Your Compensation Powers

Early in my career my bosses’ boss was showing me the ropes and explained that when it came to job evaluation, we in Compensation had “the strong power of recommendation.”

The idea that the best I could do was to recommend something was a little hard to swallow.  Now I understand what hierarchy means and who gets to make decisions, especially those that commit funds in one way or another when it comes to compensation and rewards.  But who is really the most qualified to do that?  Who has primary ownership of the company’s strategies for competitive positioning, internal equity, motivational rewards and recognition?

I read something recently about how someone in your company should be paying attention to the fact that as job and organization designs evolve, that may change whether a job should be exempt or nonexempt from the FLSA.  Great points made by the author, and then argued on both sides by attorneys as to you should do.  That reinforced something in my mind that I learned many years ago about attorneys; they give advice, and they get paid handsomely for that.  You can then choose to take their advice or not, and subsequently through time you will discover whether it was good or bad advice.

Now I’m starting to move myself off the ledge and back into the building because I understand that it is a compromise that answers my ranting question above.  Yes, I have access to data which needs to be a part of determining the answer to those important elements of our labor and human resources strategy.  Unfortunately though for so many practitioners these days, that’s where it stops – where “the strong power of recommendation” has been ceded to others.  Where the 50th percentile is the only answer that matters.  Is it any wonder that between the mass availability and access to on-line market data sources and few people really stepping up to demonstrate greater ownership of rewards strategies that many companies appear to be wandering (or is it wondering?) about their rewards strategies?  Oops, another rant just started…

I had a great meeting recently with another consultant who explained how he works with clients to unlock hidden value – then bases his fees on that value creation.  He gave an example of improving a client’s inventory turns and the savings that created that dropped right to their bottom line.  It is a mindset that any rewards or HR professional should have!  And it goes well beyond benchmarking, and gives you the potential to be seen less as someone who recommends and more as the business partner that most of us aspire to be.

Consider your business operations, functions and strategies.  Are sales plans changing as new markets open and new channels are developed?  Are all employees connected in some way to the annual plan in a way that gives them meaningful line-of-sight?  Have you created enough of a focus through program designs to ensure your top performers are recognized and rewarded?

Go beyond “the strong power of recommendation.” Here are a few examples of different ways to think about your business impact.

  1. When key jobs go unfilled or people in key jobs leave for a competitor, how does that affect your business? (think vacant sales territories, critical IP talent, other technical talent like IT that enables your business).
  2. We’ve all heard, “People are our most important asset.”  But really there are other fixed assets that the company pays for whether they are used or not.  Is there a rewards program that might increase productivity of those assets?
  3. Lots of studies have been done on recognition and engagement and what a difference it makes to have a greater proportion of the workforce engaged.  Who is focusing on unlocking that value?  What is your role?
  4. Your CFO can spout off the ratios and values on labor costs.  Can you?  You probably know your average compa-ratio, which is a great way to compare yourself to yourself, but without really peeling the onion back through workforce analytics, you may actually be way over- or underpaying your workforce.

I “recommend” you take some time, maybe as you prepare your goals for the new year to think differently and be less satisfied with your strong power of recommendation.

Merry Christmas, Happy Holidays and wishes for a prosperous New Year!

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *