That List of the Highest Paying Companies is WRONG!

money greedy guy sq (2)A report from 24/7 Wall St. touting the “25 highest paying companies in America” is being passed around the internet as factual news. Unfortunately, like so many compensation stories, the report is all sizzle and no meat. People love to cheer or complain about pay. The list that was provided makes it easy by using “facts” that are not really “facts”.

The report claims that Continue reading

Parental Leave in San Francisco: Another Pay-Related Reason to Hire Baby Boomers

hand and baby feet-sq (2)San Francisco just became the first city in the US to ensure 100% paid leave for new parents. This covers both mothers and/or fathers. This new rule is effective January 1, 2017 for employers with more than 50 employees. Companies with between 20 and 49 employees have until January 1, 2018. While this is a great thing, is it just another reason to avoid hiring Millennials? Perhaps this is all a conspiracy to improve the long-term retention of baby boomers.

55% of parental pay was already covered by a statewide initiative. Companies will be responsible for Continue reading

Speed, Velocity and Acceleration in Pay

untitledI 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

Three Ways Average Companies Pay Their Employees

untitledI 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

Paying Everyone Equally is a Terrible Idea

untitledMany 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

5 Lessons for a Compensation Department of None

untitledOver 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?

Many successful companies operate with Continue reading

There are Only Two Pay Philosophies

untitledWe, the compensation professionals of planet earth, work hard to define the whys and hows of our pay programs. We build out details on our objectives for pay levels, definitions of peers, pay mix and plan details. We define the purpose of each pay element and its alignment to the company, shareholders, individuals and in some cases, the world itself. We put all of this together into words, rules, charts and slides and call it our compensation philosophy. I have been, for as long I have worked in this profession, a huge advocate of great compensation philosophies.

Like many of you, 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

The Secret ALL GREAT Companies Know About Pay

Performensation1I generally write about incentive compensation, executive compensation and performance issues, but today’s post is written from a very different perspective. I hope you will bear with me on this.

“Living Wage” is a term thrown about casually in the media and among politicians. It is not minimum wage. In fact, it has a very specific definition (read more on it here). A living wage ensures individuals make enough for their family to exceed the poverty
threshold. I think even that definition falls short of reality.

But, this post isn’t about the political ramifications of a minimum wage or a living wage. It is not about altruism, or what is doing the “right thing”. It is far more self-serving, perhaps even selfish. This is about how paying people better can result in Continue reading

A Lack of Company Enthusiasm Doesn’t Mean a Lack of Job Passion

Stickman Food Vendor Job PassionI was at a sold-out sporting event recently. The sport, as it turns out, doesn’t matter. Neither does the team. Heck, even the players are unimportant. I learned something great from a woman selling burgers and beer. I was reminded that you don’t need to love your company or its mission to be an incredibly valuable employee. I was also reminded, once again, that our lowest paid staff members are not simply interchangeable parts. Every one of them can make just as big an impact as our highest paid “stars”. Continue reading