people focus on the potential when the sparkle of the initial rollout is long gone.

When dealing with communicating the potential without overselling, we must take the time to educate. Some of this education should be in the form of tools that allow participants to model outcomes and see the personal impact of them. Other key component is ensuring that each level of management can confidently discuss specific aspects of compensation and properly direct people to the best resources for the answers that are not their responsibility. You may be surprised when you find out how many of your managers either confidently answer questions incorrectly, or create even more uncertainty by not having any answers at all.

Keeping the spotlight on potential for the duration of the program is not as hard as most people make it out to be.  Yes, you can have a comprehensive project plan, millions of documents, videos, an intranet, self-serve kiosks and a super cool performance management system. But, the first step is far easier. Talk. Talk about compensation. Talk about the company. Talk about the goals and talk about how all of them fit together to support your company culture and strategy. Then, when the buzz has quieted a bit, talk some more.

Don’t be afraid of the goals that look like they will never be met, talk about them.  Don't avoid the plan that has underwater stock options, talk about it. In a world where uncertainty motivates no one create as much certainty as possible to drive success. Are there situations where this won't work? If so, post your comments below and let’s discuss!

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.

Cafe Classic: Early-Onset Alzheimer's and the Dignity of Work

Editor's Note: Recent research on early-onset Alzheimer's and what my mom's own dementia journey taught me about work.

Let's file this one under the category of total rewards.  I think it touches every element of the reward portfolio and speaks to the core of the employment relationship - the notion of work itself.

A U.K. study titled "Managing Employees with Dementia: A Systematic Review" was published not long ago in the journal Occupational Medicine.  The research draws on 44 papers and articles which explore the management of employees who developed dementia between 30 and 65 years of age - referred to as "early onset" or "working age" dementia.  People who develop dementia during these years are often employed when the symptoms first appear and can experience difficulties at work for several years before a diagnosis is reached.

Most of us have been exposed to dementia - with parents, grandparents, etc. impacted by Alzheimer's or another form of the condition.  Those of us who have experienced a loved one fall victim know first hand the devastation that the diagnosis, the symptoms and the damage that its eventual progression brings. It's hard to imagine facing this as a younger, working adult. 

As study co-author Dr. Richard Heron says:

There remains much stigma around mental health, and particularly the 'D' word, Dementia, which is perhaps becoming as feared as the 'C' word, cancer was. 

With early detection and anticipation of more effective treatments on the orizon, a diagnosis of early dementia should not mean the immediate end of a working life.  People will have a range of capabilities that do not change overnight once a diagnosis is made.  They will have differing reserves to draw on, and differing home and work demands to take into consideration.  With the right support, care and occupational advice, many will be able to continue safe, healthy and productive employment, well beyond their diagnosis.

The authors take a stab at a list of suggested practices for employers, which range from risk assessment to identifying and implementing reasonable accommodations.

For me, the underlying imperative in this topic is the importance of work and of being productive in our lives as human beings.  And the desolation that can come from the loss of responsibility.  This is an often unacknowledged thread that runs through much of what we in the rewards field (and in the HR profession overall) do in our own work.  The person who brought this lesson home for me most clearly was my mother.

My mom grew up with hard work.  As the oldest daughter in a farm family of ten, she was pulled out of school and put to work in the field when her older brothers left to join the armed services.  She went on later in life, with five children of her own, to return to school and earn the GED she was denied as a younger woman.  She worked many years at a local garden center (she had a magical way with blooms) and for a women's clothing store that offered a great employee discount (with four teenage daughters, you can easily see why this was a good idea).  She washed floors and baked cookies after we went to bed; I honestly don't know when the woman ever slept.

It's been more than five years now since my mom's death, which was preceeded by at least a five-year struggle with Alzheimer's.  Although her onset of the disease was certainly late in life, I thought a lot about her as I read and reflected on this study.  She spent her final year in an exceptional memory care facility with excellent staff.  When we first arrived with her, as part of our orientation, the staff asked about what she enjoyed doing.  Did she like puzzles, listening to music, watching any particular TV shows?  Our advice: Put her to work, give her responsibility for whatever chores she can do, and she will be happy.  She became the queen of laundry folding - and when I visited, we would fold towels and sheets together (with her correcting my sloppy corners, just as she did when I was young). 

The lesson I had reinforced from my mom's struggle with Alzheimer's: There is no substitute for the dignity and satisfaction of doing work - and doing it well.

In our workplaces and in our economic and political spheres, I hope we never lose sight of this.

What lessons have you learned from your experiences with loved ones and dementia?  Have any of your organizations had to address and create solutions for employees with working age dementia?

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.

Image courtesy of openaccessgovernment.org