Compensation Cafe

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

Cultivating and Rewarding Workplace Risk

I don’t know if we can confidently say “back to normal”, but what is for certain is organizations and their workforce are facing another mindset and routine shift with the impending call of returning to the office. 

If there has been one outcome or learning through this, it has been the ability of humans and businesses' to take a risk when faced with the unprecedented.  

By taking a risk, many businesses have managed to stay afloat, while some have even thrived.  When forced to an uncomfortable state requiring immediate decisiveness and action, we have been able to tap into a new critical thinking mindset, allowing us to curate innovations and solutions.  Not surprisingly, a lot of our efforts required rounds of trial and error.  Through this, no one gave up; the process was revisited, adjusted, and deployed again.  Taking risks naturally became an inherent piece of an organization and needs to remain intertwined with its culture as we plan ahead.

The illusion of being able to sit at our pre-covid desks should not be the catalyst to draw us away from thinking that “risk-taking” is now a liability or unnecessary – it is the opposite.  Instead, it pays to do so. 

Organizations can take many steps towards cultivating a workplace that values taking calculated risks, such as:

1. Creating a safe environment, one that effectively communicates that there is no punishment for the failure, but rather focuses on the learnings.
2. Consistent and varied feedback, involving a regular feedback loop during tests of trial and error and sourcing out diverse advice from other teams.
3. Clear definitions, as recklessness can be a true liability and taking risks requires dedicated thought and a degree of reasonability. Organizations should work towards defining the accepted parameters within which employees should work.
4. Reward and recognition, acknowledging those whose ideas and or attempts have been the start of something new. Demonstration of this creates a sense of value, purpose, and motivation.
5. Leadership support is the most critical ingredient because it sets the foundation and groundwork for risk evaluation and ultimate execution.

Buy-in from leadership is crucial.  One thing we all, especially management, cannot be influenced by is our own risk tolerance that exists outside of work.  Personal finance management, whether it be reserved and traditional or off the cuff and playing to the market, is subjective to each individual. As a business leader the moment you step “into the office,” you must be objective and holistic in your assessment of risk and open to seeing the complete opportunity it presents.

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 Bernd Dittrich on Unsplash

Cafe Classic: The Value Of the Value Proposition

Editor's Note:  We seem to have moved away from the notion of the "value proposition" in relation to our total rewards offerings.  In this Classic post, Chuck Csizmar examines the roots and value of that (outdated?) idea in understanding what we offer to employees in exchange for their work.

Use of the term "Value Proposition" seems to have gone out of date in Human Resource circles, or at least I don't hear it mentioned anymore.  Have you?  Granted, catchy buzz phrases come and go with the seasons, or so it seems, but I had thought that the value proposition as a strategic compensation focus had roots.  Perhaps the term has been replaced by a new phrase (same idea; new words).  It can be hard to keep track.

I hope though, that compensation practitioners are not losing sight of the concept, because in my humble opinion this thinking should be the 11th commandment.

For those new to Compensation the original term (in HR speak) can be described as follows:

A value proposition is a promise of value to be delivered and acknowledged and a belief from the employee that value will be delivered and experienced.  A value proposition can apply to an entire organization, or parts thereof, or employee perception, service or programs.

What the dictionary is saying is that if an employee values something, then a  promise by their employer to provide that something is considered a worthwhile strategy.

The Value of "Something"

The trick is, what is that "something?"  Because one size does not fit all.

We all want money.  Cash is king and all of that.  But pay by itself can be more of a psychological dissatisfier than most realize (remember Herzberg's Motivation Theory?).  Because having what we consider the right amount of pay results in a neutral feeling , while anything less than the right amount is a perceived negative.  And having more?  Does that feeling even exist?  So there is little upside for the employer to paying more if the goal is employee satisfaction.

However employees in their diversity want more than just money.  They can appreciate and "value" more than the cash. It could be medical and / or other benefit coverage, low insurance premiums or deductibles, vacation time, free parking, discounted cafeteria food, liberal sick time, tuition reimbursement, even free coffee in the break room.  The list is endless.

Anything that the employee considers a reward (that which is provided or made accessible to employees) as part of the working environment is a something that will be valued.

Employers take note: what employees value they can be motivated to attain or retain (not lose).

Using The Value Proposition

This is where the "cafeteria style" benefit plans originated; the view that, if the organization focuses on delivering that which the employees consider as having personal value the return benefits (improved morale, retention, engagement, productivity, etc.) will outweigh the cost of providing that value.  And perhaps the cost doesn't have to be any greater than what was paid out before, just better focused.

I still remember the organization where my laundry was picked up and delivered to my office door.  And where I could buy a dozen high quality long stem roses for my wife.  The charge for these services was 100% paid by the employee, but the memory of having (and later losing) those conveniences lingers to this day.  Especially with my wife!

Even considering the above merits it remains a common practice in some organizations to focus on delivering pay and pay alone; to treat employees as having one dimensional thinking and desires.  Here are managers who think that by keeping their finger on the EASY button (just pay them more) all good things will come to the organization - without breaking a sweat.

Instead, all too often they find themselves burdened by unsustainable payroll growth, while still lacking the improved morale, retention, engagement, productivity, etc. that they had assumed would follow the pay cycle.  They find little or no ROI for their simplistic knee jerk tactic of thinking that one answer (the easy one) solves all challenges.

Because they really aren't interested in providing all that the employees consider value. That road leads to more work (complexities, time consuming, myriad answers) than if they simply pressed a payroll button.

So perhaps, at least in some quarters, the Value Proposition hasn't disappeared after all, but is just ignored.

But not with your organization, right?

Chuck Csizmar CCP is the founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  Chuck is a broad-based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.

Cafe Classic: How to Spread Innovation

Editor's Note: How can you encourage innovation to thrive in your organization?  Derek Irvine provides some Classic tips.

I was thinking back to an old New Yorker article recently. In the piece, Atul Gawande (of The Checklist Manifesto fame) analyzes the types of attributes that make some innovative ideas spread quickly and others spread much more slowly. It’s an interesting take on the progression of medicine, but has some great insights for organizations as well.

One of the key points that he makes is that adoption of innovative ideas depends in large part on face-to-face social diffusion processes – “people talking to people.” These interactions complement and ultimately amplify other diffusion processes (such as technology or incentives) to fundamentally shape the norms or culture of an organization towards new ways of thinking and behaving.

As organizations become increasingly complex and employees more globally distributed, a challenge for leaders is to ensure that solutions are in place to help people communicate, share ideas, and adopt innovative practices across the entire company.

One of the ways in which this challenge manifests itself is through the localization of innovation. I’m sure that many companies have pockets of excellence where the norms are towards continuous improvement and innovation, as well as pockets where that behavior is less common. Unfortunately, there are any number of barriers that prevent diffusion and scaling of ideas across the boundaries of those pockets.

Businesses are increasingly recognizing that technology and incentives are no longer sufficient drivers to overcome those barriers; instead, a holistic solution is needed that emphasizes human-centered technology and empowering rather than restrictive, compliance-oriented policies.

This is certainly a growing trend across varied areas like performance reviews, feedback, and social recognition- spheres where technology is enabling a better quantity and quality of human-to-human interaction. In these cases, emphasis is placed less on prescriptive rules and more on exemplars of positive development and achievement. These solutions are able to capture all of this and spread it more widely throughout the organization.

Take for example a performance review process that highlights a team member’s innovation in completing a challenging project that the rest of the team can learn from. Or take the example that is provided by peer recognition of how a colleague has taken her own area of expertise and applied it to a new area in the company with positive results. Finally, consider the feedback that a manager offers to demonstrate improvements on a core process that each team member can adopt.

These types of solutions offer a new view of the organization, where the spread of innovation through “people talking to people [through technologies and processes]” is strengthened and pockets of excellence grow. Returning to the article that opened this post, it is an approach that requires people to be “on the ground” to ensure that these dynamics become self-propagating.

How would you set up your company to thrive based on the spread of innovation?

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.

Cafe Classic: Is Pay a Critical Part of Culture or Not?

Editor's Note:  This Classic post by Derek Irvine raises important questions about the relationship between how you pay people and their perceptions about the organization, its values and its culture.  

Typically, the statistics we read about in workplace surveys are intuitive. They fit with our basic understanding of how organizations work, or at the very least could work better. That wasn’t the case with one of the findings from a report from The Workforce Institute at Kronos and WorkplaceTrends.com. Employees that took that survey were asked to rate the three most important attributes of workplace culture. The number one answer from 50% of those employees: pay.

There are possibly a handful of companies that clearly leverage pay as a critical part of their company culture, so perhaps the data isn’t completely off base. Netflix and Costco come to mind as companies that define themselves by their willingness to pay in the very top percentiles of market rates. But for the most part, I am surprised that so many employees point to pay as the most important part of culture.

The survey also included responses to this question from HR professionals and managers, offering a good comparison point. According to them, ‘managers and executives leading by example’ and ‘a shared mission and values’ were some of the top attributes of culture. Much more fitting with our intuitive expectations of the key drivers of culture, but findings the report refers to as “striking out” in terms of not aligning with the employee perspective.

So what is driving the results from employees, and what should HR and managers be doing about it?

Explanation 1: Pay is actually becoming an increasingly important aspect of culture. If we look to this definition of culture, perhaps pay fits into employees’ notion of artifacts as the observable portion of that culture, reflecting deeply held values and implicit assumptions. This would be the answer that exemplars like Netflix and Costco tend to support. But given the secrecy with which pay is typically handled and the difficulty of maintaining unique competitive advantage, I would be surprised if this were to be the norm for most companies.

Explanation 2: Employees completing the survey actually responded to a different question than the one that was asked. Instead of culture, which can be abstract, employees may have relied on a more concrete referent, using their perceptions of the organization as a whole. This fits neatly with other surveys that consistently rank pay as among the most important factors at work (often alongside culture as a separate and distinct item). Still, it is not particularly helpful in understanding a potential pay-culture relationship.

Explanation 3: In the context of this question, employees interpret pay less in terms of fixed salary or hourly wage and more to do with incentives, bonuses and recognition. As a part of a total rewards strategy, these aspects tend to be more widely broadcast as investments the company can make to strengthen or build culture, to encourage specific behaviors aligned to core values, and to share a common mission or purpose. This is perhaps the most productive interpretation of the findings above, as it helps us to link together the responses from managers and HR professionals with those from employees.

These explanations are by no means definitive or exhaustive, but do signal the need for more small data to really understand the roles and relationships between pay and culture, and to help driver greater alignment between employees and company leadership.

What is your take on the finding? Do you have another explanation to offer?

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.

Cafe Classic: Empowerment is Great, But Make Sure You Have These Things First

Editor's Note:  Employee empowerment can be powerful and positive, but only if you have the right "scaffolding" in place to support the success of those empowered employees.  Derek Irvine addresses this point in his Classic post.

Many companies seek to empower their employees to achieve gains in productivity, especially for those in customer-facing roles. Common tools include increased decision-making authority, autonomy, and discretion for task-related behaviors: they share the common theme of removing structure or barriers to “unleash” employee motivation.

Without the appropriate scaffolding, however, many of these improvements can reveal shaky foundations rather than allow the company to build upwards.

As structure is removed, companies need to make sure that elements are in place to continue supporting employee performance, things like culture, recognition, and aligned incentives. Supported by these foundational elements that reinforce desired behaviors, empowerment can become an effective strategy in improving performance across the board.

But in their absence?

Take this recent post from the Harvard Business Review, for example. It tells the story of a sales organization that ran an experiment in employee empowerment. The sales team made a request of its management team to remove some of the reporting burdens, arguing that although the data was useful, it ultimately took time away from their selling and was hurting productivity. Management agreed to the request, piloting some streamlined changes in a few areas of the company.

The results from that experiment were perhaps novel for that company’s leadership, but should not have been entirely unexpected: productivity only increased among the sales people that were already performing at high levels. For everyone else, it either remained unchanged or actually decreased. The results revealed that the sales team was poorly equipped in terms of the mental models and behaviors that contribute to successful selling, and more reliant on the data from the reporting than perhaps they believed themselves to be.

In other words, they lacked the support of an effective culture, as well as incentives that could guide them towards developing high-performance thinking and behaviors needed in a more dynamic and less structured environment.

Here’s how a combination of culture and incentives might have helped.

Research tends to support a combination of culture facets that contribute to organizational effectiveness. These include an emphasis on employee development and cooperation, a consistent set of values and coordination, and a mindset of adaptability and flexibility. These facets are united by a strong sense of mission to provide the evaluative criteria against which performance is monitored.

Effective incentive strategies ensure that employee behavior is effectively aligned to these facets, developing capacity across the organization. There are a number of approaches that can be successful. A balanced rewards portfolio that captures the important dimensions of these facets. Or a social recognition program that encourages each employee to embody the values and culture of the organization, and recognize others who do so as well. Or even some combination of the above.

Imagine if the sales team from the story above had been recognized and incentivized all along, to adopt behaviors that demonstrate successful selling and prospecting. Removing the reporting burdens against this backdrop could very well have improved effectiveness on a much wider scale, given the depth of investment in both culture and recognition across the sales team itself.

Does your organization empower you? If so, what helps you to be as effective as you can be?

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.

Cafe Classic: What Do Dead Horses Have To Do With Compensation?

Editor's Note:  Is your compensation program a breeding ranch for dead horses?  Jacque Vilet rides to the rescue with advice for those out-of-date, no-longer-relevant policies and practices!

  “When you discover you are riding a dead horse, the best strategy is to dismount.”                                    ---- Dakota tribal wisdom                            

Simple common sense don’t you think?   However, truth be told, the world of business is full of dead horses.

What’s the definition?  It’s any program, project, policy, or established way of doing things that is out-of-date, irrelevant and not in sync with a company’s strategy.  Surprisingly, management often tries to keep the dead horse alive.

Instead of “dismounting”, management tries (as a last ditch effort) to revive the dead horse in question.

Perhaps you have seen some of these attempts in your company.  For each business example, I've created one for how it might look in Compensation:

1)    This dead horse is too big to fail.   The company has sunk too much money in the project/product/service and it’s cheaper and easier to spend a little more money to fix it than it is to cut it.   It’s called the "sunk-cost effect", otherwise known as throwing good money after bad.

Compensation:  A large, very expensive _____  compensation study (fill in the blank) has taken six months so far with a lot of money spent and no end in sight.  No one believes it’s relevant anymore --- including you --- but you’re afraid of cutting it and risk management’s wrath for money and time that’s been wasted.

2)    Visit other companies to see how they ride dead horses.  After looking at several companies, management comes up with a “best practices” model to use in resolving their dead horse problem.  This is in spite of the fact that the companies aren’t in the same industry and don’t have the same business strategy

Compensation: In an effort to decide whether to offer tuition assistance you do a benchmarking study.  Companies reviewed don’t offer it so you decide your company won’t either. One important difference --- the average age of employees in the companies reviewed is 45; your company’s average age is 28.

3)    This is the way we’ve always ridden this horse.  This is the CEO’s pet project/program and has been a major reason for the company’s success in the past.  To end it s/he would have to reverse his/her position with the Board by admitting that it’s no longer relevant.

Compensation:  The company has always used an anniversary date approach for its annual review/merit program.  However now the company really needs to set employee performance goals in sync with FY business goals.  No one in Compensation has had experience with focal review programs and has deeply embedded biases in favor of the anniversary date approach.

4)    Engage a consultant to study the dead horse.  Management is convinced a certain program/process needs to continue as is, but no one internally wants to go against the Board who recommends it be killed.  So management hires a outside consultant and drops hints of further business if s/he provides a recommendation to the Board that the program be continued.

Compensation:  Compensation has been asked to develop a recognition reward program for all employees and management is requiring that the same rewards apply to all employees worldwide.  You know that awarding $50 to an employee in Japan would not be considered appropriate. So you hire a consultant who recommends that the actual reward be decided at the country level.  Now you can deliver this message to management with no fear of retribution.

5)    And when all else fails, promote the dead horse to senior management.     Maybe s/he won’t be noticed there!

We have to selectively abandon the past.  Not everything ---  just those programs/processes, etc. that are no longer relevant.   If we focus too much on the past and present, we’ll lose touch or be left behind when the future arrives.

Do any of our readers have an example of dead horses in their companies?  In Compensation?

*The 10 underlined dead horse statements belong to Vijay Govindarajan.   The explanation of each one is my contribution.

**Please note: Absolutely no horses were injured in the writing of this post. I certainly don’t advocate attempting to ride a dead horse, nor do I advocate working in a company that attempts to replicate said state.

Jacque Vilet, President of Vilet International, has over 20 years’ experience in Global Human Resources with major multinationals such as Intel, Texas Instruments and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expatriate twice during her career. Jacque has the following certifications: CCP, GPHR, HCS and SWP as well as a B.S. and M.S in Psychology plus an MBA. She belongs to SHRM, Human Capital Institute and World at Work. Jacque has been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications.

Are We Doing Enough?

Boy, that's the last question that I'd want to hear anyone asking right now. In fact, I'd be surprised if there weren't some of you who've gotten ticked off just hearing it. After all, how many times can you pull the rabbit out of the hat? 2020 has just been too much.

71% of us in HR report that 2020 is the most stressful year of our career, so I know I'm asking a lot. But years like 2020 are also the ones that show how effective HR is at strategy. Years like this are also the best time to build deeper relations with management, who are also worried about employees at this time.

Here's the reason to ask this tough question and it's important. I can't tell you how many times I have been invited to work with a client who has a department or employee group who are just boiling with resentment. HR and management are beside themselves because the employees seem intractable in their anger and frustration. The attitudes impact both productivity and teamwork. And, in my experience, even with intervention, the bad feelings can go on for years.

Inevitably, the employees believe their (especially) hard work has been taken for granted -- not by their manager, but by management. And the scenario typically plays out in a context like 2020: Tough times, requests for everyone to pitch in, employees genuine in their sincerity to go the extra mile. And then . . . the recognition that employees genuinely depended on just doesn't show up. And usually the specific issue is merit increases and/or bonuses.

It's really hard to sort out who gets what, I know. But I have worked with a certain category of aftermath and it's not pretty. One of the definitions of resentment is, "Bitter indignation at having been treated unfairly." Another includes, "Persistent ill will." Imagine if you have a full department or function who feels this way. The repercussions will cascade out to all the other the people trying to work with them.

According to Willis Towers Watson, only 35% of those companies participating in a recent survey have had to trim their merit budget. Nonetheless, there's still not a lot of money to play with. So where do you start? Well, there's the, "Customer-facing is the only one who should get increases." It's a rare company where that's a fair statement. Or, "There just isn't enough for Admin and HR this year." Another shortsighted tactic. And recent years have spotlighted how misguided it is to overlook hourlies. As we say at Compensation Cafe, everything you do in compensation is communication. Check closely to confirm that your 2020/2021 actions are communicating the messages you've planned.

Yes, you may need to have some serious discussions with management, but don't confuse gravitas with bad feelings as you build compromises with your C-suite. Also, it may be a good time to do an organizational scan, as well as a demographic one, to check whether there is anyone who's been overlooked or impacted negatively. And be sure you've equipped managers to deal with the fatigue and emotions which will surface in employee meetings this year. They are tired, too, so give manager communications an extra effort. It will pay off.

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.

Change is Power

ERI recently published the results from a survey on the impact of COVID-19 on compensation. It was the first report I have seen that showed some actual pay movement as a result of the ongoing pandemic. More telling were the more than 65% of companies who were either progressing with the plans they made at the beginning of 2020 or had not yet made any decision on what to do.

We have entered the second week of November 2020. If you throw out the two-weeks of holidays for Thanksgiving and Christmas/New Year, we have about 5 weeks to prepare for 2021. Not having a plan, is a great way to lose in the battle for talent and success. You seldom watch movies or read stories about the times people did absolutely nothing and somehow met their goals. This is because it almost never happens.

Change is your competitive advantage when others are paralyzed by indecision. Action is your secret sauce for success when those around you are simply too lazy to do something different. Whether we like it or not, the world is a much different place than it was just a year ago. We will never fully return to those heady, coronavirus-free, yesterdays.

Remote work is here to stay. What that means for your company is probably unique, but change is a must. Pay will change. Work-life balance will adjust. Ignoring this will not make it go away.

Unemployment will remain higher than it has been for several years. This tends to put downward pressure on pay.  It may also mean a greater talent pool for some industries. Staying ahead of the market may be easier and allow you to hire materially better talent without spending a fortune.

Now is the time to fix your worst incentive plans, or adjust pay structures that have crumbled under the weight of furloughs, lay-offs, remote work, shrinkage, growth, or any other of the myriad of issues that are being faced in business. Yes, you are tired. But so are your competitors. The best time to win is when they can’t respond. In a world where increases have been in low single digits for a decade, it doesn’t take too much to set your company above the crowd.

Change will happen. The question is whether it will happen TO you, or BECAUSE of you. The former isn’t much fun and the latter puts you in control. As you move into finalizing things for 2021, consider one or two big things that will allow you and your company to set yourselves apart. When everyone else is paralyzed, it won’t take much to do something that makes difference.

Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He has convinced himself he is a “Compensation Futurist” and 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 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.