Compensation Cafe

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.

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.

Does Discretionary = Discriminatory?

ESG (Environmental, Social, and Governance) goals have become the rallying cry of investors and board advisors. DEI (Diversity, Equity, and Inclusion) goals remain a key issue for Human Resources professionals. At many companies, there is still a widespread allowance for discretion in setting pay levels, variable compensation incentives, and equity compensation awards. Discretion is a precarious thing. It allows companies to recognize great talent or performers, while at the same time allowing for potentially discriminatory practices. Getting your arms around this topic may save you from a load of hurt in the future.

Most leaders and talent acquisition professionals want the autonomy to negotiate with prospective employees. This gives them the ability to create the best value proposition for both the company and the individual. The majority of HR and compensation professionals seem fine with discretion and many do not have a formal review process to ensure the final offer rationally fits within the pay structures of the rest of the company. Unfortunately, I have seen base pay numbers that range from $60K to $200K for the same role! So much about total rewards depends on the foundation of Base Pay. When the foundation is so differentiated, it is nearly impossible to have other pay elements make sense.

It is still a common practice for companies to offer discretionary “bonus” programs. These programs often fail at their intended purpose. The lack of transparency means that differences in amounts can seem like they are based on favoritism (and they often are.) The programs also suffer from “recentism”. Work done in the most recent quarter is unconsciously weighted more heavily than worked performed earlier in the year. Like a kid who does all of their homework the last week of the school year, this allows people to work hard and campaign during “bonus season” and be rewarded like they did great all year. Combining something that may not seems fair with an ability to manipulate results seldom creates a satisfying result.

When you add equity compensation as a pay element the results skew even worse. People like round numbers, so grants under up being in round numbers. How much more can 2,500 shares deliver than the standard 2,000? Using Amazon as an example: In 2016 Amazon stock was around $1000/share. Today it is about $3,200/share. 500 additional shares would have created an additional $1.1M over the last five years! An extreme example, of course, but not that extreme when compared to the relative changes in values between an early-stage pre-IPO company and the same company after its IPO.

Here are some things you can do to get started.

1. Limit the level of negotiation and discretion for Base Pay. This is true for pay above and below your target amounts. Just because you can hire some for far less than the market, doesn’t mean you should. Unless paying below market is a common practice for your company, it is likely to result in an unfortunate dispute in the future.
2. Put more structure into your annual bonus programs. Educate your managers on how they can and should use their budget. Perform peer reviews or approvals to ensure that bonuses aren’t based on relationships or recent activities. Consider creating a real Short-Term Incentive plan with measurable goals and related payout levels.
3. Be far stricter about equity award sizes. Provide strong, understandable guidelines. Make sure everyone involved understands the potential impact of a differentiated grant. Scale standard award sizes to flatten differences in base pay for the same job level.

Without an underlying current of ESG and DEI concerns unchecked discretion has been a real problem for as long as people have been paid. With the overarching goals, audits, and visibility that come with better governance and concerns about discrimination and fairness, unchecked discretion is a time bomb waiting to ruin an upcoming year for you and your company. Getting ahead of it before the new year should be a goal for everyone in Human Resources and Compensation.

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.

A Primer on Job Architecture-Implementation

The first part of this article covered the types of organizations that use job architecture and why and the second part is an overview of the project components.

Before we get off the subject of job architecture, I thought it would be useful to include some "footnotes" on things to look out for as you develop implementation plans. It's rare when you can foresee just what will happen during implementation, but these items stand out as lessons learned, sometimes the hard way, by those who are starting off on a job architecture project.

• OMG -- Because there is so much data involved with this type of project, make sure you start with reliable templates for capturing, using, and communicating the data. You don't want to spend unnecessary time transcribing anything, so you need to have a software approach that is accessible by senior management, managers and human resources. Data capture needs to easily transform into reports. You also need to recognize from the outset that you may not be giving employees access to the same content, so you'll need time and resources to design employee access before you rollout the project.
• Senior time management commitment -- I have rarely been involved in a compensation project that demands as much time from senior management as job architecture. Once they realize what they are going to get out of it, they are likely to be willing, but don't make the mistake of sugar-coating it. You need to build a lot of support before you initiate this type of project. Emphasize what their employees will get out of job architecture and how much easier it will make management decision-making.
• Unspoken rivalries -- The leveling process is likely to uncover some strong feelings about issues of job value and leadership like: whose manager is really an entry-level manager vs. mid-level manager vs. senior manager; whose "expert" is more valuable to the company; where entry-level really starts for professionals. If that happens, see next bullet.
• Resolution is inevitable -- Don't be surprised if you hit a period of "itchiness" among your managers. This is common in job architecture projects, and most managers can settle down into the appropriate mindset as soon as they start to admit all the benefits to themselves. Plan to work closely with your senior management team, individually and as a group, and you will make strides (and build a strong perception of HR leadership).
• The (wo)man who knew too much -- Keep in mind that as you work through this project, you will likely become a pointy-headed nerd when it comes to job architecture. You will have learned so much and will have developed deep emotions about its value. Recognize that there are large numbers of people who are nowhere as absorbed by the wonders that are in the offing. I have seen many HR people who are blind to this, and they end up undermining good feelings for the job architecture because they are too wrapped up in it when they talk with others. It's essential to plan how you can influence each set of stakeholders -- see the next bullet.
• Rely on employee skepticism -- You know how great job architecture will be, but employees cannot just automatically buy in. For them, it's the next "flavor of the month" until you show them otherwise. As with every other compensation change, they'll be wondering what you're hiding. You will change their perspective when you show them what's in it for them. You can't expect them to take your word for it. You have to recognize that support will be generated not when you announce the program, but as you roll it out. As the year goes on, employees will become true believers. The effectiveness of the rollout will really influence employee trust -- see the next bullet.
• Talk and walk -- If your communications make the job architecture seem complicated, you will lose your footing with employees and it will be difficult to get it back, even with management support. Do your best to simplify, simplify, simplify, both the explanations and the administration of the program. This is a perfect opportunity to use an employee beta test group to field test your communications -- you don't have to worry about confidentiality, since managers will have been talking about the program during the design phase.

You can see that it is important to have enough time to do the rollout thoughtfully. I have seen people try to rush it, but this time there really is too much information to pull it off at the last minute. You will have done such great work to develop the job architecture that you should put the time into communications so that Compensation can earn the accolades it deserves.

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.

SPAC Attack: Bridging the De-SPAC Gap

SPACs have many critical inflection points, but the De-SPAC process is truly special First a SPAC is formed and goes public. Then the SPAC finds you, a beautiful company in the rough, just bursting to experience growth and success. Then you both agree to join and beat the world. You announce your intentions in a big splash and the De-SPAC process begins.

It’s kind of like when two young people get engaged early in a relationship and hoped that their parents and their lives would bolster them through a successful wedding day. Most of the time it works, but some engagements end because the additional scrutiny proves the pairing will not work. Others end in someone getting left at the altar. Successfully navigating this period requires resolve, enthusiasm, openness, and some luck.

The De-SPAC process usually runs from 3-5 months. During this time both parties work to convince current and potential shareholders that the union will work. Regulatory bodies like the SEC also get involved and provide their opinions on the impending marriage. The companies involved may also look to bring in additional funding via a PIPE transaction. There is a ton of work and if things go wrong, the deal falls apart.

Much of this is out of the hands of compensation professionals, but there are areas where comp pros must be on point.

First, you must communicate with your employees. The De-SPAC process starts when the world knows about the deal, this means your employees will know. They will be curious, anxious, excited, confused, and looking to the company to fill in the blanks. This is a GREAT time to use communication professionals. Get some help!

Next, everyone will be watching to see if the company is performing well. This means no major snafus in the execution of incentive plans and no major employee relation issues. If there are important compensation issues on your “to-do” list, you need to get the support you need to quickly address them. In today’s environment, this may mean addressing Diversity, Equity, and Inclusion issues. It may include clean-up work on equity awards, better clarity and automation of your annual or sales incentive plans, and reworking of your 401K and other benefits plans. Get some help.

If the De-SPAC process is successful, current and potential shareholders will support the deal. Regulatory bodies and auditors will find the facts acceptable, and employees will remain supportive and enthusiastic. You will become a publicly traded company and your stock price will rise.

If the De-SPAC process fails shareholders will redeem their investments, basically demanding a refund before the deal is done. Your company will not become publicly traded and there is a real risk that your company will not survive at all. Being left at the altar of a SPAC deal can make it hard to find new investors as a private company.

For those people who have gone through an IPO, the De-SPAC process can feel familiar. The excitement of potential is balanced with the palatable risk of failure. The big difference is that failed IPOs usually have much softer landings.

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.

Cafe Classic: Pay Oppression and Other Toxic Reward Practices

Editor's Note: Today, via Jim Brennan's Classic post, we look at rewards that don't ... or (worse) create problems and inequities of their own.  Bet you have examples of your own to share!

When adding a new maxim to my ever-expanding list of Brennan’s Laws, I rediscovered this one:  #13 under Fair/Competitive Pay. 

Blocking senior workers from making deeper range penetration makes it probable that new people with impressive credentials but no proof of output capability will be hired at salaries well above senior incumbents with well-established abilities.  That’s so much worse than pay compression that it might be called “pay oppression”!

That concept seems worthy of expansion.

Granted, slowing the compounding salary growth of veteran workers seems to be more the exception than the rule.  Most organizations (especially large bureaucratic monopolies with long traditions of inertia) tend to strongly support near-infinite pay progression opportunities for senior staff.  Raising grade ranges despite flat market movement and granting cash payments in lieu of base increases are always popular topics in compensation forums.  The bulk of payroll growth generally tends to be expended on employees holding many years of service in the enterprise.  Those long-timers with substantial job seniority usually earn the most.  Sudden priority needs for new talent to be hired into comparable peer positions who demand much higher starting rates than veteran incumbents can come as a shock. 

Maybe that’s why breaking with a comfortable pattern frequently results in bizarre behaviors.  Like freezing pay for those earning above average … or beyond the range midpoint, pay norm or classification control point.  Failing to periodically adjust the relative lead highly experienced workers hold over their less seasoned job peers can also lead to serious problems.  That is a particular concern today when States ratchet minimum wages higher than the Federal requirement.  Even the national Fair Labor Standards Act faces revisions that will affect internal equity considerations.  New challenges seem to come fast and furiously.

Another problem could come from overestimating the ability of pay that was quite generous some years ago to remain as sticky today as it was then.  Misallocating scarce money remains a constant threat.  Continuing to tie unique jobs to low-paid internal benchmark matches when the incumbents can command  premium rates for the same services elsewhere is also hazardous.  There are many mistakes about compensation that are easy to make.

For example, assuming that keeping a key employee secure during a period of severe headcount reductions will make up for freezing their pay for the next few years could be dangerous.  A need, once satisfied, is no longer a motivator.  Gratitude doesn't last forever.  Once the fear of displacement has been overcome, people again expect pay increases and resent being taken for granted.  It gets even worse if they are required to train underlings who continue to get increases while they are expected to remain content without similar raises. 

Similar “crimes” against equitable justice might be found in many compensation systems.  There are a million reward schemes called “unfair” because they allow some an advantageous opportunity not offered to everyone.   Quite a few offensive pay practices were published some years ago by H. R. Screwtape in the classic three part series, “Rewards that Don’t”.  Posted on the WorldatWork total reward professional society’s website for years, it was a sarcastic primer for the design and implementation of dysfunctional compensation methods still found at many employers today. 

What other examples of toxic pay practices and perverse incentives drive you crazy?  Bet the rain falls on others, too.  Share your horror stories.  Remain anonymous, if you wish; or send your submission to me privately so I can post it safely. 

While such venting may not improve the bad situations, catharsis always makes you feel better.  Besides, you may see some examples that give you better perspective about what is REALLY bad. 

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience in most industries.  After corporate HR posts and consulting CEO roles, he was Senior Associate of pay surveyor ERI before returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook), speaker and frequent expert witness in reasonable executive compensation court cases, Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Image "Hand Hold Hard Shiny Metal Chain Isolated On White Background" courtesy of khunaspix at FreeDigitalPhotos.net

Make Milestones Matter

Isn't this the time of year when major projects are planned? For example, if you're designing a new pay or sales compensation program. These projects take three or more months to complete and involve large, diverse project teams.

Like every project, you will start with the end in mind, providing an overview of the deliverables, implementation scope and outcomes to be achieved. While this first step takes a bit of time, describing target problems and outlining solutions is usually the easy part of project planning. After all, these are the issues you've been worrying about. Plus, you've had to pitch the project, so you will probably already have much of this work in your back pocket.

The next step of writing a project plan takes a different set of skills and focus. You need to understand the work process well enough to break it into steps and identify the staff, time and other resources you need. This demands a strategic view, but the key strategic decisions actually come when you select the points in the workflow which signify that a major event in your progress has occurred. Selecting these milestones involves judgment, since you're choosing multiple points when your team will be willing to measure progress and talk about it outside the project. 

Milestones are useful for monitoring and controlling the project work but it's important to realize that their role is bigger. Because they act as signposts, they are visible both to your project team and to management. And with bigger budget projects, they can signal the points where go/no go decisions will be made about your funding.

On that point, don't kid yourself. Upfront approval of your project doesn't guarantee unwavering support throughout. Projects can and will be stopped by your project sponsors or senior management when milestones are ignored or signal poor clarity of purpose. I've seen it happen.

Many milestones involve an update meeting with your sponsors or senior management. But even if you don't have a milestone presentation scheduled, realize that there are ongoing discussions at upper levels about how the team is progressing -- these happen with or without your team's knowledge. To keep your communications crisp and meaningful, design a dashboard that you (and your sponsor) can use to visualize progress. Most reviewers prefer data presented graphically, so visuals like dashboards send powerful messages about your project management achievements. 

Also, at the beginning of each stage of the project, imagine what you will be presenting once you meet the next milestone. Identifying ahead of time what your stakeholders will be most eager to hear about (even though it will be weeks from now), will give you a framework for keeping track of the details that you will be presenting.

Your presentations will not only be about data or plan design. Your sponsors will want to know how your team's decisions were made. You should plan to report inputs you've obtained from other departments and interim judgments that have been made as the project unfolds.

Remember, everything we do in compensation is communication. Milestones happen to be one more example. As you achieve each milestone make sure you deliver enough details so your sponsor can answer effortlessly when an executive asks, "How's that project going?"

Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. 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.

Cafe Classic: What Does Career Mean Where You Work?

Editor's Note: Compensation structures and practices work best when they directly reflect the organization's intentions regarding employee careers.  In this Classic post, Margaret O'Hanlon provides helpful perspective on what careers mean to employees, which is not always in sync with how we in compensation view them.

Employee development. Career development. Career advancement. Employees have told us they are all for every one of them -- both to get them in the door of your company and to encourage them to stay. HR has distinct definitions for each of these terms, even though we often use them interchangeably. But what do employees mean when they talk about career opportunity?

If your compensation work addresses career issues, it would be worthwhile finding out. Employees can mean very different things when they talk about career opportunities, depending on their area of specialty and vision of a career. Preferences often break down by age group as well.

Career ladders are Compensation's go-to solution for techies and finance specialists. It is traditional in those fields to know what your next career step will be and the typical time lapse until your next promotion. In some organizations with an up-or-out culture, the career ladder helps you understand whether your job prospects are running out of steam, too.

Employees who have chosen and prepared for a specialty can conjure up a clear picture of how to navigate forward, and expect their company to meet their expectations with some transparency. But we've also been hearing a different story from new hires who have recently left school and are searching for a niche in the business world. Career ladders might help them see what the future could offer, but they are often unsure that it's the future they've been hoping for. It may be a poor employee development investment to build these employees' job skills for the next rung on the ladder, if they actually want to continue working for your company but in a different capacity.

Instead of climbing a ladder, what many of these employees are looking for is job mobility. By learning how they contribute best and finding areas of the business that are intriguing, they want to grow in value to your company. No straight lines for them, which means they need your help even more than the career ladder folks. They (and you) need to crack the code to identify the skills and knowledge that are transferable from one of your job families, job functions or divisions to another.

Here's an example. In some companies, savvy entry-level customer service reps could parlay their knowledge and experience into jobs in Inventory, Sales, Marketing, Training and so on. Can you help employees navigate these types of side trips? Do you have programs, or at least job descriptions that speak this type of career language? For many employees, choices like these will end up turning into a career. At the very least, cross-functional experiences increase the employees' value to your organization.

Think strategically about the roles and talent your company needs to succeed, ask employees what kind of opportunities they are looking for and decide whether you are actually spending the money and taking time to provide the "dynamic career opportunities" touted on your career website.

Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. 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.

Cafe Classic: Redesigning Work to Create More Mutual Value

Editor's Note:  Prompted by conversation around my post on this topic a few days ago here, we bring you Jim Brennan's Classic on why work redesign should be a key competency for Human Resources and Rewards professionals.

For HR to become a valuable business partner clearly helping top management improve the bottom line, the total rewards function must take the initiative and act productively.  Reformatting talent into more mutually valuable combinations will solve many important issues. 

Here are the typical problems:

• HR feels left out from “the big table” where key decisions are made by top management.
• Supervisors (including all people-managers) see HR as unhelpful or an obstacle.
• Employees want higher pay but feel blocked by the compensation department.
• Scarce skilled talent and highly productive workers leave for better opportunities.
• Jobs remain substantially the same (although tools change) for decades.
• Public social pressure increases for higher minimum pay rates.   

At the same time, organizations want improvements:  i.e., to increase productivity, efficiency and profitability, while enhancing employee engagement and improving public support for their brand. 

Let’s look at all these various challenges as opportunities for an all-encompassing single solution.  Solving multiple negative problems while simultaneously satisfying numerous positive objectives is always an excellent idea. 

There is rarely any valid economic excuse to pay a lot more or less than necessary for any combination of work output expectations called "a job."  If you want to pay more, why not make the job worth more?  Rather than argue over excessive wages, change the economic formula to your advantage by redesigning work into jobs worth greater amounts.

Combining enough valuable output deliverable elements from two low-paying jobs to form one good-paying job can be smart, cost efficient and socially praiseworthy.  Simply paying more than the market requires for unskilled labor may win you praise from some, but any unnecessary economic cost passed on to the owners or shareholders will usually earn their displeasure.  Instead of even retaining a collection of extremely simple work tasks bundled into a job that pays too little to live on, why not instead upgrade the functions, blending the component parts until they support a living wage? 

That process is not very different from the result of many job reclassifications. When you confirm that an incumbent has "growed" her role from A to D, you often conclude it deserves a higher compensation level.  In that case, HR passively reacts after "suddenly discovering" that someone has enhanced his/her job into a new value category.  Instead, you can take the initiative to deliberately design a richer combination of tasks and responsibilities.  Finding a more powerful leverage point or a superior bottom-line context application for the KSAs already available in your talent pool is a great way to add value to the enterprise.

Another approach might be to eliminate minwage “jobs” by making those functions part of orientation, probationary periods and on-the-job training (OJT) for “living wage” jobs rather than stand-alone dead-end positions.  Or reserve them for developmentally disabled workers or employees temporarily on limited duty status, maybe.

Reshaping work content can meet many needs.  A proper, appropriate and aggressive use of total rewards tools can be much more cost-effective to the employer than arbitrary minimum wage increases.  It also should be less expensive and less organizationally traumatic than a re-engineering project conducted by outsiders, too.  I know many of you have "re-bundled" or "reconstructed" jobs, even if you called it something else, like “work transformation,” “job design” or “career enrichment.”  What did you call it when you tried this?  And how did it work?

Or has this process contributed to job elimination, outsourcing and off-shoring?  There seem to be more questions than answers, but these questions must be asked before they can be answered.

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience in most industries.  After corporate HR posts and consulting CEO roles, he was Senior Associate of pay surveyor ERI before returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook), speaker and frequent expert witness in reasonable executive compensation court cases, Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Creative Commons image "Building Blocks" by Eran Sandler

Essential Workers, Higher Wages, Value Creation and Work Design

The path to value creation, according to a number of private equity executives (like the one who wrote this Harvard Business Review article), is through return on invested capital (ROIC).  Indeed, the best way to create real value in a business -- this author says -- is by making smart capital investment decisions.  And yet, at least according to his data, few CEOs are skilled at capital allocation.

This should interest us, as HR and reward professionals, for a few reasons.  First of all, the obvious one: that the biggest category of investment for most organizations is employee compensation.  Secondly, because proactively managing that investment to maximize return -- and create real value -- ought to be top of mind for any of us who fancy ourselves true "business partners."  Thirdly, because it bears directly on a category of compensation topics that has captured a lot of attention over the last several years and renewed interests more recently as a result of the COVID pandemic. In this topical category I would include the ideas of fair and just wages, living wages, the attention to minimum wage laws and (last but by no means least) the renewed appreciation for essential workers we all gained through the past many months.  As organizations and particularly essential service providers struggled to stay open during the early months of the pandemic, the criticality and vulnerability of front-line (often hourly) workers became obvious.  This prompted many immediate measures, including hazard and premium pay implementation.  It also raised longer term/bigger picture questions about the distribution of reward dollars and greater capital investment in this vital segment of the workforce.

Some perspective.  A number of organizations made press in the past 5 years or so for the decision to voluntarily raise the minimum wages of their employees.  In addition to Starbucks, Walmart and Gap, Aetna drew attention for the distinction among this group of being a financial services firm rather than a retail enterprise.  While there are a lot of things to like about these initiatives, one of the biggest positives from my point of view is that because these decisions were self-imposed and (presumably) a product of internal analysis and consideration they are more likely be sustainable over the longer term.  That isn't to say that there will be no unintended consequences to offset the positives, as these actions like these ripple through the labor market.  Our economic system is way too complex and has too many levers being jiggled to assume otherwise.  There seems a greater likelihood, though, that they can be successfully absorbed, managed and even turned to advantage by the "host" organizations.  Because ultimately, a move to disrupt the cost structure of an organization is more likely to succeed if it is to the advantage (or at minimum, not to the disadvantage) of all stakeholders.  This includes but is not limited to all members of the workforce, owners/investors and customers.  All these are seeking their own returns, intangible as well as tangible, and their expectations cannot easily be ignored.

Many will reference the efficiency wage theory -- the notion that simply paying workers a higher wage should lead to increased productivity -- as the rationale for these wage-boosting decisions.  Perhaps this can be banked on, but I would submit that the astute among this vanguard (and I suspect they are all astute) have actively considered and are pursuing steps to maximize the positive return of these enormous investments.  One of these is likely work design.

And that's where we come in.  (I know. You were beginning to wonder...)

Work and job design has long been an orphan, a second-class citizen largely ignored by the HR and reward professions.  As a discipline and especially in the cases of essential/hourly workers, it has been pursued with seriousness primarily by industrial engineers and their like.  There may be lessons to draw from their work but few of today's jobs -- even those at the very front lines of retail, financial and manufacturing/distribution industries -- are purely mechanical in their execution.

As those with responsibility for managing our organization's compensation spend and doing so to maximize the return on that investment, and given the disruptions to work and rewards that are reverberating through the world, we should be looking at this as a prime opportunity to embrace work design. And for us to provide leadership and expertise to initiatives like these.  Who better?

A number of organizations, many prompted by the pandemic, are already involved in work and job redesign efforts, particularly at the lower wage end of their organizations.  The redesigned jobs will pay more -- significantly so in some cases.  You won't see their names splashed across the pages of the Wall Street Journal.  They aren't doing it for the PR benefit but because it makes good business sense.  And I'll bet HR and the Rewards function have a leadership role in the effort.

If proactively lifting the wage floor is going to be a thing for enlightened organizations, it would be great to see us driving the train ... or at least sitting near the engine.

Your thoughts?

Ann Bares is the Founder and Editor of Compensation Café,  Author of Compensation Force and Managing Partner of 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 reading in her spare time. Follow her on Twitter at @annbares.

Image "Dollar Growth" courtesy of hywards/FreeDigitalPhotos.net