Compensation Cafe

Cafe Classic: A Practitioner's Recipe For Success

Editor's Note:  Interested in a successful compensation career?  Chuck Csizmar shares some Classic tips!

Whenever I come across self-help materials intended to assist Compensation practitioners with their professional growth I often notice an overly large emphasis on the technical side.  And when reading internet blogs meant for the same audience there again seems a constant litany of how-to guidance on, again, technical issues.

That's all well and good, but . . . .

It seems to me that becoming a master technician in the compensation "science" is not by itself going to be an effective strategy for success in the corporate world.  In fact, sometimes that technical prowess can prove somewhat of a hindrance, as it could limit upward opportunities.

Checklist of Useful Competencies

If you rely solely on your technical capabilities, while remaining in your cubicle all day, and if you're saddled with the personality of a troll, you're going to have an uphill struggle toward success.  You're going to need more to work with, so print this checklist and tape it to your office wall.  It could save your career.

• Flexibility: Be willing to listen and keep an open mind.  Become known as a problem solver. Don't quote policy except as a last result.  Have a reason for your actions that can be easily explained.
• Understand the business and how Compensation impacts it:  You're not on an island cut off from the rest of the business.  Learn how what you do interacts with and has an effect on the business. What you do should relate to and support organizational objectives.  If not, know why not.
• Have a personality:  Basic stuff, but have a ready smile, greet people, shake hands and in general show a warm side to those you interact with.  Become an engaging person.  Oh, and try to be sincere about it.
• Don't be a Geek/Nerd: Don't spend all your time spouting technical language and showing off charts & graphs.  As if all those figures are self-explanatory and you're merely the spokesperson.  That data should be the backdrop to your explanations, not the focus.  Don't be an analyst when you need to be a leader.
• Be able to work a room: Leave the introvert at home and develop the skill of being comfortable holding multiple conversations in a room of strangers, colleagues or even senior leadership. That will build your image in a positive way.  If you're an introvert, work on it.
• Be persuasive:  You will not get too far by dictum, so work on your reasoning and communication skills.  You need to be able to influence others, to gain agreement on the strength of your rational arguments.  "My way or the highway" doesn't generate a warm response.
• Become the one who gets lots of Christmas cards: That's your goal for next year, to be someone that colleagues think of when preparing their lists.  That is usually a good sign, because they like and/or respect you. 
• Play (a bit of) politics:  I don't like this one, but it's true.  Politics exist in every organization, so you need to be able to play the game at least a little.  Don't think that you can "stay above the fray," as you're a professional or some such rot.  The powers that be will eat you alive. But as best you can try to remain neutral and project yourself as someone that all sides can trust.
• Yes, be technically proficient:  Of course, you still have to know what you're talking about, but the higher up you climb the food chain the less reliance you'll need on your personal technical capabilities.  You will become valued and judged for what else you bring to the plate.

Nowhere on this list will you find the ability to rattle off the overtime exemption criteria for the FLSA, or the key rating descriptions in your point-factor evaluation scheme.  And nobody is going to swoon when you describe linear regression, correlation coefficients or the difference between the Cost of Living and the Cost of Labor.  Your audience, your clients, your senior management will expect more.

But if they like you, if you have an engaging personality and can work well with others, well then, you're halfway there.

Don't Limit Yourself

Unless you want to.  Unless you are someone who prefers the technical work, to the exclusion of the managerial side of the craft. 

Those employees are out there.  I've met them.  They 're happy with what they do.

But if your repertoire of competencies leans too heavily toward excel spreadsheets and data analysis your ability to "pass through the curtain" from the hard side of Compensation (technical) to the soft side (managerial) will be limited.  Because Master Technicians tend to remain just that, both by competency and by interest.

Likely you have seen your own examples of individual contributors (technicians) who have been promoted beyond their capabilities - or their interests.  Those employees are rarely successful.

So pick and choose.  If you want to go through the beaded curtain be certain to bring more along with you than a calculator and a spreadsheet. 

Warm up that smile!

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 "Vintage Recipe Box" by Laura Stokes Estrada

Cafe Classic: Either Put Me in Charge or Let Me Be a Lackey. I'm Fine with Either, But I Can't Do Both.

Editor's Note:  Truly Classic (and invaluable) advice from Dan Walter.  Pay attention!

A friend recently updated their status with the title to this article. Ironically, I saw it just as I got off a call with a client who  was explaining that somehow she was expected to serve as both the strategic visionary and tactical processor for her company’s multi-national LTIP programs. The simple request in my friends status update seemed reasonable, well thought-out and familiar. As we traverse the crags of an uneven recovery, companies have found it difficult to create compensation plans that perform as expected. As budgets continue to be bound by uncertainty, companies have been unwilling, or unable, to hire tactical help. This leaves compensation departments in a quandary. When should we strategize and when should we make things happen?

For those of you who are feeling like your personality and activities are being split down the middle, I'd like to suggest a small exercise. Take 4 hours and block it off your calendar. (I know you don’t have 4 free hours, but trust me this may really help.) Let’s just pretend you blocked off 10:00am-2:00pm tomorrow.

• 10:00-10:30: Spend the first 30 minutes making a list of every strategic idea you would address if you were in charge of everything, but not responsible for doing any of the tasks. Rank based on compliance, urgency, cost and benefit.  Call this your “Strategy List”.
• 10:30-11:00: Focus the next 30 minutes making a list of every process you would improve if you didn’t have to worry about planning, administration or reporting tasks. Rank based on compliance, urgency, cost and benefit. Call this your “Tactics List”.
• 11:00-11:30: The next 30 minutes make list of all the tasks you would do if you were never interrupted by other things. Think about the minutiae and get granular. Rank based on compliance, urgency, cost and benefit. Call this your “Tasks List”.
• 11:30-12:00: Go through the Strategy, Tactics and Tasks lists and mark each item that ONLY someone with your skill set or better (not you) can get done. Then mark those that can be done by someone with a lesser skill set.
• 12:00-12:30:  Look at the remaining items. These are the things that you believe ONLY YOU can accomplish. Is this list realistic? Can anything be moved to one of the other lists? When this list is down to two or three items, you are set for a promotion.
• 12:30-2:00: Go have a nice lunch with a friend.  Celebrate that you just figured out how to put yourself in charge or be a lackey.

A very smart manager once told me “irreplaceable is unpromotable.” She made it clear that as long as I was the only one who could do certain things, I would remain the only one doing those things. Turns out, it’s basic logic. If you want to stop doing things on your list, you must first figure out a way for others to do them (or to make the items go away altogether.)

Look at your lists again. Which things do you really want to be doing? Of everything that’s left, can you train, hire, outsource, bring in consulting or temporary staff to get them done? If yes, put together a business case for exactly that. If no, keep working on your lists until the answer is yes. I have seen people change things in a week or two and I have seen cases where the changes were so large or numerous that it would take 6-12 months to get them done. I have never seen company where the changes were impossible.

The key is this: If you want to be in charge, the first step is figuring out how to be in charge. Regardless of whether you want to be a lackey or in charge, the first step is to define what those terms mean. The next step is to clearly communicate to those who can help make the change. This may be your boss, colleagues, or the staff working for you. The key is to show what’s in it for them (WIIFM). If they see the personal benefit, they may be inclined to help.  If you communicate things as a plea for help, you may get short-term traction, but nothing will really change.

So, put yourself in charge or make yourself the lackey, but only you can ensure that you’re not both.

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: Are You Adding Value?

Editor's Note:  Chuck Csizmar raises this Classic question and urges us to take an honest look in the mirror to discover the real answer.

Have you ever been asked this question at work? Or perhaps looked at yourself in the mirror one morning and asked yourself? My belief is that we don't consider this question enough, for ourselves and for the employees who work for us. We dance all around it.

In either case above the usual knee-jerk response most of us come up with tends to focus on job performance, on personal competencies and even on having shown a demonstrated loyalty to the organization by sticking around for years. But is that missing the critical point of the question, your value to others, and by missing that point you can mislead yourself - like a slick politician who talks a good game but fails to address core issues.

The Real Question

Shouldn't a more considered response relate closely to what the organization itself considers as to what your value should be, and less about how busy you've been, how knowledgeable you are in your field or even your impressive length of service? You could be a paper pushing administrator occupying the same chair for years and still give yourself a high personal score. "I'm doing a great job."

Chances are that many of us may not be honest with ourselves, and validating that sidestep are many performance appraisal processes that seem to gloss over the value question without zeroing in. Their "What have you done?" query often doesn't relate close enough to those actions, behaviors and achievements that should have been done to advance business interests.

Yes, you have a job to do, and perhaps even a job description that lays out your duties and responsibilities. If you perform as to what the description lays out, is that enough? Is that adding value or is that treading water? Just doing enough. It can go either way, but even the rare job descriptions that are accurate and up-to-date can be very inward focused - not considering the bigger picture of how a job performance relates to and can advance the department, never mind the business.

Or hold things back.

And what about those employees who report to you? Would you be satisfied if one of them told you, "I'm doing what the job description says. Isn't that enough?" Here the unstated follow-up thought is likely, "I'm getting by."

What Defines "Value"?

Your organization, whether you consider the entire business or even the smallest department, has likely laid out a series of objectives for the year. There are goals, there are definitions of success and very likely defined pathways toward the end zone. With that thought in mind it's easy to see that an employee adds value when, in the course of performing their job they assist the organization / department in achieving those goals - helping in even a small way to score the financial touchdown.

In that light, consider that your activity list - you know, the one that ticks off all the accomplishments you've achieved over the course of the year - may actually be aimed in the wrong direction. Being busy can be viewed as the same as walking on a treadmill. You can build up a sweat but you won't be getting anywhere.

So how much value are you adding?

Do You Have What It Takes?

Let's go back to the mirror with a revised question. What are you doing to help your organization / department achieve its goals? Are you playing a leadership role, a supportive role, an individual contributor role or has your train gone off the tracks and down some rabbit hole into clock watching and "just doing the job?"

Leadership would view adding value as being personified by the employee who not only does their job but does it in way that keeps organization objectives in mind. That employee doesn't waste time or resources, understands how their role impacts the business and is engaged in helping the business succeed. Examples are many when one seeks to do their job in a way that helps the greater good.

Is that you? Do you have what it takes to truly add value to your employer? Is that what your mirror says?

Because the "I'm following my job description" attitude is a short sighted response that helps neither your career or your organization.

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 "Value" by Mike Cohen

 

Cafe Classic: The Innovator's Dilemma, Reward Plan Edition

Editor's Note:  A salute to the late, great Clayton Christensen, the academic and management consultant who developed the theory of "disruptive innovation." 

Think that premium employment brand and strong reward package are going to help you succeed in the age of disruption?

Think again.

In his revolutionary bestseller The Innovator's Dilemma, the late Harvard Business School professor and innovation expert Clayton Christensen explored the dilemma behind innovative, well-managed companies who seem to do everything right and yet encounter a dive in their market share or even disappear entirely.  In fact and most disturbing of all, Christensen's research showed that the things that bring and secure an organization's initial success can often become the most powerful reason behind its failure.

In their chapter within the Oxford University Handbook on Organizational Climate and Culture, Mercer consultants Richard Guzzo, Haig Nalbantian and Luis Parra tell the story of a company that experienced the reward plan version of the innovator's dilemma.  Organizations -- the authors note (and many of us know from our experience) -- often become what they reward, and pay is considered a critical expression of an organization's culture.  When a company's culture, which has been a key reason for its business success, becomes an impediment to necessary change, the reward system may be a primary culprit.

The authors share the example of Digitt, a global technology and information services company.  Digitt was renowned for a strong culture that emphasized innovation, teamwork, employee participation in decisions and performance-based pay.  In studying Digitt, the authors took a "big data" dive, conducting an internal labor market (ILM) analysis that drew on up to 10 years of employee data in order to statistically measure, model and ultimately understand the most important drivers of workforce outcomes.  In addition to other findings, the analysis revealed the following two characteristics of the company's reward program:

• Digitt had a strong internal labor market that was insulated from outside labor market dynamics.  Talent was built from within, with the most successfu employees entering the organization right from school and advancing internally.  Mid and late career professional hires were infrequent.  Most open positions were filled internally through promotion or transfer.
• Because Digitt's performance rewards were predominantly group-based, pay variations reflected business unit performance much more than individual performance.  As a consequence, an employee's tenure and business unit location were the biggest drivers of pay.  There was little variation in the level of rewards flowing to the lowest performers versus the highest performers.  (In fact, the authors concluded that close to $100 million a year in rewards flowed to lowest quartile performers when all elements of "performance-based" pay were added up.)

Digitt, in the face of rising competition and technological change, found itself in a place where it had to transform both its business model and its product/service offerings -- a transition that had enormous implications for the skills and capabilities of its workforce.  It needed, in essence, to renovate its talent base. Unfortunately, the company's cultural reality, driven substantially by its reward practices, threw some substantial roadblocks into its path:

• Being handsomely paid based on their tenure and their position in declining yet still profitable business units, there was little incentive for those with outdated skills and capabilities to leave.
• In contrast, newer employees with more relevant skills and experience were disadvantaged pay-wise by a system that rewarded tenure and reflected their placement in newer business units that were still ramping up and not yet profitable enough to reap the rewards of existing incentive and profit-sharing plans.
• The problems above were exacerbated by the insulation of Digitt's internal labor market and the lack of market-sensitivity in its reward programs.  As the authors noted:

Internal labor market signals about relative value were telling lower-performing analog engineers to stay at Digitt, even as external labor market signals would have communicated depreciation of their value...

The lesson is this:  When business conditions change, as they now do at an ever quickening pace, the very culture and reward programs that created success could now be an obstacle to sustaining that success ... or even surviving.  That speaks to a level of vigilance that I suspect few of us are keeping.

I'll bet some of you are living your own version of this innovator's dilemma. 

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.

 Creative Commons image "Oops - Part II" by Kyle May

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.

Cafe Classic: Reminiscing with You This Time of Year

Editor's Note:  Did you know that our Human Resources "family" has its own genealogy and history?  In today's Classic, Margaret O'Hanlon shares our very own story once again. Paraphrasing the words of Ancestry.com, take a few minutes to discover what makes you (and your colleagues) uniquely you!

All of us like to hear stories this time of year, so I thought I would do my part. 

Did you know that we have a family history that goes back to the 1800's? Pour a glass of wine, nestle into that chair by the fire and I'll tell you the story of Human Resources. (With lots of help from Wikipedia, so remember that this a story could have some misty origins.)

Once upon a time there were people who lived without FSAs, 401(k)s, FLSA, DOL or even Human Resources. And yet their lives were terribly difficult.

"The early development of the [Human Resource] function can be traced back to at least two distinct movements. One element has its origins in the late 19th century, where organizations such as Cadburys at its Bournville factory recognized the importance of looking after the welfare of the workforce, and their families."

Remember that in the late 19th century the Industrial Revolution was in full swing with employees working in ghastly, unsafe sweatshop and factory conditions. The Cadburys had something entirely different in mind for their employees. From 1879 to the early 1900s they pioneered pension schemes, joint works committees and medical service within a culture where factory jobs could swallow most of your life and give back barely basic financials. The Cadburys also developed a community for their employees, building houses in a style that would be used as a model for decades and providing for health and fitness activities. (Any of this starting to sound familiar?) Other employers became uncomfortable as the Cadbury's model turned out to have merit. How could they compete?

The second movement combined politics with business -- a theme that is with us still. 'The employment of women in factories in the United Kingdom during the First World War lead to the introduction of "Welfare Officers". Meanwhile, in the United States the concept of human resources developed as a reaction to the efficiency focus of Taylorism or "scientific management" in the early 1900s, which developed in response to the demand for ever more efficient working practices within highly mechanized factories, such as in the Ford Motor Company. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts.'

"During the middle of the last century, larger corporations, typically those in the United States that emerged after the Second World War, recruited personnel from the US Military and were able to apply new selection, training, leadership, and management development techniques, originally developed by the Armed Services, working with, for example, university-based occupational psychologists. Similarly, some leading European multinationals, such as Shell and Phillips developed new approaches to personnel development and drew on similar approaches already used in Civil Service training. Gradually, this spread more sophisticated policies and processes that required more central management via a personnel department composed of specialists and generalist teams."

Yes, Virginia, we have an honorable and interesting family history with a common thread of facing stark realities with innovations. Work has gotten more interesting, more fulfilling and less physically threatening and we've had a piece of this progress.  We learned and keep on learning. It's a great story.

Margaret O'Hanlon brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm is re:Think Consulting. 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 everythingiscommunication.com. She is a member of U.S. Masters Swimming.

Excuses

One of the hardest parts of a manager’s job is having to deal with staff issues – with their employees. Every one of us as individual employees can present challenges to a manager in how to treat us, talk to us, lead us, set the right example for us, and be our “go to” person when we have questions/concerns – either about the job, other employees or about their perception of how upper management is treating them.

How you handle these challenges can have a direct impact on employee morale. A bad move here can create a problem with a single employee but may soon radiate outwork to the larger group.

However, many managers are not comfortable with these responsibilities, and no manager in my experience has ever thought that being the boss of subordinates is a piece of cake job. They are always looking for help to get this part of their job description successfully managed.

So, when their senior leadership makes their job more difficult by being less than honest with employees, or simply capriciously arbitrary, they as the front-line representatives of management are put in an uncomfortable and often untenable position.

Let’s look at a few examples of where the word coming from Executive Row (30,000 feet) can cause problems for the managers in the trenches.

They Said What? And With No Explanation

• Pay increases: Management says that everyone in the organization will be receiving the same x% in pay increases, so our group will too. No mention of circumstances where our staff could or should be treated different from everyone else. Just deal with it!

• Rejections: Management says NO! to your recommendations, with no reasoning provided. Just NO! Not much to work with here.

• One for all: One part of the business didn’t do so well last year, so everyone (all parts) in the organization must cut back or do more with less. Again, no explanation to offer to your (perhaps) high performing employees.

• Performance Appraisals: During a reduced merit budget year management decides to do away with performance appraisals. Let’s treat all performance categories the same. So, Bob the Super Star and Joe Average will be treated the same. That always goes over poorly.

• Reorganization: During a review of the organization chart management decides to interview employees to decide whether they should keep their jobs. Everyone must reapply to retain their current position. Try explaining this one to your staff.

• Executive pay: Regardless of individual or company performance the executives still must be paid competitively (including incentives and merit increases). Not like you or me.

• Treatment of management: When the organization isn’t doing well and cutbacks are the order of the day, somehow management is treated differently. As in, better.

• Future treatment: Expectations are that the business “may” face challenges later in the year, so we’re cutting back NOW. Those affected prior to the arbitrary calendar red line will be treated better than those on the other side of the cutoff date. And no, we won’t “fix” this next year.

• Credibility challenge: When management tells you to do something that you know makes little sense and cannot be defended to employees. And then management offers you no help (explanations, scripts, visible support, etc.) in talking with your staff. You’re on your own.

What’s a Manager to Do?

How often do these scenarios tend to play out? If you’ve been around the block enough years, you’ll probably face most of these situations at one time or another.

Sure, you can ask your boss for clarifications and explanations, but likely the response you’ll receive will be at best only a clarification (“This is what they said. Do I have to repeat myself?”). What you’re looking for, some form of explanatory or rationalizing assistance in talking to your employees without sounding like an idiot or being out of the loop, will not be forthcoming. Management can be very reluctant to explain themselves, and defensive as well (“Look at the organization chart. I’m up here and you’re down there. Any other questions?”)

Perhaps this is because there is no rationale explanation, but you didn’t hear that from me <g>.

A tactic I’ve used in the past, with mixed results I’ll admit, is to have a heart-to-heart talk with my own manager. There’s no point in railing against the management decisions themselves, so focus on getting the boss to understand the plight you face in trying to explain the unexplainable to your employees. And the likely result (your personal loss of face, of credibility, of trust) that will likely occur and try to gain their help in together dealing with the problems caused by the management action.

Because your success and effectiveness as a manager will be on the line.

But whatever you do, don’t simply shrug your shoulders helplessly in front of your employees. That would send a very negative message (i.e., don’t care, not your fault, you’re just the messenger, you couldn’t do anything about it, impotence in the face of things, etc.). You need to walk that balance beam between being a part of management and still showing that you care for and understand the concerns of your employees.

Critical step: Try to avoid being accused of making excuses. That’s a reputation that will be hard to recover from.

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.

Creative Commons image "Bureaucrat," by Delmarva.Dealings

Cafe Classic: Want a Promotion? Start Reading Your Annual Report

Editor's Note: Looking to advance in your HR career?  Hoping to be first in line when the next promotional opportunity pops?  Then listen up: Margaret O'Hanlon has a Classic tip for you.

Every one of us wants to be considered a trusted advisor to our leaders. But how many of us have read our company's annual report?

I think I can hear a pin drop.

It's a good thing that no one's talking, too, because our work doesn't deserve even a "meets expectations" unless we read the annual report each year. Here's what we're missing:

What the CEO has publicly committed to do. Note to self: Have our employees written objectives that will roll up into this achievement? Who are the managers that are under the most pressure to deliver? Do they have the resources they need? Do they have the HR support that they need?

How the CEO and the Board talk to each other about the business. When strategy is communicated within the company what you typically hear are the headlines. These communications make you aware of the priorities, but don't imagine that you understand the strategy until you know -- and can talk about -- the reasons for the strategy.

Worried that you won't understand what the terminology and numbers in the annual report mean?

A. That's the best reason to read the report. You could use more professional confidence and savoir faire! 

B. It's easy to Google anything you're fuzzy about.

C. Most companies make a real effort to talk to the general business reader in their report. It's time to become one of those, don't you think? Plus you can learn so much, especially from the bigger companies, who often provide investor education along with their announcements.

Where the company is investing for the future. Can't get your leaders to think about talent management or even HR strategy? Follow the money. You'll find a lot of the information you need in the annual report.

If the company's heading in X direction, managers need to be equipped to support that strategy. If X division is expected to be the next big thing in terms of revenue . . .  Do they need more people? (Payroll and Recruiting) Will other employees want to be able to move into the division? (Policies and Salary Management) Are mergers and acquisitions on the horizon? (Planning and Staffing) Will there be greater emphasis outside of the U.S.? (HR Operations and Compensation Design)

Wondering why your ideas for X division or department are falling on deaf ears? It may be that they are not a focus for investment right now and you haven't noticed.

It's pretty straightforward, don't you think? If you're in Compensation but unaware of what's in the annual report, you really may not be doing your job as well as you could. On the other hand, if you're conversant with the annual report, odds are you're earning management trust and attention for your insights.

Margaret O'Hanlon brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm is re:Think Consulting. 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 everythingiscommunication.com. She is a member of U.S. Masters Swimming.

Managers Managing Pay

"Remember, with great power comes great responsibility." ... who would have thought that a Marvel Comics superhero trilogy would impart such wisdom on how we approach our responsibility as Rewards Professionals in supporting first-time people leaders. The famous words from Spider-Man wholly encompass the expected increase in accountability, when a one-time employee is appointed to “manager” status. 

For many, management is the next step on the career ladder.  It is a role that can mold and redefine the strategic direction of the organization and its workforce, for better or worse.  While we can go on many tangents about what defines an effective leader, as experts in total rewards we play an integral role in setting leadership, particularly first-time managers, up for success.  Doing so means compensation should be a key part of any management training or onboarding program.

Navigating pay becomes more complex when it’s no longer about your own, but instead involves the growth, development, and performance of an entire team.  So how best to manage? Listed below are a few examples to draw upon as new managers take on real-world compensation.

(1) Draw on personal experiences – sometimes, the best lessons are learned from the past.  How you evolve, grow and what you take from previous compensation-related experiences can help you step into the shoes of your employees today.  Consider the questions or feelings you had and the type of pay conversations you engaged in.  More often than not, your team may be struggling with the same questions you once grappled with.

(2) Assess the good, the bad, and the ugly – interactions with management can shape our leadership style.  Take what you can from the good ones, while avoiding the poor.  Consider the quality of the discussions that made pay, performance, and professional growth meaningful and inspiring.  These are the qualities to emulate, refine and make authentically yours.  On the contrary, keep in mind but at a further distance, the behaviors and conversations that impeded your engagement, sense of value and worth.   

(3) Get educated – if you had not heard of compa-ratio, merit increases, and or salary ranges before – well now you do!  As a manager, your repertoire of compensation terms will undoubtedly expand, and so will the decision-making, transparency, and handling of actual employee pay.  Time invested towards understanding your organization’s pay practices, policies, and the mechanics around performance management will be fundamental towards instilling a sense of pay confidence for yourself.  An inherent piece of the employee/manager relationship is becoming the point person in addressing salary questions.  This is why your “buy-in” to the organization pay program will be essential in being able to articulate a complete total rewards perspective to current and prospective employees.

(4) Know your team, get the facts – do yourself the benefit of understanding each employee's lifecycle; uncover their past, know their current positioning amongst the salary structure, and where professionally they aspire to be.  The context you have for each enables you to have the employee-centric conversations that are specific to their performance, their growth, and any pre-existing legacy scenario that you may have inherited.

Managing people, their pay, and the emotions that come with it can be tricky.  You will not be able to please them all, but if you lead with the right intentions then one can hope you will empower those that will come thereafter.

Reena Paul (CCP, GRP) works as a Senior Compensation Consultant.  She is passionate about all things “total rewards” and has experience in dealing with all stakeholders of an organization and strategizing optimum client-focused solutions.  A lover of data and the story it tells, Reena enjoys the exploration of presenting and discussing compensation with a fresh perspective.  Connect with Reena directly on  LinkedIn. 

Image source: iStock image with credit to Pablo Varela

Professional Unions in 2031

It has been ten years since we finally escaped the ravages of the COVID-19 pandemic. We try not to talk about it much, not only because of the human losses but also because of how we allowed people to separate us into factions that were delineated by what each of us seemingly didn’t have. One of the most interesting things was how it changed the way we work and get paid. I sometimes wonder how it could have been today if different choices had been made, but there’s no turning back now.

As the pandemic raged, many of us moved out of cubicles and into our dining rooms and guest bedrooms. We learned of the benefits of working without commutes and someone constantly watching over our shoulders. We also learned that many of us thrived in the social community that our workplace offered us. Most importantly, we finally started to realize what our companies had been trying to tell us (but not show us) about work-life balance.

Many of us were able to pick our kids up from school without the guise of a doctor’s appointment. Some of us no longer missed Friday night football games that we were unable to attend because of our long drive home. Many of us came to embrace our newfound flexibility and, yes, freedom, even as we struggled to figure out how to keep them if our companies called us back into the office.

We adapted more quickly than we would have guessed. By the end of the second year, the 50 and 60 hour work weeks and hour-long commutes that were the hallmarks of success in the 1990s and 2000s seemed pretty dumb to many of us. We had grown up in a world with no middle ground. Either you worked a million hours, answered emails on the weekends, and made your job your “family” or you weren’t successful.

When the call came to return to the office our employers seemed more than happy to return to the old paradigm. We asked for better pay AND more reasonable hours. They sometimes offered the former, but their business and staffing models depended on us working 9 or 10 hours a day. We asked for more time and better equipment to work from home, but many companies would not move away from the “command and control” structure built over 80 years of post-WWII results.

When our requests were not answered some of us refused to work, others demanded change. When our demands accomplished nothing we, for the first time as skilled professionals, rose up and organized. We saw how pay for other “professional” fields like pilots and baseball players raised wages and protected time off. We realized the pact between companies and their professional staff had been broken. We were no longer upper-middle class. We no longer took relaxing, work-free vacations. We no longer worked “full-time” we worked “all the time.” So we organized.

It is funny to look back at how short-sighted and self-interested the leaders of those companies were. It would have been so easy for them to adjust their model to deliver more pay and balance to employees and slightly lower returns to the market and executives. They swore the changes we wanted could not be done. It turns out the success they wanted couldn’t happen with us. In the end, they lost that battle and lost even more in the long term.

Sadly, we also lost in the long term. The current world may provide more balance, but it no longer provides the leveraged upside that some of has had from equity compensation. It is now nearly impossible to start a new company without tons of money in advance. Yes, we have more in some areas, but we all have less in many. It would have been so easy for companies to have made the right moves in 2022 and 2023 to avoid all of this. But we are where we are and it’s time for me to head off to my kid’s baseball game.

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.