Compensation Cafe

Thank You for 10, 360 and 180,000 Reasons

This post is about recognition. The recognition of each of you reading this post, and anyone who has ever read a post on the Compensation Café.

Writing for the Comp Café is one of my favorite things. The discipline of finding ideas and turning them into 5 minutes of something that is, hopefully, interesting is both a challenge and a joy. Each article is an addition to a compendium of thoughts and ideas that have been shared by almost twenty regular writers and tons of guest writers over the years. As we dig into both the holiday and busy season, I want to say THANK YOU.

I have been writing posts for about 10 years. Most months I have written three or four posts, meaning I have written somewhere around 360 posts over the years. Luckily my friend and Comp Café Editor, Ann Bares, makes us keep our posts to around 500 words. Using these basic numbers, I have written somewhere around 180,000 words on pay and rewards! That is a heck of a lot of metaphors and stickman images.

I want to thank each and everyone one of you who has taken the time to like, share or even comment on the posts here at the Café. Knowing that someone is actually reading these things makes it far more worthwhile. It would be no fun to think we were just yelling into the wind.

Even more importantly I truly want to thank each of you who have sent me a note, asked me a question or just walked up to me at some industry event and said hi. Every time this happens, I excitedly tell my wife about it before the day is done. Every time it happens, I know that I have contributed, just a bit, to the industry that feeds my curiosity and my family.

I also want to thank Ann Bares for her amazing thought-leadership and keen editing eye. Her attention to detail and amazing writing are the most important aspect of this blog. Every other writer here is also amazing. I read their posts just like you do. I learn from them just as often as you do. I also know how much time they spend crafting their posts to ensure you receive great quality entertainment and information. (It ain’t always easy to make pay and rewards fun, pithy AND interesting.)

While this is a site focused on pay and rewards no one here makes a penny from their contributions. Not the writers, not the commenters, not the readers. So why do we all do it? I think there are a few reasons.

First, I think we all want to be better and perform at our potential. It’s a lofty goal that requires effort that is a reward in itself.

Second, we actually find this stuff interesting. We know that what we do is important to companies and the people that they employ. People’s livelihoods literally depend on us doing a good job.

Lastly, we like to be part of a community. A group of professionals who spend 3 to 5 minutes a day on a common topic, with a common cause, in an increasingly virtual and disconnected world. The Comp Café provides a small thread that ties all of us together brings all of us to the table for a quick sip of caffeinated information. 

Thanks again for stopping by and I hope you will come back and tell when you agree and disagree with our unique perspectives. Have a great Thanksgiving and we will see you after the holiday!

Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He works as Managing Consultant for FutureSense. He has three metaphors for every occasion and is a leading expert on incentive plan and equity compensation issues. He has written several industry resources including the only 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.

Manager Title or Director Title Distinctions

Manager or director? That is the question.

Titles communicate level of responsibility over a work function, so the process by which such labels are determined is important to compensation professionals. Since title has an immense effect on pay, status rank, power, authority, prestige and other elements of the total remuneration package, title assignments can be one of the most contentious elements in the human resources profession.

Manager versus director is a frequently encountered challenge. Whether a particular job is labeled one or the other depends on certain specific features. The category distinctions that permit differences to be clearly and consistently defined between manager and director as a title are many and varied. This list of conventional "cutters" may not be totally comprehensive or universally applicable, but it probably captures the most commonly used variables and allows some general observations.

• industry
• positional sequence of the modifier
• employer tradition
• sensitivity to unit size

Industry: Specific industries treat General Manager and Project/Program Manager titles as exceptions, giving them unique ranks and meanings. Public utility GMs can hold top executive powers over subordinate department directors and functional managers. The actual work of PMs ranges widely in job content and authority in different industry applications like technology, MIS, construction, R&D even HR. In most enterprise types, manager roles carry fairly consistent job values regardless of unit size. Industry also determines the size metrics that most accurately predict executive compensation.

Modifier positional sequence: Exactly where the word "manager" appears in the benchmark occupational label makes quite a difference. Many managers are "a manager in the field of" (one of many peers at the same organizational level) rather than the only manager over that entire organizational function. A Manager of Accounting might be one of many at a peer level, each specializing in a discrete slice of the general accounting occupational pie. The Accounting Manager, on the other hand, controls the whole thing. Some titles supervise numerous people while deferring to higher authorities for direction over the section. Others are individual contributors handling a responsibility area with few if any directly-reporting subordinates.

Tradition: Internal equity is always unique in every enterprise. Relative rank and organizational status doesn't always track with an outside economic reality where pay is set by external open market transactions. Surveys use benchmark titles because they can't capture individual variable practices for summary analysis any other way. Variable historical customs can create confusing title matches, depending on the balance of internally determined value between the roles assigned by top management. Two job titles may look quite similar but can be dramatically different in pay classifications and organizational status level. Accept that your tradition may not translate well for solid comparisons with other peer employers.

Size: Double the organization size and how are the incumbents in each title handled? Managers are typically spawned clones where fission takes place after great growth. For directors, growth brings an expansion of the same person's leverage platform.  When an organization gets a lot bigger, more managers slots are created. Growth has different effects on size-sensitive senior management ranks like directors or vice-presidents. Those true executive incumbents see their power and pay expand. The sole individual department head or functional officer remains the same person while the value of their expanded directorship or VP role increases according to an industry-unique equation driven by size. Those senior executives often end up supervising many more subordinate managers, too. 

As the organization gets bigger, you typically add more managers who are each employed at about the same price to do about the same thing with a slightly different twist. With growth, most directors and VPs remain the same person with much higher pay directly related to the size they impact.  Instead of adding more executives, you instead usually give the same individual incumbent director or VP greater bottom line leverage. 

OK, now where am I totally wrong? What important broadly conventionally accepted practice have I missed?

E. James (Jim) Brennan, former Compensation Editor of the Personnel Journal and Senior Associate of pay surveyor ERI, recently returned to consulting. Author of the Performance Management Workbook and frequent expert witness in executive compensation trials, Jim also serves on the Advisory Board of the Compensation and Benefits Review.

"Stony Brook University" image by Sam Levitan, courtesy of Creative Commons

The Carnival of HR: The Big Tent of Total Rewards

The Compensation Cafe is pleased to present this special edition of the Carnival of HR, which we have dubbed the Big Tent of Total Rewards.

Why Big Tent?

in volunteering to host this special Carnival, we hoped to introduce our colleagues and readers to the ideas and perspectives of other HR bloggers.  The unique value of the blogosphere is that you get a fresh, immediate, unfiltered (and yes, sometimes irreverent) take on the reward issues of the day.  The posts we have to share with you today present a wonderful complement to our everyday Cafe content.  While we typically focus on core compensation issues, the writers featured here today (most of whom are not compensation specialists) bring essential points to our attention and remind us of the many important questions that surround reward design.  These broader aspects remind us that Total Rewards, done right, is a Big Tent -- and that it touches, and is touched by, a wide range of practices and considerations in the bigger organizational system.  For this, and for those who share a sampling of their thoughts and ideas with us today, we are grateful.

Cue the Carnival.

Rewards and the Job.  Suzanne Lucas, aka Evil HR Lady, spins a cautionary tale in Are You Biased Against Dirty Jobs?, warning about the risks of devaluing jobs that may not be considered high impact, but provide essential infrastructure.  On a related note, Chris Young of the Human Capital Strategy Blog reminds us that The Best Employee Reward is the Job Itself.

Rewards and the Free Agency Reset.  Fistful of Talent's Andy Porter throws out a radical idea for regularly testing the market value of employee skills in Why Your Company Should Adopt a Free Agency Period.

Rewards and the Law.  Wage and hour law compliance is challenging - and critical - these days, and it is often the seemingly little things that trip us up.  HR Compliance Guy Mike Haberman, who blogs at HR Observations, sounds a warning note in his post A Very Expensive Lesson in Not Following the Rules.

Rewards and Immediacy. Ben Eubanks of Upstart HR shares some wonderful lessons about reward timing drawn from his wife's classroom experience in Rewards and Incentives for Nine Year Olds.  Take that, Alfie Kohn!

Rewards and the Importance of Acknowledgement.  Jason Womack illustrates the power of acknowledging peoples' contributions, even in small and simple ways, in his post Building Acknowledgement into Your Day.

Rewards, When Acknowledgement is Not Enough.  Acknowledgement and recognition are great, but sometimes it is also important to share the spoils of success with those who helped create them, says Tom Delaney of Brownie Points in his post The Shelf Life of "Thank You" and "Great Job".

Rewards and the Unexpected.  Icicles forming in the Arizona desert?  You almost have to wonder, as WorldatWork's Ryan Johnson's muses in his post Here's Something You Don't Often Hear from Business Leaders: "We're Overpaid".

Rewards, Intrinsically Speaking. Alex Raymond of Kapta Systems examines the drivers of engagement for today's workforce and highlights the important role that intrinsic and psychological rewards play in his post How to Increase Employee Engagement with Rewards.

A Reward within a Reward? In an insightful post about 401(k) plans, The 401(k) Match is Returning, But is it Effective? WorldatWork's Lenny Sanicola examines the role of the employer match in driving plan participation and savings levels.

Rewards ... or Not? John Hunter of the Curious Cat Management Improvement Blog challenges conventional reward practices in Motivation, Rewards, Performance Appraisal and Your Career, a post highlighting his responses to an interview with Dan Pink.

(When) Rewards Are Not Enough.  In his post Sometimes the Answer is No, Paul Hebert of Incentive Intelligence reminds us that are simply some problems - and some people - that no reward effort can fix.

The Greatest (Reward) of Them All.  Wrapping up the Carnival line-up, Wally Bock of the Three Star Leadership blog chides us not to overlook the "power tool" of employee rewards in his post The Most Potent Reward.

In closing, special thanks go out to all the bloggers who shared their posts with us, and to the Cafe's own Carnival team of Margaret, Chuck and Jim (without whom, this particular Big Tent would have never have been raised).  The regular Carnival of HR schedule continues with the next edition going up in sunny Florida on September 26, courtesy of Heather Vogel, at the HR Whisperer.   Submissions are due in to to heather at twovogels dot com by Monday, September 24th!

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

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 the President and CEO of Performensation an independent compensation consultant focused on the needs of small and mid-sized public and private companies. Dan’s unique perspective and expertise includes equity compensation, executive compensation, performance-based pay and talent management issues, Dan is on the board of the National Center for Employee Ownership, a partner in the ShareComp virtual conferences and the founder of Equity Compensation Experts a free networking group. Dan is frequently requested as a dynamic and humorous speaker covering compensation and motivation topics. Connect with him on LinkedIn or follow him on Twitter @Performensation and @SayOnPay

Curiosity May Kill Cats, but It Saves Compensation Professionals

Do you ever wonder why you are reading this article? No one is paying you to read this. Your boss will probably never even know that you read it. Why take a few more minutes out of your busy day for something that only you truly value?  The answer is simple. You are a curious person. (Fair warning this is a “soft” article with no statistics or compensation rules)

We are always told that curiosity kills cats. The theory is that it gets cats into trouble that eventually cause their demise.  I would augue that it does the opposite for compensation professionals. Compensation is as much an art as it is a science. This means that even though there are great ways to do almost everything, there are very few absolute ways to do anything. It is curiosity that can make, or break, someone in our profession.

We all must keep up with rules and regulations. This requires less curiosity than it does persistence. Sometimes new rules require us to change processes, communications or procedures, but we are seldom forced to change our compensation philosophy or basic structure. Curioisty is much bigger than compliance.

Curiosity is the key to evolution. It’s not just learning about your peers or industry trends. It is about digging in and figuring out how you can apply a mix of new knowledge and best practices to give your company, its shareholders and employees an edge. The need to know new things and explore different paths is what allows you and your company to stay ahead of the competition.

The best compensation departments aren’t checking to see if their programs are correct.  They explore new paths so they can be better. Many of us look to justify our past decisions.The very best look for why they aren’t making new decisions. Given a choice to act on what they already know and the potential for new information and improvement, they choose improvement. These are the companies who create the next “best thing.”  They are also the professionals who we find publicly celebrating, instead of defending, the results of their programs. 

So how is curiosity inspired? While it is against our professional nature, curiosity is seldom motivated by compensation. It is most often motivated by the personal and professional change it can bring. You and everyone on your staff want to know that your ideas count.It is easy to create this culture.

Provide an open environment where the following phrases are outlawed:

1)     We’ve never done it that way.

2)     That probably won’t work.

Replace those curiosity-killing statements with the following questions:

1)     How would you see that working for us?

2)     Can you do a test run and show me the impact?

Once you have an environment where curiosity is valued and recognized, your staff will instantly seem much smarter and more engaged. You will find yourself working amongst solution creators and game changers and your own work will improve as well. Curiosity is the single catalyst that costs nothing and inspires anything. It may not be ideal for felines, but it does wonders for compensation professionals.

Dan Walter is based in San Francisco, CA and is the President and CEO of Performensation an independent compensation consulting firm focused on the needs of companies not in the Fortune 1000. Dan’s unique perspective and expertise includes equity compensation, executive programs, performance-based pay and talent management issues, Dan is on the board of the National Center for Employee Ownership, helps create ShareComp, a virtual conference addressing equity compensation and founded Equity Compensation Experts a free networking group with more than 1,100 members. Dan is also in high demand as dynamic and humorous speaker. Connect with him on LinkedIn or follow him on Twitter @performensation.

Compensation Cafe One of the Acts in this Edition of HR Carnival!

Holiday celebrations are underway because Compensation Café has been selected once again as part of the global confab of HR thinkers, HR Carnival! 

Our teammate, Margaret O’Hanlon, offers most timely advice for all of us in “Can Your CEO Reignite the Passion in Your Relationship?”  Employee commitment is at an all time low in most companies, and company strategy feels more like some boring work plan that employees have to slog through.  Margaret reminds us ‘tis the season to turn our eyes to a promising future. Help your leaders reignite employees' passion for your company's future with this practical guidance on year-end communications.

Visit with Margaret and more at the HR Carnival, where you can, "Pour yourself a large caffeinated beverage, indulge yourself with some good chocolate and [enjoy] a whirligig of the best HR thinking from across the globe." 

The Carnival of HR ... Gone Global!

The newest edition of the Carnival of HR is up, hosted by Bangalore blogger B.P. Rao of People at Work & Play.  The Carnival this round features a deliberate global angle, as B.P. has worked to focus it on issues that are relevant across the globe.

For an impressive, thought provoking and international selection of solid HR thinking, make time for a stroll through the Carnival today!

Image: Creative Commons Photo "Elk Rapids - Carnival II" by ktylerconk

It's the Carnival of HR!

The newest installment of the Carnival of HR is up at Chris Young's Maximize Possibility blog. 

Check out the 21 great posts from all over the talent-sphere, including one from the Cafe's own Darcy Dees!

Do it!

Image: Creative Commons Photo "Arlington County Fair 2008" by Cliff1066