When the Chef Visits Your Table

untitledSales compensation is an uncomfortable area for many compensation professionals. Many of us have never been professional sales people. Many of us don’t have the technical modeling expertise to flesh out these plans. The plans don’t operate the same way as most incentive plans. Sales people do not react to pay programs the same way as most other employees. Sales managers often are simply great sales people who have been put in charge of similar, but less great, sales people. Often we are tasked with supporting or communicating a plan when we have had little interaction during the fact finding and design phases. With all the being said, let’s talk about sales comp!

I recently spoke to a company that is Continue reading

A Chrome Panda Predicts Demise of Stock Options

6a0134836082f8970c01b7c8585e9e970b-200wiOn 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 Continue reading

You are Not Lebron James (or Facebook, or Google)

6a0134836082f8970c01bb088b1ce3970d-800wiLebron 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.

Your company is also not Facebook or Google. Your product is Continue reading

Delicious Amber Transparency

6a0134836082f8970c01b7c7e30888970b-200wiWe 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

eHarmony Gets It! It’s About Professional Relationships

12 pillars sunset square (2)In today’s news, eHarmony announced that they are planning to expand from personal to professional matchmaking. Performensation has long held that finding the right people to work for your company is attuned to online dating. Like finding your true love, every employee wants to work at a company that “gets him or her”.

In the past, many employers held the power position. Companies believed that if they were providing jobs that paid a fair wage with decent working conditions, then people should be happy to work for them.  In today’s world, this is no longer enough. Just like Continue reading

Silence Isn’t Golden

untitled1I hope your employees aren’t complaining about your compensation programs. If they are complaining out loud, then the problem has likely been there for a while and you need to address it post haste. But, that’s not what this article is about. We all can, and do, identify problems as they become vocal. I want to talk about compensation programs that people aren’t complaining about.

Most of us have been taught that silence is golden. That simply isn’t true in our line of business. When it comes to pay, if people aren’t talking about it then Continue reading

What Do You Do?

Stickman What Do You DoThe holiday season is now in the rear-view mirror and everyone reading this post has recently had to answer some version the question, “what exactly do you do?” Maybe you had to explain it for the umpteenth time to a family member who spent the past year sending you articles about payroll. Maybe you had to explain it to someone who blames you, personally, for the disparity in pay between executives and “everyone else.” Perhaps you had to deal with why you had not yet fixed the minimum wage, income taxes, health care or some other headline issue. Or, this might have been the year where the light went on and someone Continue reading

I Was Wrong. Pay for Performance Doesn’t Work!

Stickman I was wrong p4p doesnt workYou may want to disregard nearly everything I’ve ever posted here. As it turns out, I may not know anything about pay for performance. Recently, I brought someone new onto my team. This guy seemed like a great match for the position. He’s good looking, has a strong intellect along with a very unique skill set. He is exactly what we needed on the team. But now, a few weeks in, I am realizing that he is a narcissist. You may even call him a crybaby. The frustrating fact is that he simply isn’t motivated by any of the P4P Continue reading

New Book on Communicating Compensation Plans!

Everything You Do in Compensation is Communication: 3/8 of the Compensation Cafe Publishes a Book! …. $10 discount through September 30, 2014! (use code “8steps”)ewdic book cover w quote

About three years ago, a trio of cheeky compensation bloggers joined forces around an idea.  The insight that started it all – that everything (and we mean everything) we do in compensation is, in fact, communication.  When we talk and when we stay silent.  When we share details about how plans work and how awards are earned and when we keep it all under wraps.  The reality is that we are sending messages — inadvertently and often unintentionally — with every step of the compensation design, implementation and management process.

If this is true — and we believe it is — then why not get ahead of this communication process, take control and use it to make our compensation work better and more impactful?  And to increase our own influence and career success along the way?

Compensation Cafe cohorts Margaret O’Hanlon, Dan Walter and Ann Bares are pleased to announce the publication of our book.

Dreaming about ways that you can have more influence and impact in your work? To learn more and to order your own copy, please go here and get your copy today.

 

First Do No Harm

Stickman First Do No HarmPrimum non nocere. The Hippocratic Oath is one of the foundational elements of any doctor’s career. As it says on Wikipedia:

“Another way to state it is that, “given an existing problem, it may be better not to do something, or even to do nothing, than to risk causing more harm than good.” It reminds the health care provider that must consider the possible harm that any intervention might do. It is invoked when debating the use of an intervention that carries an obvious risk of harm but a less certain chance of benefit.”

Imagine if this was part of an oath that compensation professionals had to take in order to work in this industry. What would it mean to you? In the name of limited time, limited experience or just a feeling of resignation, some of us may make this a lower priority than we should.

Imagine if your heart surgeon or your child’s asthma specialist, simply stopped at “good enough.” Would you support them?

Like much in the world of medicine, compensation is part science and part art. Like a scientist, we must use the data we have available and make resolute decisions that are memorialized and can remain effective for a long time. Also like a scientist, we must be willing to accept new observations, data and change our decisions as needed.

Like an artist, we must be able to see what others may not and turn that into something tangible that can be appreciated by many. Also, like a successful artist, we must know when to stop fiddling and declare our work complete.

I was reminded of this recently while working with a client who does so much so right. When speaking to the CEO, my colleagues and I made it clear that an important objective of our project was not breaking anything that already worked well. But, the company is growing and its industry is rapidly evolving. Because they are the type of company so many people love to work for, they are planning for the future before it gets here. What a thought. Even better, what an action!

When looking at solving a problem using compensation, we must be fully aware of the potential impact any new program or change to a legacy approach may have on current successes. As a consultant, I often see new “solutions” that conflict with current practices or the company’s compensation philosophy.

Since we seldom fully analyze whether pay is actually doing what was intended, we often don’t have any idea what is or isn’t working. Without this knowledge, we are like a blindfolded doctor. Our skills and expertise may be up to the task, but we don’t give ourselves a chance to succeed.

We are often challenged and sometimes pressured into implementing changes where we have either limited supporting data or worse, no confidence in the program accomplishing its goals. Imagine if your doctor agreed to do surgery before they had ran tests. What if you were given medication before being thoroughly diagnosed?

Next time you are asked (told) to make a change to pay or roll out an entirely new compensation plan, make it clear what you need to do it before you confidentally proceed. Be aware of how the change will affect other components of HR, pay and overall management of your staff. Understand the potential downsides to any program that has fantastic upside. In other words: first do no harm.