Compensation Cafe

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

Cafe Classic: Rewarding The Right Employee

Editor's Note:  Chuck Csizmar's Classic post and question about who you are directing your reward dollars to.

This question may sound like a no-brainer, but when you think of your organization's pay-for performance compensation program, do you feel that you are recognizing and rewarding the right employees?

And who exactly is that, you may ask?

• It is not everyone

• It is not those employees who managers feel need the increased pay

• It is not the employee who has been busy all year

• It is not the employees with the greatest length of service

• It is not the employee that everyone likes

What your definition should be, is that the right employee is whomever has performed well above the crowd of other employees during your rating period.  Those who you can rightly call high achievers.  Those whose resignation would cause you to lose sleep at night.  Everyone else can be an afterthought.

Now that was easy, wasn't it?  Like I said, a no-brainer.

It Doesn't Work That Way

But what's that, you say?  That's not exactly how things work in your organization?  There are other considerations besides performance?  So that perhaps the right employee doesn't always get rewarded?  Or whatever they receive isn't much more than that given to Joe Average?

Why do you do that?  Let's consider the likely culprits:

• Not much money to go around:  This is a common argument when merit budgets are tight; that when you can't make much of a distinction when granting reward percentages, you don't make much of a distinction with your rewards.  Proponents would say, "Let's just push the EASY button and give everyone the same raise."

• Everyone deserves something:  The "It's not my money" tactic, where emotion overrules business sense.  If an employee hasn't seen fired then they should get something for sitting around for twelve months.  Hasn't inflation increased for everyone?

• Performance ratings are overblown:  Here is the current new age thinking, where performance shortcomings are the fault of the system.  That somehow monetary rewards have little to do with future performance, so why should we discriminate amongst employees?  The system is rigged.

• Somebody might quit:  This is every manager's fear, of course,  but in our case this trepidation can lead to greater interest in providing pay increases that would retain the staff.  If an employee quits it's likely going to mean more work for the manager, and potential criticism from their bosses.

• I want to be liked:  An attitude especially prevalent among new managers, who want to build a collaborative team environment ("We're all in this together").  They can be reluctant to play the judge and jury about performance assessments and pay increases for their "team."  Many would rather blame Human Resources.  They don't want to be disliked by anyone.

Making The Hard Decisions

Rewarding the right employee becomes essentially about the manager being willing and able to make discriminatory decisions about an employee's job performance and effectiveness as an employee with the organization.  That is, if you presume that pay increases are not "owed" on the basis of tenure ("It's been twelve months.  Where's my pay increase?").

Because the budget for pay increases is always going to be tight  There will never be enough money for everyone, so an effective manager has to choose how best to spend their available reward dollars in a way that generates the best return for the organization.  Yes, that's right - for the organization.

In some cases this means that Joe Average may not receive an annual merit increase this year, even if their performance has been ok / satisfactory / meets expectation, etc.

Making these decisions is not easy.  But it's not supposed to be.  That's why (tongue in cheek) the managers make the big bucks.  Then again, perhaps if it was the manager's own money being spent the answers might not be so hard to find. 

You know who the right employees are.  Put your money there.

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,"Business Meeting," by freedigitalpress

Cafe Classic: Why Are Mentors Worthless?

Editor's Note: Are we paying sufficient attention to the unsung heroes in our organizations who take on the heavy-lifting involved in developing talent?  In this Classic post, Jim Brennan calls us on this oversight and pushes us to do better.

Do you offer specific rewards to mentors who develop your talent?

If you do, you are an exception.  That is the apparent conclusion from both my experience and my research.  Organizations seem to find no value in the process of mentorship that warrants reinforcement.  No enterprise could be found that paid a bonus, held a dinner or provided any other discrete total rewards element to mentors for their role in developing talent.  Not one of the 25 human resource or compensation professionals I randomly polled (most had called me on other matters) admitted to supplying any special reward for employees who train others in addition to other duties.  Oh, some mentioned that a mentor could be nominated for a spot bonus or a recognition award, if a manager saw fit to recommend so; but there were no reports of any formal programs for the care and feeding of the nurturers of tomorrow’s talent. 

When management fails to provide positive reinforcement to those who perform a vital service like mentorship, they may send the wrong message.  Never forget that the Total Rewards concept involves giving signals and communicating values as well as paying money.  The manner in which you deliver compensation frequently delivers a stronger impact than the amount dispensed.  The process usually communicates a lot more than the product says by itself.  The lack of a formal recognition option for mentors says something loudly.  Refusing to reward those who develop effective performers who excel in your enterprise is extremely short-sighted.  There is hardly anything more important to long-term organizational survival than cultivating competencies, instilling skills and grooming people who demonstrate superior abilities.  It is what makes humans resources.

Tracking the identity of the mentors responsible for successfully developing your current home-grown talent should not be that difficult.  Providing appropriate and meaningful rewards to reinforce their stalwart efforts is not impossible, either.  Simply ignoring their invaluable contributions, however, runs the risk of starving the goose that lays your golden eggs. 

People have this odd tendency of repeating behaviors that bring them meaningful positive consequences.  Helping others grow is usually a very rewarding experience for the mentor; but there is a limit to the power of intrinsic rewards, especially if they must operate separate from and even against the influence of the formal reward system.  Might as well use that powerful motivational instinct to inspire a useful result rather than ignore it.  The warm fuzzy glow that comes from Doing A Good Thing can be extinguished eventually by implacable organizational indifference.  Why take the risk?

Ann Bares, when she discussed the catalyst role indicated by the hockey plus-minus rating, has addressed other aspects of this syndrome.  There are people in your workplace whose most essential service is to assist others to perform better.  It would be a disaster if they stopped what they are doing.

What are you doing to support, sponsor and encourage mentors with a proven record of cultivating talent?

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 by nedel_neln, courtesy of Creative Commons

Are Rewards a Trick or Treat?

With Halloween right around the corner, it got me thinking of what potential spooky tie it has to compensation and this is where the nostalgic “trick or treat” may very well be causing a mini terror in how we approach total rewards.

Figures around employee burnout are staggering, which begs the question as to whether our pay programs are inadvertently tricking us into treating behaviors that are no longer conducive to meeting a well-balanced work life.

Too often, we stress the importance of seeking total rewards and business alignment.  The intention here is to ensure staff are performing to levels and expectations that are going to drive the business forward and meet set objectives.  However at what cost? 

Are the overwhelming needs and demands of meeting team, departmental and organizational goals becoming too much?  Quite possibly, yes, the increased pressure to deliver and take on more work can be seen as one of the contributing factors leading to the recent crescendo of the great resignation.  It is not hard to miss the fact that delivery and execution are at the expense of one’s ability to act and perform successfully at it.

Done well several successive times not only feels good but seemingly will nab the attention of management leading to some form of recognition and reward.  Receiving this acknowledgment for most increases the need and desire to feel it again and, more often than not, we feel obliged to take on more work.  Sometimes the rewards follow suit as they keep coming, however, this may not always be the case. 

All too often the delivery of the reward ceases, it is not valuable enough, or it no longer correlates to the one thing that continues to persist, which is the work and there is a lot more of it!  At one point or another, something will have to give in; the increased volume of work, the corresponding escalation of expectations, the demanding pressures with the need to balance existing and new tasks will simply be unrealistic to sustain.

While it is not fair to say that employers are purposefully “tricking and treating” employees where they seek to derive more work out of them, it does put caution to the wind.  As demands increase, something will have to give way.  Collectively, we need to ensure a sense of value and purpose is reciprocated, and as work is delegated an emphasis of drilling down on what is priority vs. not will need to be communicated.  Equally important is managing realistic expectations from both a supply and demand standpoint.  It is easier said than done like most things; however, it's fair to say that a true treat bears no tricks and no ambiguity!

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: Unsplash image with credit to Nick Fewings.

Zooming In On The Data

The use of exit interviews and engagement surveys can shed light from an employee's perspective on several factors tied to their sense of value and attachment to an organization.  For most rewards professionals’ data collection, the analysis and outcome statistics drive us to find solutions and identify the culprit challenging today’s reward programs.

How we assess data got me thinking: beyond acquiring employee insights through surveys and seeking truth in the obvious, why not examine our data and look for the opposite?  For example, what are we doing or providing to our workforce that is making them stay, but may ultimately not be as favorable to the organization?

The intention here is not to pin the employee against the employer, but imagine the scenarios where we have become complacent or have failed to take notice of offerings or practices that have enabled employees to take advantage.  There may be a number of examples, and the following are just a few to get you thinking:

1. Learning and development – while providing employees with the opportunities to seek professional development is highly valued and respected, it is equally important to ensure there is demonstration and application of new skills and qualifications attained. Also important is assessing the trends among roles or grade levels where there is high career progression, which will eventually stall as succession to the next level becomes limited. For most, they will quickly realize that they have acquired sought-after skills deemed desirable in the market and to recruiters.

As employers, we hope to equip our workforce with the skills, knowledge, and aptitude to be successful within the context of the organization, not to be perfected and utilized elsewhere.

2. Hours of work – if you have not already, it's best you assess the usage of overtime (“OT”). Consider the roles, departments, and work seasons where OT usage is highest.  Do the figures make sense? The expense for this can be costly, hence the importance of  deciphering if OT is even necessary.  Given how quickly work has evolved, there is more reason now to revaluate eligibility criteria, minimum thresholds to claim OT, and whether process improvements could eliminate the need for excess human touch.

3. Role clarity – job descriptions are a key proponent in outlining role expectations and are a shared artifact between the employee and employer. The context within is key to effective performance management, however, the challenge arises when the accountabilities no longer reflect how the role is meant to function today. Conveying sub-par performance to an employee is harder when you do not have updated descriptions to base individual accountability on.  To an employee, they might be pulling just enough weight to keep on getting by, while true productivity is suffering.

4. Institutional knowledge – are there individuals that you keep around because of fear of losing the legacy intel they house? If so, like the overtime scenario noted above, it's time to examine what is invested in this retention and put in motion the steps to either have the knowledge transferred or documented.  Better yet, implement a new-shared process.

The next time you delve into the data, see what story you uncover.  While our intentions might be sound in providing the optimum rewards package, be sure that it's in the best interest of all parties.  In the end, we want the right talent in the right spots, doing the right things.

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: Unsplash image with credit to Markus Winkler.

Cafe Classic: Don't Be Fair - Be Consistent!

Editor's Note: Today's Classic post features Stephanie Thomas speaking to the question of fairness - a perennial hot button in the field of rewards.

Discrimination and fairness... They're really just different sides of the same coin, right?

Or are they?

You could argue, as my fellow Café contributor Jim Brennan did, that they're the same side of the same coin. In his post, More Discrimination Is Needed, Jim made an excellent point:

The very act of discrimination can be either bad or good, because some differences must be ignored while other distinctions should be noted.

I couldn't agree more. The meaning of the word discrimination has gone through a transformation. People automatically think of "the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age or gender" rather than "recognition and understanding of the difference between one thing and another". Semantics often gets in the way when the word "discrimination" comes up.

Jim goes on to say that:

Discrimination is needed to create pay equity. It not only involves comparable worth but also includes perceptions of fair treatment by all employees. 

Here's where things get complicated. "Discrimination" is objective; to use Jim's example, it's important to differentiate between "positive contributors and feckless shirkers." Presumably there's some objective measurable thing that allows us to make this differentiation (e.g., sales volume, average serving time per customer, number of calls fielded per hour, etc.). If the compensation strategy is tied to this objective measurable thing, then the strategy automatically differentiates between the "good performers" and the "bad performers."

"Fairness" is subjective. What seems unfair to me may seem fair to you. If I'm a bad performer and you're a good performer, I may view a compensation strategy tied to sales volume, for example, as unfair. I put in the same amount of hours as you do, and I'm working hard and doing my best - just like you are. But I sell less than you do because I get all of the crappy sales leads and you get all of the good ones. It's not fair that I get stuck with the crappy leads, and it's not fair that I get paid less than you do even though I'm working just as hard as you.

Fairness depends on our perceptions, and perceptions of the same situation can vary wildly from person to person. So, rather than aiming for fairness in your compensation strategy, deciding which family member takes the dog out for her morning walk, or in anything you do, aim for consistency.

Consistency is the key. Set your policies and procedures based on legitimate factors that don't discriminate on the basis of age, gender, race, ethnicity or other protected characteristic, and apply those policies and procedures in a consistent manner. If you're consistent, you end up being more fair than you ever were. 

Stephanie Thomas, Ph.D., is a Lecturer in the Department of Economics at Cornell University. She teaches undergraduate and graduate courses on economic theory and labor economics in the College of Arts and Sciences and in Cornell’s School of Industrial and Labor Relations. Throughout her career, Stephanie has completed research on a variety of topics including wage determination, pay gaps and inequality, and performance-based compensation systems. She frequently provides expert commentary in media outlets such as The New York Times, CBC, and NPR, and has published papers in a variety of journals. 

What Are Your Accidental Values & How Much Are You Paying for Them?

I've always made it a point to ask about organizational values in every compensation philosophy session and in every discovery conversation at the front end of a problem solving engagement.  The responses can vary from "Values? I can't remember but I think you can find them on our web site" to a passionate discourse on the guiding principles of how people behave and make choices in the organization.

Some of the more interesting - and frankly most helpful from a reward standpoing- exchanges I've had about values have been centered on the concept of accidental values.  Renowned author and speaker Patrick Lencioni first coined that phrase in his book The Advantage: Why Organizational Health Trumps Everything Else in Business, where he takes the notion of organizational values and breaks it into four distinct categories:

1. Core Values. These are the deeply ingrained principles that guide all of a company’s actions. They serve as cultural cornerstones and must never be compromised. They are the source of a company’s distinctiveness – their brand identity.

2. Aspirational Values. These are the values a company needs or wants to have to bring future success, but currently lacks. Aspirational values are beneficial, yet they need to be carefully managed so that they don’t dilute the core.

3. Permission-to-Play Values. These simply reflect the minimum behavior and social style of team members. These values qualify candidates for acceptance on a team, yet they are not the defining characteristics that set an organization apart from its competition.

4. Accidental Values. These arise spontaneously within a team over time, without being intentionally cultivated by leadership. They can be beneficial or they can produce negative forces, even to the point of toxic.

The concept of accidental values is particularly important to those of us who practice in the field of rewards because reward delivery - who and what gets reinforced with rewards - can be a key signal of an accidental value.

A few examples can help illuminate this point:

One leadership team realized that they had an accidental value of minimizing their investment in front-line workers, paying their customer facing employees as little as possible.  How did they discover this?  By realizing (and a credit to them for their honesty and willingness to look without flinching at their decisions) that they had a long history of making the lowest investment in wage and structure adjustments that would still get them in "a competitive range" for these roles.

Another company's management group came to realize that they had an accidental value of reinforcing those who stop at nothing (including stomping all over their colleagues and subordinates) to maximize their personal revenue generation.  How did they know?  Because these toxic individuals -- well known to everyone in the organization -- consistently earned the biggest awards under their incentive program (and scored the biggest merit increases as well).

You won't find accidental values framed on the boardroom wall or memorialized on the website, but employees know that they are there and their presence may mean that you are investing precious compensation funds in actively undermining your desired culture.

I find that using the framework of company values and particularly the concept of accidental values is a useful approach for confronting leadership teams about reward practice disconnects -- gaps between what they are saying and what the organization is doing with its compensation spend -- in a way that gets their attention. With that, this could be a good addition for all of us to carry in our mental toolbox.

What experiences can you share about accidental values in your workplaces?

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 hiking, reading and hanging out with family in any spare time. 

Creative Commons image "Face Plant" by Neil

Cafe Classic: Irked Enough to Care

Editor's Note: In this Classic post, a favorite of mine, Derek Irvine challenges us to see the difference between two types of "problem" employees and to realize the potential value of some of those squeaky wheels.  

Do you have any “malcontent” employees? The ones who are always complaining? The ones who, no matter what, are never happy with their job, their colleagues, their managers, the company?

What about “vocal” employees? These are different from the malcontents, though "vocal" employees also have no fear about expressing their opinions on how the team, project or company could be better.

A good argument can be made for exiting the true malcontents (those who are thoroughly disengaged). But too often the “vocal” employees are lumped in with them.

How do you tell the difference between the malcontents and the vocals? Listen to the intent behind their words.

A vocal employee will convey an attitude of: “I’m engaged enough to be irked.”

Employees who are engaged enough to be irked still care. If they didn’t care about the success of the project/team/company, they wouldn’t invest effort to complain or even register emotional concern.

The challenge for managers of vocal employees is to listen constructively to what is being expressed and then respond appropriately in one of three ways:

1)    Agree and take action. Acknowledge the employee is right in their assessment and then take action to implement changes.

2)    Disagree and communicate. Hear the employee out, but if the anger is genuinely misdirected (usually due to lack of a complete picture of the situation) explain to the employee more fully why things are the way they are and how the employee can be more successful within those boundaries.

3)    Agree and do nothing.  Acknowledge the employee’s point of view but take no further action.

The first two responses are fair and honest. Either could be appropriate and the best reaction depending on the situation. The third response is a cop-out. Refusing to take action or redirect employee emotion more productively will result in a “vocal” employee becoming a true malcontent.

Why am I writing about this in a blog about compensation and recognition? To employees who care, and “vocal” employees certainly do, truly listening to them and taking action is a powerful form of recognition. Validating employee concerns shows you pay attention to what is valuable to them.

Bottom Line: Listen to the employees who care enough to be irked.

As Globoforce’s Executive Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is a leader in the WorkHumanmovement and the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Total Reward Lessons from the Olympics

For a few momentous weeks, the world’s best athletes and benevolent fans will witness some of the greatest achievements and feats in sports.  The 2020 Summer Olympics are in full swing and as an inherent need, I find myself trying to see whether there is a link to total rewards.  Unsurprisingly, there is! 

Some of these lessons are positive takeaways, others emphasize the stark realities of incentive design, while another will only magnify a persisting inequity in how we value the essential asset at the heart of all this, the employee or athlete.

Starting with the good.  The Olympic Games exemplify the employee life cycle.  An elite star is not born overnight; likewise, an expert professional grows and develops with time.  In addition to selling a customized total rewards package catered to an employee's preference, organizations must also diagnose how each of their employees learns best and sell your development opportunity.

No one athlete is the same, their diet, training, and conditioning regiment will be specifically designed to ensure their optimum success. The role of the coach is to seek out the right tools, have a plan and the platforms to facilitate their growth.  As business leaders and people managers, we are the workplace “coaches.”  Our duty is to advocate and solicit feedback, enabling us to design the training and development (“L&D”) programs that will ultimately meet the unique learning styles of our employees.  By integrating a continuous performance management program with L&D, we build a consistent feedback loop.  Steadiness in this process creates real-time performance adjustments so the next evaluation of the output inches closer to the individual’s goal.

The second learning reveals the reality of most things competitive; there will be only one winner.  Many will try, but the percentage of which reaches the top is minimal.  This statistic is a key consideration when designing an affordable and sustainable incentive program.  The internal spread of performance will take the form of a bell-shaped type of distribution, the majority of employees meeting and falling just below the “podium” level.  Leaders rating everyone exceptionally will not be feasible towards managing costs, nor is it conducive towards differentiating the good vs. the gold medal performer.

Finally, there is a real price to pay when striving for Olympic glory.  Despite all the sacrifices, the payout doesn't seem to align with the time and effort exerted.  Like the workplace, we have a ways to go in eradicating gender pay inequities and creating equal opportunities for all.  Similarly, the Olympics illuminates several instances where the practice is questionable in terms of treating and valuing athletes fairly.  For example, do they all have similar access to funding and training needs? Are female athletes that are performing to the same level as the men's team paid equivalently? What about the unfair balance of favoring one sport versus another, due to its influence on profits?

While the Olympics opens the world to diversity, it may be falling short in its efforts to equitably include, value, and reward, qualities that all employers should bear in mind and better execute upon in their workplace.

Reena Paul (CCP, GRP) is 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 and contact Reena directly on LinkedIn

Photo by Bryan Turner by Unsplash

Cafe Classic: Cultural Practices for a More Dynamic Workplace

Editor's Note: As we reimagine and rebuild work structures and practices in the wake of COVID's disruption, Derek Irvine's Classic post on creating more dynamic - and inclusive - workplaces is very timely!

Eric Mosley was quoted in an interview with Forbes as saying: “Organizations are changing. The way we work is changing. The top-down hierarchical approach is a dying legacy of the industrial era.” The implications of those dynamics are far-reaching for many HR and business leaders, especially those who are interested in improving upon the ways that modern organizations work.

Eric’s comments couldn’t be timelier, given teams-based research summarized in an Insights by Stanford Business article. That piece addresses the pitfalls specifically associated with top-down structures. I thought it helpful to summarize some of those findings, and speak to how I see organizations adapting to the changing face of business.

What are the 3 pitfalls of hierarchies?

According to the research mentioned above, when there is too much hierarchy:

1. Levels of participation are skewed. Those in leadership positions often take up a majority of airtime. When participation does come from others, it tends to be spent agreeing with the leader as opposed to adding unique value.
2. Individuals with the most applicable knowledge or expertise may not have the opportunity to contribute to decisions in those areas. Some of the research points to a tendency to listen to those with seniority over first-hand knowledge of the topic.
3. A rush to agreement, without a healthy amount of debate. In the presence of a hierarchy, individuals are less likely to critically or constructively examine the assumptions the team is making and what the most effective solutions could be.

Many of these problems could be exacerbated as traditionally hierarchical organizations face the need to address more collaborative and dynamic expectations of workers. Fortunately, there are several practices that can help build a culture that avoids those pitfalls and supports individuals in bringing their most productive selves to work.

3 Practices for a Dynamic Workplace

1. Leaders as coaches. While it is important for leaders to provide a clear and motivating vision of the direction the company or team should take, it is equally important to provide employees the autonomy to determine the specific path to that goal. This balancing act is critical in achieving greater levels of participation from a broader segment of the workforce.
2. Crowdsourced performance. Teams and organizations are successful when there is a shared understanding of who knows what, and who has which skills and abilities. As roles become more fluid, that level of understanding can be difficult to achieve unless the company has developed a scalable, social solution for employees to contribute and share that knowledge.
3. Recognition of differences and diversity. Constructive debate often comes from diverse perspectives and the ability to give voice to those perspectives. Greater participation and empowerment, as mentioned above, both help employees feel they have a voice. That sense is reinforced when peers are able recognize each other for diverse approaches that all contribute to organizational success.

Together, this set of practices can help create a culture of greater humanity in the workplace, ensuring that all employees can successfully participate, leverage their own unique skillsets, and provide their diverse viewpoints.

What is replacing hierarchy at your organization?

As Globoforce’s Executive Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is a leader in the WorkHumanmovement and the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.