Compensation Cafe

What Do You REALLY Know About Pay?

Before there were photographs, sailors would return from long trips and describe animals to artists who would then create “official” images. These images helped people feel like they understood what was “out there”. But, in reality, provided almost no useful information. Check out the drawing of the rhinoceros.

You get reports from the Big 4 and compensation consultants. They have pretty charts and easily digestible info-bites. You get market data from survey providers and professional organizations. They include tons of little boxes of information on enormous spreadsheets. There is enough granularity to make you feel like you have everything and can build anything new with grains of sand that are at your fingertips. You have articles from established and new media. They provide insight and new perspective that allow you stay ahead of the trends. You follow twitter and read blogs.

But how much of what you know is factual? You may be surprised.

An article published by Bloomberg on July 1, 2016 discussed Alphabet’s new type of equity awards for their many companies. It was reported that these awards were based on the performance of individual business units, each with their own valuation. Each business unit can choose to use their own synthetic equity or the equity of the parent company for employee grants. It sounded both cool and complex. Right up my alley. I contacted friends there and after a couple weeks they let me know that, even with an NDA in place, they would not be willing to share any details with me.

Secrets make you competitive. I get it. But, what does this mean about what YOU know?

Consultants are notorious for presenting what they are doing and what their clients report back into their survey data sets. It is not coincidence that the predictions by some of the biggest firms are then followed a years or two later by data showing those predictions to now be trends. Consultant recommends client do X. Client does X. Client submits survey data a year or two later. X shows as a new trend in survey data. Presto.

A client asked me to review a recent report provided by one of the Big 4. The data showed incredible year over year changes in certain areas. My client hadn't experienced these same levels of changes. Reports from other firms didn't show the same level of changes. I called a friend at the firm and he acknowledged they made material changes to their methodology for their annual report, but had not reported the change. The year over year growth was essentially fabricated by comparing two different data sets.

Survey data sets are amazingly accurate, but notoriously incorrect. The data is parsed and reviewed, often by very qualified professionals. They work through anomalies, make corrections, throw out “bad data” and report on the rest. But, what data do they get? Is the data you report 100% perfect? Do you think that Alphabet submits the nitty gritty details of pay programs they believe offer a true competitive advantage? Would you? Even with all that detail, you can't know what's missing.

Pay is a big media topic. It has been for years, but the last few have seen an explosion in pay articles from both old and new media. These articles are often based on information from one or two, often disgruntled, employees. We are all aware of how well employees understand compensation. Throw in an axe to grind or a new program with real complexity and the details can get confused. Even when the details are correct, you may not see them in data or reports since companies, like Alphabet, like to keep their coolest programs fairly secret until they have moved on to the next cool thing.

So, what’s a compensation professional like yourself supposed to do? First, remember that you have access to the same information as everyone else. But, now you know that you should analyze with a very critical eye. More data sets are better than less, because they allow you to compare and contrast. When in doubt, go to the source. If you ask, they will usually try and help. Lastly, do what makes sense for your needs and use the data as a basic set of guidelines that define the far edges of potential reality.

Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture and has been deeply involved in equity compensation for a long, long time. Dan has written several industry resources including the recent 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 a few other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

SEP Street and WIIFM Way

Performance problems hang out in specific locations. All the dysfunctional behaviors seem to gather in a toxic cluster at the intersection of SEP Street and WIIFM Way. The road named for "Someone Else's Problem" is a narrow corridor twisting between solid walls that block off views on either side. The "What's In It For Me" path gets more traffic. It also attracts much attention because it is a slippery surface that manages to run downhill in both directions. WIIFM Way dead-ends at the SEP Street garbage dump labeled The Selfish Indifference Center.  Kindred spirits congregate there.

Funny, that a few months ago I had drafted the core of these thoughts about how patterns form in the ways things go wrong, when lo and behold, fellow regular Chuck Czismar posted on the same topic.

Rather than discuss one example of sensible economic behavioral bias, let's consider the process as a journey. Which path was the start? Which is the finish? My theory is that SEP Street travelers arrived there from WIIFM Way. Those indifferent to consequences affecting others (those who are "not-me") find themselves sliding down the easy greasy slime of WIIFM Way to the crowded but lonely Selfish Indifference Center at SEP Street. The home of the heartless is filled with like narcissistic egoists all obsessing each about themselves, incapable of empathy with their fellow bottom-dwellers. They find it natural to exploit and victimize others because they lack the emotional stability or psychological governors that monitor and control normal behaviors.

Self-centered people obsessed with personal advantage can be remarkably callous to the needs of others. As far as they are concerned, no one else on earth comes before themselves; and they act accordingly. Innumerable observers have noted that people always do exactly what they want to do. Unfortunately, not everyone is capable of benevolence or concern for others. Even worse, a number of those soulless unfeeling walking dead have learned how to simulate socially acceptable behavior. Sociopaths can intellectualize to imitate emotions that are instinctive in normal personalities.

Modern technology has popularized evil and made its presence more overt today. While deleting the usual scam emails I receive each day, it became obvious how the Internet has simplified criminal behavior. Just a matter of a few keystrokes ... maybe the application of a language translation program ... and a few thousand deceptive solicitations are launched into the ether for global distribution. Sending out electronic thieves is easy. No need to leave the comfort of your home to loiter sweating or shivering in a dark alley waiting for a potential victim to pass, either.

Hate to admit it, but there are some seriously bad people out there. Given enough time, you will encounter them. They will show themselves by their actions.  If employees, it becomes our responsibility to deal with them: to identify them and to deflect or  discourage their offenses.  Moreover, we need to create tripwires and maintain defenses against the depredations of exploiters who see all others as potential victims.  Hope that falls within your Total Rewards skill set!

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience. After corporate HR jobs in manufacturing, he consulted to various industries throughout North America, became Senior Associate of pay survey software publisher ERI and returned to consulting in 2015. A prolific writer (author of the Performance Management Workbook) and speaker, Jim gave expert witness testimony in many reasonable executive compensation cases and also serves on the Advisory Board of the Compensation and Benefits Review.

Image courtesy of Chris Dobyns

A Chrome Panda Predicts Demise of Stock Options

On May 7, 2016, it was reported that a giant chrome panda predicted the imminent crippling of stock options in the Silicon Valley. Dropbox has been a star of the unicorn sector. But, in October of 2015 and again in April of 2016, their value was written down by major mutual funds, including Fidelity. With their unicorn value and subsequent write down, they have become a high tech “canary in the coal mine” for employee stock options.

Just last month Dropbox moved into new digs in San Francisco. In their lobby, they installed a giant chrome panda (their mascot) that is meant to welcome guests with an iconic Bay Area flair of irreverence. The bad news is commissioning and installing an expensive statue does not show that you understand or agree with the recent write down of your value. The good news is that DropBox understands this and added a sign next to the panda that explains the panda wasn’t “the right call”.

In the name of responsible spending, the company has announced it is cutting back on a range of non-cash perks and conveniences. These are smart moves but we compensation professionals know the real money is in base pay and long-term incentives. Base pay is the last thing to be touched, so that leaves LTI if the current measures aren’t enough.

The purchase of the panda and the recognition of it being a mistake are pretty accurate metaphors for the over-reliance of stock options and other forms of equity in the tech sector specifically in the San Francisco Bay Area. (You may notice that since I grew up in San Jose, I often distinguish between San Francisco and the Silicon Valley, which are two fairly different places that share VC money, equity compensation and little else.) As I have mentioned throughout this “Stock Options on the Precipice” series (earlier articles: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10), equity compensation often relies on suspect survey data and company values. This is never more apparent than when the funding dries up, IPOs slow to a trickle and pre-IPO companies become easy acquisition targets for those companies who have already survived the gauntlet.

What most people don't discuss is that the fairly easy gains that come from IPOs often help drive the growth in values of publicly traded companies in those same sectors. When the IPO pace slows it usually takes about a year for the same pressures to drive down publicly traded stock prices. This can be devastating to compensation programs that have been built on the expectation of long-term continuous growth. The current bull market has pushed forward for around 7 years. Historically, these types of markets seldom last more than four years.

When these boom periods end, we see compensation programs implode and companies scramble for foothold in a world where survey data means nothing and history provides no indication of the future. Smart companies are currently working to determine how they will handle underwater legacy equity, compensation philosophies that depend on data that no longer exists and equity plans that have never been used in a down market. Thought is being put into how to protect current Employee Stock Purchase Plans and create new ESPPs that are better suited for a different environment. Performance metrics are being tested and plans are being reviewed for flexibility.

But, mostly, stock options are being scrutinized. Do you stop granting them now in anticipation that they will just end up underwater? Do you shorten the lives of new options so they expire and return to the plan much faster if they do fall underwater? Do you change your method for determining grant sizes since processes based both in dollars and numbers of shares may not work when your stock price is half, or even a tenth, of the current price?

Just think, all of this predicted by a chrome panda that probably should have never been created in the first place. I can't wait to hear about the fun and maybe ridiculous things that your companies (current or former) threw money at when it turned out not to be a good idea. Even better would be the stories of escaping from equity compensation that was no longer compensatory and likely demotivational.

Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture and has been deeply involved in equity compensation for a long, long time. Dan has written several inustry respurces including the recent Performance-Based Equity Compensation. He has co-authored “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives” and a few other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

The Misallocation Dilemma

More and more money to fewer and fewer people seems to be the trend today. Pundits raging at overpaid CEOs indignantly declare that regular workers instead should benefit from the obviously “excessive” sums paid to top executives. Even as some argue for greater entitlements to regular employees , other groups agitate for broader universal wealth sharing.

Multimillionaire politicians claim they fight for “the middle class,” while carefully tiptoeing around discussions of the class margins. “Upper class” and “lower class” are toxic terms rarely heard except from extremists glorying in the rewards they get by exploiting opportunities for class warfare. “Working class” might be another euphemism for the average citizen, but who in America today does not work for a living? The retired and the unemployed, I guess.

Government routinely cost-shifts social benefit expenses into employer payroll burden. We in the total rewards profession see that every day. Overtime rules, family care supports, health insurance requirements, taxes… the list of categories that siphon away dollars appears endless and constantly expands. At least, few seem to disappear..

Chambers of Commerce call for business-friendly policies that give their members a free hand in how they create, expend and distribute income.

Unions call for higher minimum wages while lobbying hard behind the scenes to insert exemptions (called loopholes when they apply to their enemies) for themselves.  

It is remarkably easy to for special interest groups to advocate new costs that won’t apply to them but will handicap their rivals. Each group jockeys for a more favorable upstream position from which they can most swiftly, efficiently and permanently divert funds for their own purposes.

When everyone competes for a piece of a scarce resource like employment income, the distribution allocation might be expected to follow some academic formula. What is it? And what is really happening instead? If reality is not matching theory, I would expect all sorts of ivory tower eggheads with advanced degrees in labor economics would have spoken up to enlighten us mere compensation practitioners stuck in the mud of ground-level reality.

The phenomenal sums piled into the pockets of a few at the top of the corporate pyramids are easy targets for criticism. Despite the fact that dividing any “excessive” pot among regular employees might only buy each a single pizza, invidious comparisons make wonderfully effective sound bites. Those whose causes are better advanced by emotional reactions than by reasoned analyses will always choose the simpler way.  Demagogues never let facts interfere with opportunities to provoke useful indignation and productive outrage. 

Meanwhile, we who frequent this corner of the total rewards world tend to obsess about the many challenges we face dealing with all the complexity we find behind wages, salaries, bonuses stock options and fringe benefits. Then legislators pass new laws to criminalize "unfairness" and make our jobs ever harder!

Buried in the minutia of legal compliance tasks, we rarely ask the larger question:  What is the social responsibility of those of us in the compensation trade?

E. James (Jim) Brennan is an independent HR advisor with extensive total rewards experience.  A prolific writer (author of the Performance Management Workbook), speaker and board-certified executive compensation expert witness, he also sits on the Advisory Board of the Compensation and Benefits Review.

"Share money" image by kkojang, courtesy of Freedigitalphotos.net

Forget Average. Escape the Middle. Lead.

Compensation people should inspire leaders to supply achievement objectives beyond simple imitation and blind followership.  To succeed, we need to capture the imagination with catchy phrases.  

Total rewards practitioners in most organizations are still compelled to imitate rather than create.  “What are our competitors doing?” is constantly asked by top management.  Then, orders to copy that consensus prevalent practice follow.  No one is surprised by unexceptional results because the guidance was likewise the product of modest conservative expectations. 

True innovators are hard to find.  Those who gain media attention and conduct profitable speaking tours as innovators tend to be opportunistic exploiters from outside our profession.  Entertaining profiteers hijack tradecraft terms and frame their frequently trite messages in overly simplistic prescriptions that are are easily swallowed by an uninformed public.  Complex issues rarely have easy solutions.  Slogans that sell books and make headlines don’t always translate well into real practice with real people in real organizations.

A major part of the problem may come from the apparent inability of compensation experts to communicate valid needs for variations in concise terms simple enough for senior executives to grasp and understand.  We must come up with better short memorable phrases that create head-slap moments of revelation.  If commercial speechwriters can successfully sell misleading (or at least partially defective) concepts, why can’t we sell superior ideas?  Let’s work together to fight the desire to huddle together in mediocrity!  Create better catchphrases. 

The typical targets involve dull statistical terms.  The mean is the average, the sum of all values divided by the number of observations.  The mode is the most common case.  The median is the precise middle.  An average or central value defines what is mediocre.  We can do better than that!  Now, let’s build on those concepts…

Average is an insult when applied in performance ratings because it means “nothing special.”  Most common is never used to describe the best.  The median is neither high nor low but simply the center… precisely routine.  So-so gets a shrug while great earns admiration.  Which phrases reflect your aspirations?  How many organizations strive to be undistinguished barely-noticed members of a crowded cluster group?  Who wants to work at a boring mediocre organization?

The real action is at the outliers.  Extremes are the exceptions.  Do you want to excel at the top or settle in comfortably with the mass in the middle?  Distinction requires contrast. 

Leaders precede the rest, showing new directions for followers.  Trailblazers go ahead of the pack.  The best don’t meekly fall in at the rear to crawl up towards the crowded center.  The path most taken eventually gets muddy and nearly impassible in bad weather.  That sure doesn’t sound like “the safest” course to follow all the time, unless you want to  end up where everyone else went, arriving long after they beat you there. 

The optimal outcome from imitating others is only a tie.  Winners act smartest first, define what is best and initiate the methods others scramble to copy.  Leaders don't depend on others to guide them.  No one ever got ahead by following the group. 

Turkeys flock together; eagles fly alone.  Your toughest rival appears in the mirror.  Don’t be a lemming; set your own course.  Imitators simply follow.  Although every compass points north, that is not always the right direction to go. 

While it is useful for context to know what the norm is, no enterprise seeks mediocrity.  The cry to action should be, “Now that we know where everyone stands, how can we leap over them?”  The standard course of action is the most common method and merely identifies the comfortable center location where all the unambitious copycats cluster.  Only insecure executives need reassurance that they can defend feeble actions by pointing to a large mass of fellow low-achievers who lack the courage and foresight to take a different path for leadership.  Make a choice to seek safety in the middle where mutual support and finger-pointing excuses abound or boldly stride into the lonely dangerous zones where better new ways produce breakthroughs. 

Too verbose?  Shrink them.  What other short pithy memorable phrases can you suggest? 

E. James (Jim) Brennan is an independent consultant with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution.  After HR corporate jobs in chemical/pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until 2015.  A prolific writer (author of the Performance Management Workbook) and speaker, he gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service.  Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Vancouver BC train station tulips photo by E. James (Jim) Brennan

Extreme Pay Transparency

Editor's Note:  We are thrilled to welcome Stephanie Thomas back to the line-up of regular Café contributors!

Something interesting happened at Google a few weeks ago. Erica Baker, a former engineer at Google, created an experiment in extreme pay transparency: she and her colleagues started a spreadsheet detailing their names, job titles, and salaries.

Here's how she described the experiment in a series of Tweets:

One Sunday, some former coworkers & I were bored, talking about salaries on the internal social network instance. A spreadsheet was created... It took off like wildfire... It got reshared all over the place. People started adding pivot tables that did spreadsheet magic that highlighted not great things re:pay... More reshares. More people adding pay. It became a thing... The world didn't end. Everything didn't go up in flames because salaries got shared.

Erica Baker's experiment, described as "extreme salary transparency", has everyone from practitioners to academics to the news media asking the question: how transparent should we be?

This is a difficult question that is further complicated by a fluid definition of "transparency". To some, transparency means full disclosure of personally identifiable raw naked data. To others, transparency means pay process transparency - communicating to employees how compensation decisions are made and providing them with enough information to really understand those decisions. I fully support process transparency, but something about sharing individual employee-level detail just doesn't sit right...

To me, Erica Baker's spreadsheet feels a lot like extreme oversharing, akin to posting status updates to Facebook every 15 minutes. But then again, I'm a Gen-Xer who was taught at a young age that it was impolite to discuss compensation, you didn't ask people how much they earned, and you certainly did not voluntarily disclose how much you were earning.

Younger members of the workforce feel very differently. They've grown up with social media, and many of them broadcast all aspects of their lives on Periscope, Tumblr, and Instagram (they left Facebook after their moms and dads joined). It's only natural that they comfortably and willingly share all of the details of their compensation packages with one another. Social sharing is part of who they are as people.

What should we make of this experiment in extreme pay transparency? I have mixed feelings. The first thing that comes to mind is that this is a risky proposition. Sharing such detailed information creates the potential for feelings of unfairness - if I view myself as "equal" to you and learn that you are earning more than me, I'm likely to feel like I've been treated unfairly. This can not only create all of the disengagement problems my Café colleagues have discussed in the past, it can also damage the working relationships among colleagues. This can have a negative impact on productivity, which in turn can negatively affect the bottom line of the organization.

On the other hand, some are arguing that this kind of radical transparency is the only way to identify - and eliminate - pay discrimination. I'm reminded of Lilly Ledbetter, who learned that she was suffering from pay discrimination through an anonymous note left in her work locker. I can see the logic in this argument...

Ultimately, I don't know if there is a right level of transparency. Like most things, it's dependent on the context: your organizational culture, the characteristics of your workforce, and a myriad of other factors. The risks and benefits need to be evaluated against these constraints. Personally, I think that pay process transparency has many of the same benefits as sharing of individual salaries while minimizing risks, but that may be an outdated Gen-X perspective.

What do you think? Leave a comment - and don't forget to include your name, job title, and annual salary!

Stephanie Thomas, Ph.D., is a Lecturer in the Department of Economics at Cornell University and the Program Director for the Institute for Compensation Studies (ICS) at 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 a media outlets such as The New York Times, CBC, and NPR, and has published papers in a variety of journals.

Quitting with Grace While Gritting Your Teeth

Ever think about just clearing out your workspace one night and leaving forever, simply abandoning a rotten job and disappearing?  Suffering under a vicious boss or enduring a sweatshop environment with an unappreciative employer can tempt you to retaliate like that.  Well, dreaming about dumping a bad situation without warning is fine, as long as you keep it imaginary and act more sensibly. 

The idea may give you some silent satisfaction, but there are many reasons not to carry though on such a self-destructive course of action.  Considering the consequences of behavior is central to the total rewards profession, so compensation types should definitely know better.  Right?  Let’s talk about it.

After a recent article about a creative and positive bittersweet resignation, one online reader stated a preference for a more hostile job departure.  Obviously less happy with their job than the person in the story, their comment showed more of a desire to figuratively give their employer the finger:  “My resignation would consist of cleaning out my desk and cubicle while no one is around and splitting the scene.” 

Bad idea.  Abandoning a job with a midnight flight could haunt you the rest of your working life.  The factually negative report of your actual behavior would undercut any positive references from other employers.  You could never live it down.  One hasty careless blunder can erase any goodwill earned from years of faithful service.  Trust built up over a long time can be lost in a moment.  Destroying all future career prospects simply to satisfy a hostile urge shows a terrible lack of judgment.  It is not necessary, either.  A much more temperate positive response can be far more satisfying in the long run. 

Instead, by simply "regretfully" resigning "for a better title with higher pay at a bigger place with superior career options," you wouldn't burn any bridges.  That popular reason is usually true, too.

Furthermore, the place you are leaving would probably pay you off immediately.  Smart firms voluntarily offer pay in lieu of notice just to get happy quitters off the premises where you can't steal clients, shame management or gloat.  No boss wants a departing worker who has nothing to lose hanging around disillusioning co-workers with the many superior features of your new better employer which you just can’t wait to join.  Smart bosses realize that a nightmare scenario of dangerous subversion can be easily avoided by sending you home with pay for the remainder of your notice period. 

Announcing your intention to leave well in advance can be a very effective strategy, especially if your old evil employer pays off deserters that way.  By giving so much notice that they are forced to pay you for or a month or more, you might become free to also earn your new salary simultaneously.  If you are forced you to leave earlier without pay, your separation status changes from voluntary resignation to discharge without cause, which also entitles the victim to unemployment compensation and earlier acceptance of the new position.  I’ve done it.

Now, doesn’t that sound much better than just sneaking off like a thief in the night?  Happily doing well is a much better revenge than spiteful sulking. 

E. James (Jim) Brennan is an independent consultant with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution.  After HR corporate jobs in chemical/pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until 2015.  A prolific writer (author of the Performance Management Workbook) and speaker, he gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service.  Jim also serves on the Advisory Board of the Compensation and Benefits Review.

Image "Adult Manager Grinding His Teeth" courtesy of imagerymajestic / FreeDigitalPhotos.net

Total Rewards Social Media Update

Outside of recruiting, Human Resources has not had much of a chance to invest in social media for communication, let alone be creative. If you are itching to kick your communications into the 21st century, I am seeing signs of change, at least by those who can afford to invest in change. I thought you'd want to take notice.

Mobile apps are becoming widely available among benefit providers. Since I am using my smartphone for just about everything, and have it with me everywhere, why not pull it out of my pocket to show my Member ID? It beats fiddling around in my wallet (if I can find my wallet in my purse). And if my daughter falls on the soccer field, better to pull up the neighborhood location of an Urgent Care Clinic that I know will be in-network (while I am trying to help her into the car) than worry my way to the emergency waiting room.

Practical solutions like these do not have age-preferences the way other social media like Twitter or Facebook do. You don't have to be 28 to enjoy feeling the confidence of having critical medical insurance support anywhere, at any time.

Which is all preface to what I want to report is happening in the compensation part of the world -- last week Mercer announced an app to enable employees to, "explore career paths with their current employer." Called "Career View," it appears to be competency driven. "In addition to providing employees with essential information to make sound decisions about their career progression, it can feature short video clips of colleagues discussing their jobs with an invitation to contact them should the role be of interest to other employees as they map their career paths."

What's all the hubbub about? I created a competency-driven career path framework like Mercer is using for Vanguard once upon a time. It was very satisfying to do because it was a way of showing employees that they had transferable abilities that could bridge them into new career areas. But this essentially three dimensional process (I can grow my current skills, I can move up in my own specialty area, I can use my abilities to bridge into another career area) had to be explained on paper at that time. Today, using an app, the navigation and interactivity is not only available to me, the eager rock star, but I can personalize it and keep it in my back pocket to pull out when I'm hanging at Starbucks.

Don't kid yourself, you will probably not be jumping into the app development world any time soon, as they take time, money and real skill to do well. But there are customizable options becoming available right now that could make you a real hero with your employees. Mercer happens to be the first out of the pack in the career development world, but that just means there will be lots more options, including some version of comp, very soon. Think incentives or sales compensation, for instance.

Good communication in 2015 is designed to solve problems (fast), be interactive and provide value so the user continually comes back for the solution. Convenience is addictive -- and it would be to Human Resources benefit to become a bit addictive, don't you think?

Summer reading or influence building? Get yourself a copy of  Everything You Do (in Compensation) Is Communication @ www.everythingiscommunication.com, the convenient website where you can grab our popular eBook. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal at Towers Watson.

Rewards and Punishments for Internet Statements

Both rewards and punishments can flow to those who use the Internet, where anything you say becomes a permanent record of who you are.  Sometimes that is wonderful, if a post reveals an admirable quality that earns appreciation and praise.  Sometimes Internet sharing is hazardous, because a careless comment can cost you your job.

A recent article about a Facebook post shows how treating a social network like a private personal diary can rebound with negative employment consequences. 

“I start my new job today, but I absolutely hate working at daycares.” 
    Then she took it one step further:
“LOL, it’s all good, I just really hate being around a lot of kids.”

Unfortunately, someone forwarded her dangerously thoughtless words to the daycare.  Needless to say, her job offer was withdrawn before she could even start work.  Her quick apologies (“I have a child, myself! “I don’t hate children. I have my own…I love her.”) were futile.  Too rash, too little, too late.

Wake up, people!  The Web is a globally linked decentralized communications system with a perfect memory.  When something is said out loud, it can be missed or quickly forgotten.  But once a casual comment is keyed into the ether, it is recorded, stored and launched on multiple trajectories to land anywhere where it can be seen by everyone eternally thereafter.  An Internet comment is like a shotgun blast:  it might ricochet all over the place and hit unintended targets.  And it can bounce around forever.  Unless you are one of those modern media “personalities” known for being notorious, repeated broadcasts of your words may not operate to your advantage.

Normal people can’t behave like media darlings.  Even the blunders of the rich and famous whose foibles fill our “news” brings them more fortune.  There seems to be an endless parade of apparently talentless characters regularly featured in the electronic and pulp publications.  Frequently known by one-word names, the more they misbehave, the more advertisers flock to enrich them.  But they are statistical outliers, a mere handful in a world filled with hard-working people whose incomes depend on quiet productivity rather than empty entertainment.  When regular folks attract the wrong kind of attention, the compensation repercussions can be catastrophic. 

People often forget that there is another side to the total rewards function beyond its role as a cornucopia from which flows an endless stream of goodies.  HR people also have the ability to withhold positive awards and to invoke negative responses:  like cutting increases or terminating employment.  Organizations that pay workers to make a product or supply a service tend to avoid applicants who could make them look bad.  Firms also take preventive measures to discourage employees from biting the hand that feeds them.  Certain specific deterrents are illegal, but companies are generally permitted to enforce most policies designed to avert otherwise unprotected activities they they choose to forbid.   You can get in trouble at work for what you do at play.

Unless you are being paid to make reckless comments and attract attention, take care with what you say online.  The WorldWideWeb is an immense public bulletin board where every entry is recorded and backed up for historical reference.  Although the words you share in the Internet could last forever,  you may not survive their short-term effect. 

As HR professionals, we have a lot to say about organizational rewards and behavioral consequences.  Therefore, we should share this cautionary advice with youngsters less aware than we are of the lifetime consequences of impulsive online actions.  Today’s rash post could produce undesirable results that forever end your career dreams for tomorrow.  Forewarned is forearmed.

Start with your responses here!

E. James (Jim) Brennan was Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. After over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.), serves on the Advisory Board of the Compensation and Benefits Review and will express his opinion on almost anything.

Image "Smiley 3D" courtesy of Idea go/FreeDigitalPhotos.net

The Devil and the HR Director

While talent is valued, the Human Resources function is depreciated.  Doesn’t that say something?

At the same time that society defends the right of individuals to display valuable aspects of their work history, the Human Resources profession seems to earn insults.  Maybe we deserve it, when you see companies restricting their employee’s right to brag about their service at a major firm.  The employment contract imposed by HR in the referenced court case failed to pass muster in California, of course, where they have some of the most worker-friendly laws.

“Although the underlying lawsuit is a fairly typical dispute between employer and departed employees, this case raises questions about Europe’s efforts to erase truthful online search results (the so-called 'right to be forgotten'). In effect, Robert Half sought to publicly erase truthful information about former employees’ connections to it.”

Obviously, attorneys wrote the tainted contract and attempted to enforce it in California (even dumber), but employment agreements do fall into the category of reward value topics central to Human Resource management.  When HR people permit such unwise abusive practices, they give us all a black eye.  An already negative image is not rehabilitated by more horror stories.

Some of us remember the shocking best-seller Up the Organization.  Its famously iconoclastic CEO author credited his celebrated success to his complete elimination of the HR/personnel departments that, in his opinion, simply stifled talent.  Humorist Scott Adams’s  depiction of Catbert the Evil HR Director must resonate widely, because the Dilbert cartoon regularly features the malicious shenanigans of that recurring character.  We should have seen it coming, because I remember from long ago a wonderful single-frame cartoon showing an employment interviewer reaching a glad hand over his desk towards a befuddled applicant, saying, “You say you don’t know the identity of your father?  We have just the place for you in Personnel!”  The use of “Personnel” for the more modern "Human Resources" term gives some idea of how long ago that was published. 

Even worse, I just finished a new military science fiction novel of the type generally called “space opera”  where the author, a retired Naval Academy graduate, inserted the following conversational exchange:

“If those units get out into the city, we’ll have the human resource director’s own time trying to catch them.”

Safir nodded.…“Did you know that people used to say the devil instead of the human resource director?”

“What’s the devil?” Kai asked.

“Something liker a human resource director, I guess.”

In a world increasingly obsessed by popularity, HR is unpopular and seen as manevolently manipulative.

What have we done to earn such disfavor?  Of course, those who specialize in total rewards can deny any responsibility for the usual offensive behavior of employment recruiters (joke… just kidding, having spent my time, etc.,…  ;-), but you would think that the public attitude towards HR should be more positive.  Doesn’t being the dispensers of jobs, pay increases, bonuses and such goodies win us some appreciation?  I guess not.  There are no TV shows, few (if any) books or movies and only one cartoon strip with positive views of HR people.  HR has a bad reputation.

My personal theories for the reasons would be inadequate, coming from one narrow personal viewpoint.  Instead, let me open up the discussion to solicit suggestions from the thousands of Compensation Café readers.  No one should have a better perspective on the image of our broader profession than those who are constantly dealing with wages, salaries, total rewards, incentives, both positive and negative consequences for performance, benefits and employee engagement issues.  After all, don’t we have a saying about people who proclaim, “I belong in HR because I love dealing with people”? 

Where have we failed? 

E. James (Jim) Brennan was Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. After over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.), serves on the Advisory Board of the Compensation and Benefits Review and will express his opinion on almost anything.

Creative Commons image "l'il devil" by Clyde Robinson