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

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 Best Performance Goals Are D.U.M.B.

untitledAnyone who has taken a class or performed a Google-search on performance goals has learned about the concept of “SMART” goals. The most common breakdown seems to be: S – Specific, M – Measureable, A – Attainable, R – Relevant, and T – Time-bound. We all seem to know this and yet many still seem to have problems creating successful pay for performance programs. I would like to propose a new D.U.M.B. approach that celebrates the spirit of insanity.  Insanity is being defined as the repetition of doing the same thing, again and again, with the expectation of different results. If SMART goals aren’t working for you, why not try DUMB goals?

D.U.M.B Goals are: Continue reading