Performensation is pleased to announce that Sam Reeve, Performensation’s Executive Vice President of Consulting Services, will be presenting on four topics at the BLR Thrive 2016 annual conference, May 12-13, 2016 in Las Vegas!
Sam is a well-regarded compensation leader with broad and deep experience across many industries and virtually every size of company. Come to Las Vegas and spend a little one on one time learning more from Sam.
Lebron James has just become the youngest person in NBA history to score 25,000 points in his career. He is not yet 31 years old. You are not Lebron James. It is an obvious fact. You are not 6’8”. You are not 250 lbs. of muscle. You cannot dribble a basketball while running faster than your neighbor being chased by a bear. You cannot leap 3 and half feet into air and gracefully land with a smile. You haven’t spent your entire life optimizing your skills and talents to be the best basketball player in the world. You know this.
Yes, you may be about 31 years old. Maybe you weigh 250 lbs. You might even be 6’8”. Even if these things were true, it would be a mistake to directly compare yourself to Lebron. Lebron is fun to watch, but at no point would you fool yourself into believing you can do what he does. Even those players who contend with him for the title of “best basketball player” don’t try to do things the way Lebron does.
We talk a lot about pay transparency. It seems like half the time half of compensation professionals argue for more and half argue for less. New Belgium Brewing is a company who does a great job at being open. In fact, they are so good that they are an example used by the media, other companies and even the U.S. Government. More importantly, they seem like great company.
Kim Jordan, the cofounder of New Belgium, has made it a priority to make sure the company is always paying a living wage. Her passion for making sure everyone at New Belgium has the opportunity to thrive is an essential component of Continue reading →
An article was published last week with data from Aon Hewitt and Towers Watson that showed the annual pay raise is essentially dead (and in Towers Watson’s case, bonus pools will also be underfunded). The data apparently shows that we will deliver base pay as a flat amount going forward. Increases in pay will come from incentive plans, if they are funded. Let’s cast a fond farewell to a method of pay that has existed for as long as people have been paid.
I was reading a Facebook message a parent posted about their kid’s physics homework and it resonated as a reminder for the compensation world. The question was how do you explain the differences between speed, velocity and acceleration. A few years ago, I wrote an article about Newton’s Three Laws of Compensation Motion and I guess it’s time for another physics lesson.
Speed is a point on a graph. It tells you a whole bunch about an instant. Much of the data we use in compensation is like this. We know exactly the amount or percentage, but we have little information regarding the path to that point. We feel like we somehow already have this information, but in most cases it’s a deception. Most pay data provides as little Continue reading →
I just watched a great TED talk from a few years ago. In it, Todd Rose discusses the “average” in the context of creating learning environments. He provides a fascinating story about the U.S. Air Force and their path to creating effective fighter jets. Just a quick summary: The first cockpits built were based on a series of measurements for the average pilot. But, even as the jets became better and better, the Air Force experienced worse and worse accidents. In the meantime, someone decided to measure a whole bunch of pilots. Surprise! Not a single pilot matched the set of average measurements.
You probably see where I am going with this.
The Air Force took this new information and created new cockpit guidelines that allowed pilots at the extremes to be comfortable. Of course, manufacturers protested, but in the end they built to the new requirements. This necessitated innovations like moveable seats and adjustable controls (where do you think your car got these innovations.) In the end, the new planes had far fewer accidents and much happier pilots. And, everyone lived happily ever after. The end.
At least 50% of those that reach out to me start the conversation by asking, “what does everyone else do.” We all know that the vast majority of companies target the 50th percentile for almost every position. Companies want to build simple vanilla pay programs even when they Continue reading →
First, I want to make it clear that plenty of CEOs are paid way too much money, but most are probably paid in accordance with the value they deliver. But, that is a topic for another post.
Let’s talk about how much CEOs get paid. I took a quick look at the CEO pay for the 2013 Fortune 100. In 2013, these 100 individuals were paid cumulative compensation of $918M! That is a lot of money; in fact, it’s a smack in the face. They are paid so much obviously they must be the most heavy-hitting movers and shakers among the wealthiest people in our country. So, I checked the 2015 list of Fortune’s 400 wealthiest Americans*.
Many of you may have read about Gravity Payments, the company in Seattle, Washington with the magnanimous CEO who decided to do the right thing. In April the CEO, Dan Price (great name for a comp article), decided to cut his own pay from $1Miliion to $70,000 annually and use the difference to provide raises in base pay to nearly the entire company. His goal was a minimum base pay of $70,000 for everyone. How could this possible go wrong? And, the media asked, “Why can’t everyone see how wonderful this is and do the same thing.”
Compensation professionals may immediately see some holes in this logic, but let’s list some of big items so we are Continue reading →
On August 5, 2015 the SEC voted to approve a new rule on the disclosure of the ratio of CEO pay to that of the median employee. This rule was a requirement of the Dodd-Frank Law passed in 2010. The details of the rule and what companies must do to prepare for it are all over the internet. This article covers what we can expect as a result over the next several years. Continue reading →
Over the last few years, we have seen a rise in attention to the all too common, “HR Department of One”. These jacks-and-jills-of-all-trades, (and master of many), must be the policy maker, recruiter, trainer, confidant and much more for many companies. Often, on this very site, we talk about “compensation departments and compensation professionals” as if every company has one or both. But, what if, as is often the case, a company has NO compensation professional on staff? Or, what if the company has a great compensation analyst with little or no training in executive compensation, sales compensation or some other important specialty?