Pay for performance continues to grow as a solution for motivating people in a world of flat compensation. The title of this post probably had you thinking about incentive plans that required real goals to be met before payment was earned. Maybe you thought about one of your programs where people got paid even when performance wasn’t great. While these are common themes in motivational pay, this post is about an entirely different kind of teeth.
As a frequent flyer, I have the joy of flying on several airlines every year. Sometimes they are great, sometimes they are not. In every case I try to consider how pay programs contributed to the success or failure of my voyage. My most recent trip was a great example of failure. On the bright side it helped drive home the fact that we need to remember a second kind of teeth when we create pay programs. These teeth are located on each gear and cog, each task and job.
Like most businesses airlines operate through a series of discrete, but ultimately connected, departments. Just as important as each area doing a great job on its own is the link between that area and the next. Like gears, each department must be surrounded by teeth that mesh with those around it. When teeth are missing, or not in sync, performance suffers. But what if there are no teeth at all?
I am assuming that most of the people at the airline in question were competent. I am also assuming that most have some personal pride in their work. I would even guess that many work strongly as teams. Unfortunately, it seemed as though none of the employees had any real motivation to make sure that their efforts supported, or drove, those of anyone else. In fact, it seemed like many toothless wheels spinning side by side with no link between them.
Success in one area had no impact on the next. Failure in one area was not acknowledged or accommodated by the next. Rather than flying an airline, it felt more like we used a baggage check-in service and then moved to a new company who provided security. We then went to a transportation service that did not know when or where our flight was. While navigating these independent entities, the plane appeared to be staffed by yet another unique company who received no communication that many passengers were stuck in earlier steps. After the plane left without several passengers, we went to a customer service desk that seemed to neither care about the prior issues nor have any reason to provide a workable solution. Each step was staffed by nice people without any real motivation to make those before and after them look good. I am sure most thought they were not part of the problem.
Sadly, I saw only one common connecting factor. There was a single manager who I saw at the check-in desk, and later at the customer service counter, and hours later at one of the gates. This single person seemed to have some type of internal, or external, motivation to make everything work. Of course, she may have been able to fix some of the things some of the time, but having her running all over the place didn’t seem like an effective solution.
Many companies have incentive plans without links between individuals, teams, departments and the company as a whole. I often wonder if they know the teeth are missing. Some seem to believe that having one big gear based only on company success solves the problem. But, each individual and group must still be aligned and linked to that gear in some understandable way. Some have built many small gears based on tasks and processes, but these have little or no link to each other or their success as a whole. Every part must mesh for the whole to be useful.
When you evaluate the success of your incentive plans during this year pay special attention to understanding and documenting how each plan, metric and goal is helping or hindering the success of those around it. Often the neglected teeth of joint interaction are more important than the obvious teeth of big paychecks and promotions.
Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture. Do you want to know more about, Performance-Based Equity Compensation? Dan also cowrote “Everything You Do in COMPENSATION IS COMMUNICATION”, with Comp Café writers, Ann Bares and Margaret O’Hanlon. And believe it or not, he has co-authored “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives.” Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.
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