You’ve seen the company’s search ads and heard the pitch from your recruiters; you offer competitive wages.  You figure that that’s got to be a strong hook for attracting talent.

No.

Your pay structures are regularly updated based on competitive market trends, so the reward opportunities you offer employees are aligned with your retention and motivation strategies.

Smoke and mirrors.

Companies routinely advertise “we offer competitive wages” and candidates in return expect this of potential employers.  But what happens when your goal of offering competitive pay is finally achieved?  Are employees grateful?  Can companies rest in their efforts to attract, motivate and retain?

Not so much.

The Missing Pieces

What doesn’t happen when you offer competitive pay is that your recruitment problems don’t magically disappear, your employees won’t be satisfied and your compensation programs have achieved little more than being average.  Isn’t that a “C” grade in school?  Is that how you want to position your compensation strategy?

As far as aspirations go, it’s only middle-of-the-road.

If your company does pay “the going rate,” that still means that roughly 50% of the companies out there are paying more than you.  That’s what average gets you, with half doing more and half doing less. You won’t see that fact pointed out in recruiting campaigns.

No one quits for less money – so what you’ll hear through the grapevine is how so-and-so left and is now making more somewhere else.  And as it’s human nature to hear only what supports your own notion  –  your employees won’t pay attention to the broader rewards package, just the points that confirm their opinion that your company isn’t paying enough.

The only way to avoid this scenario is to become the premier payer in your market or industry – and can you afford that cost?

It’s also important to differentiate between having grades, salary ranges and midpoints that provide competitive rate “opportunity” and actually paying employees at those rates.  Some describe this as whether the company is “walking the talk.”  I recall a client quite boastful that their salary ranges were continually adjusted to mirror market rates, but was later embarrassed to discover that their actual pay practices fell well below midpoints.  The company said one thing by their pay structure, but did another by the way they implemented that structure.

For their own part, employees relate to the pay they receive, not the midpoint of a salary range or other such declared “opportunity.”  For them the company’s competitiveness can be more illusion than fact; especially if they’re experienced and long service.

Bad Practices Can Evolve

Typically it’s not an organization’s strategy to avoid paying at competitive levels, but more likely a series of practices that have evolved over time.

• Some candidates will accept a below value hire rate and managers tend to view this as a cost savings. Though it is more like putting a skeleton into the closet and hoping it doesn’t jump out at you down the road.  One day these employees will change their minds.

• Once you’ve started down the slippery slope of paying some employees below market rates the practice is soon compounded by internal equity. Managers will resist paying similarly qualified new people more than existing employees.

• Reward systems have a hard time keeping up with the increased marketability of employees. A minimally qualified employee hired at the minimum rate will gain knowledge and experience (thus marketability) faster than the company’s annual merit system can recognize.

What’s the answer?  Management won’t agree to be the premier payer in your area, so consider instilling more flexibility into your pay practices.  Consider targeting key jobs (highly skilled, difficult to replace, mission critical, etc.) and make sure those jobholders are well paid.

And don’t forget to pay attention to your customer-facing employees.  For many a customer those folks are your company.

Other positions you have deemed less skilled and more easily replaceable could continue with your “competitive opportunity” strategy.  This approach is akin to ring-fencing key talent, protecting them against poaching while recognizing and rewarding those with the most potential impact on your business.

Bottom line?  Be careful when you claim how your company provides competitive wages.  You may not be correct, but if you are – big deal.

Over the span of my career I’ve interacted with any number of Compensation practitioners, but also with a host of wannabes, career transients and dabblers, along with more than my share of HR generalists thinking that “Anyone can do this.”  But the hardest profile I’ve had to rub shoulders with is the self-proclaimed expert who thinks that they know all and see all.

They have the right answers.  Even if they’re not a Compensation pro.

You’ve seen this type of individual before; they’re the “answer man” for every challenge that an organization can throw at them.  They always seem to know what needs to be done, and how it should be done, and their supreme confidence in themselves allows no reluctance in letting you know how proficient they are.  To put icing on the cake they typically compound their arrogance by insisting that their approach, answer, stratagem is the right way. The only way. And that other suggestions or perspectives are simply . . . wrong.

These people can be technically effective at what they do, but they often think too much of themselves and want to make sure that everyone else knows how effective they are as well.  Which irritates, doesn’t it?   These are the types you see at professional conferences, blog sites and association gatherings, arguing over issues like the Cost of Living vs. the Cost of Labor, lamenting over the death of the performance appraisal process and debating the right steps to solve the latest hot topic compensation issue.  They also are convinced that the solutions they used in the past are definitely the right course to take with today’s problems.

They’re not the personality type I’d like to have a drink with.

But I can forgive all of that (ok, most of that), if only they would show a bit of humility. If only they would get over themselves.

Management Come-Uppance

Presenting a personality of arrogant expertise in the face of any and all challenges can sometimes blind you to the particular realities of the situation being faced.  To the point where you start to force fit so-called solutions in order to match the problem.  These folks forget that when you’re dealing with people, not simply with figures, formulae and spreadsheets, what is the correct solution becomes less of a cookie cutter “let’s do this again” methodology and more how to handle a unique manifestation of specific challenges grown out of the organization, the culture, the demographics and even the management biases within their business.

So that what worked somewhere else yesterday may not work here, today.

Long term, the problems faced by these self-proclaimed experts are that;

• They alienate lesser mortals (staff and colleagues) with their arrogance, self righteousness, stubbornness  and know-it-all demeanor.  Which is not a good recipe for building an effective team effort.

• They tend to lecture senior management on what is the (only) right course of action.  Which can be a career limiting move.

• They are not good losers, believing that a decision going against them is a major mistake.  They can then become passive resisters.

Take a Lesson

No one likes to be lectured, to always be told that their ideas fall short of the proper way to do things.  If that behavior describes how you approach working with others, stop it!

When you were young and first started school your mother likely told you, “Try to get along with the other kids,” or words to that effect.  In other words, don’t stand apart but become part of the group.   In later years, by the time you gained a leadership role that admonition can be converted into “Learn the environment and listen to the employees – only then should you speak.”

Show a little humility by listening to others, by planning for unintended consequences and by anticipating “gotcha” questions and the doubt of inevitable nay sayers.  Try to understand that others, even subordinates can have effective ideas and possible solutions that are worth considering.  And that senior management may have a more complete view of an issue than simply the compensation perspective.

But most important – get over yourself.

Periodically I’ve been asked to comment on the controversial subject of raising the U.S. Federal Minimum Wage.  I say controversial because it seems as though lately the subject has taken on the sensitivities normally associated with politics and religion.  Everyone has a strong opinion, and few folks out there are willing to listen to viewpoints that differ from their own.

That being said, as a compensation practitioner of long standing I do have a few opinions that I’ll share with you.

Picture This

Close your eyes and picture for a moment the type of employee that your mind conjures up when you think, minimum wage employee.  In my view there are two possible images:

• Bobbie, the High School Kid: Not that long ago Bobbie’s image stood by itself, the high school age youngster holding down his first job. His motivation was money for gas and Saturday night dates.  The job was part time and the work didn’t require skills or even more than a day of training.  Anyone could do it.

Now Bobbie doesn’t really care about the business, about customer service, or even whether he consistently made it to work on time.  Company loyalty was a foreign concept, not even thought about, as he probably planned to stay on this particular job for only a short period of time.  He had better things to do, and just needed a few bucks to do it.  Turnover rates for the Bobbies of the world is very high.

And he doesn’t need a “living wage.”

• Robert, the Head of Household: This image is what may be considered the new face of the minimum wage issue, or at least as the media portrays it. We’re looking at a much older worker who needs a full time job and has a family to support.  What remains though, is the same low or minimum skilled individual, who for some reason cannot obtain employment more complex or valuable than that of an entry level position that offers the lowest wage out there.

How it is that Robert is working at the same job next to Bobbie is never explained; bad luck, high school dropout, having a questionable background that discourages other employers – we don’t know.  Perhaps it’s a part time second job to help out at home. But Robert is doing the same work as Bobbie.  Paying different rates could be considered discriminatory.

The Minimum Wage Job

So what jobs warrant a mandated minimum wage these days, providing only the lowest of the low pay levels?  Chances are the answer is that low or no skills are required.  What employees don’t know can be quickly learned through short term training.  These are the proverbial “anyone can do this” jobs.

But you say, what about construction workers?  Not the electricians, plumbers or carpenters, but the ditch diggers (is that even a category these days?) and generic laborers.  Or what about low skill jobs that are highly physical, very messy or even dangerous?  Here the competitive marketplace pushes pay rates up to attract workers.  Anyone can do it, perhaps, but those who want to are limited – so supply and demand push up the pay rates.

The Survey Says . . . .

For most jobs employers are not able to attract employees when they pay below market rates.  While that may be obvious for skilled positions that’s also why the ditch diggers, garbage handlers and other less desirable jobs are often paid more than what the government mandates.

Minimum wage jobs represent the floor of the labor market, where the only reason certain jobs are paid what they are is because the government (federal or state) mandates a certain pay level that supersedes competitive practice.  Without being artificially propped up these jobs would have their pay levels gravitate to what it would take to attract the right caliber of employee.

The Employer Viewpoint

Most compensation experts will tell you that a proper pay level(and you can certainly debate the exact amount) is the least amount necessary to attract, motivate a retain the right caliber of employee.  Because anything more, according to Herzberg’s Motivation Theory, will not increase your return on investment (performance, productivity, etc.).  And anything less won’t allow you to have a competent staff who is willing to remain with you.

If it was your money, and your jobs required little or no skills to perform, and the profit margin of your small business was razor thin, what would you do?  Likely you’d keep your staff as small as possible, use technology wherever you can to replace employees but pay your staff the prevailing (competitive) wage – unless you’re artificially required to pay more than the marketplace would otherwise suggest.

McDonalds has already introduced internal ordering kiosks that replace employees.

When you’re facing the loss of your business because your pay levels have become a social issue, you either fold up your tent or you cut; you cut staff, you cut hours, or even products and services, but you do whatever it takes to stay afloat. And chances are the prospect of only staying afloat was not why you went into business in the first place.

Meanwhile, all Bobbie still cares about is getting enough gas money for Saturday night, a new video game and a couple of burgers.  A raised minimum wage will not affect either his motivation, his customer service or his willingness to stay with you.  He wins, you lose.

On the other hand Robert is out on the picket line demanding a “living wage” to support a family that Bobbie doesn’t have – all for doing the same job.  But of course Bobbie will gladly accept whatever handout the government requires.  It’s all good news for him.

Should you pay the same rates to Bobbie and Robert for performing the same, low or no skilled job?  That really is the social issue on the table, isn’t it?  Perhaps it’s not a compensation issue at all.

And finally, where does the $15 rate come from?  Economic or competitive survey analysis?  Compensation professionals?  Or perhaps only from politicians and social activists.

Use of the term “Value Proposition” seems to have gone out of date in Human Resource circles, or at least I don’t hear it mentioned anymore.  Have you?  Granted, catchy buzz phrases come and go with the seasons, or so it seems, but I had thought that the value proposition as a strategic compensation focus had roots.  Perhaps the term has been replaced by a new phrase (same idea; new words).  It can be hard to keep track.

I hope though, that compensation practitioners are not losing sight of the concept, because in my humble opinion this thinking should be the 11th commandment.

For those new to Compensation the original term (in HR speak) can be described as follows:

A value proposition is a promise of value to be delivered and acknowledged and a belief from the employee that value will be delivered and experienced.  A value proposition can apply to an entire organization, or parts thereof, or employee perception, service or programs.

What the dictionary is saying is that if an employee values something, then a  promise by their employer to provide that something is considered a worthwhile strategy.

The Value of “Something”

The trick is, what is that “something?”  Because one size does not fit all.

We all want money.  Cash is king and all of that.  But pay by itself can be more of a psychological dissatisfier than most realize (remember Herzberg’s Motivation Theory?).  Because having what we consider the right amount of pay results in a neutral feeling , while anything less than the right amount is a perceived negative.  And having more?  Does that feeling even exist?  So there is little upside for the employer to paying more if the goal is employee satisfaction.

However employees in their diversity want more than just money.  They can appreciate and “value” more than the cash. It could be medical and / or other benefit coverage, low insurance premiums or deductibles, vacation time, free parking, discounted cafeteria food, liberal sick time, tuition reimbursement, even free coffee in the break room.  The list is endless.

Anything that the employee considers a reward (that which is provided or made accessible to employees) as part of the working environment is a something that will be valued.

Employers take note: what employees value they can be motivated to attain or retain (not lose).

Using The Value Proposition

This is where the “cafeteria style” benefit plans originated; the view that, if the organization focuses on delivering that which the employees consider as having personal value the return benefits (improved morale, retention, engagement, productivity, etc.) will outweigh the cost of providing that value.  And perhaps the cost doesn’t have to be any greater than what was paid out before, just better focused.

I still remember the organization where my laundry was picked up and delivered to my office door.  And where I could buy a dozen high quality long stem roses for my wife.  The charge for these services was 100% paid by the employee, but the memory of having (and later losing) those conveniences lingers to this day.  Especially with my wife!

Even considering the above merits it remains a common practice in some organizations to focus on delivering pay and pay alone; to treat employees as having one dimensional thinking and desires.  Here are managers who think that by keeping their finger on the EASY button (just pay them more) all good things will come to the organization – without breaking a sweat.

Instead, all too often they find themselves burdened by unsustainable payroll growth, while still lacking the improved morale, retention, engagement, productivity, etc. that they had assumed would follow the pay cycle.  They find little or no ROI for their simplistic knee jerk tactic of thinking that one answer (the easy one) solves all challenges.

Because they really aren’t interested in providing all that the employees consider value. That road leads to more work (complexities, time consuming, myriad answers) than if they simply pressed a payroll button.

So perhaps, at least in some quarters, the Value Proposition hasn’t disappeared after all, but is just ignored.

But not with your organization, right?

I once lived in England for five years as an expatriate, and during that time my team took great pleasure in confusing me with English words that held little meaning for an American.  Often times I could repeat the words back to them but still didn’t understand what the term meant.

As the Brits often told me, we speak the same language, but we don’t.

One example that stuck with me is “Bob’s Your Uncle.”  Within the UK it’s a common phrase that means “and there you go,” but like so many colloquialisms finding the root cause was a challenge.  It took me almost two years to find someone who could explain where the term originated.

Easy Peasey

Two hundred or so years ago there was a high ranking Member of Parliament (Robert, Lord Salisbury) who held great sway (political influence) across the British Empire.  This was a powerful man who also believed in nepotism, and so it was not unusual for even his distant relations to find themselves in favored government positions.

Such office holders with familial connections held positions of power, influence and easy living.  Over time the phrase was born, that everything would be fine (easy peasey) as long as “Bob’s your uncle.”

And That Applies How?

Which got me to thinking about a message I had received a few weeks ago from a recent graduate who wanted to make a career in HR and specifically compensation.  The inexperienced questioner asked a very basic question; a question often asked by those just starting their careers.  “How can I achieve success in my chosen profession?”   He wondered whether there was a blueprint, a map, or a guide of sorts to keep him on the straight and narrow.

Of course there are no rules, no instruction manuals or pointed arrows guaranteed to show the way to career success.  The experiences of those who went before you are varied and distinct in so many ways, usually a compilation of diverse career choices, working for particular supervisors who influenced for good or ill, differing type and operating style of employers, and of course the series of unanticipated head knocks (lessons learned from mistakes made) that one gains over the length of a career.

What happened to me may not happen to you, I thought.

So I condensed my experiences, preferences, personal work philosophy  and gut instincts into a set of generic principles that could (or should) provide a solid platform of suggestions for anyone interested in career success, whatever the chosen profession.

Below is the essence of what I sent to that recent graduate, reflecting my thoughts for how a compensation practitioner can be a success.  It’s not a complete list, the specific applications can sway in the wind along with the reality of personal circumstances, and the concepts broad enough for individual interpretation.

• Understand your company:  You need to know at least the basics of the business operations where you work.  What are your products / services and what advantages do they offer a customer?   Don’t remain stuck in your office / cubicle, but get out there and learn about the business.

• Understand the facts:  What is the business environment your organization operates in, and how competitive is your reward program?  What story do the metrics of your organization tell you?   What issues do you face with payroll, turnover, morale, engagement, etc?  Sadly, all too many practitioners start and stop here.

• Understand your management: Who are these people and what are their management biases?  Learn the perspective that they bring to making HR and compensation decisions. Know them and get them to know you.

• Understand your goals: If you don’t know the pathway you’re on, then any road will do. So learn what defines success at your organization and strive to support efforts in that direction.  Make sure you have goals that are integrated with the larger picture.

• Mix, stir and bake at 350 degrees until done!  Take all of the knowledge gained from the above, combine it with your own skill sets and experience, then work diligently at making a difference,  every day.

And there you are!  Follow these suggestions in your chosen career and everything will be fine.

Bob’s your uncle.

It’s not unusual in the recruiting process for a candidate to balk at the company’s initial salary offer. Sometimes in their pushback they might say that, having conducted a bit of “research” they feel that their personal value, or perhaps the company’s job pricing, should be greater than what’s on the table.

How should a Manager respond?

Before the advent of the internet companies were seldom challenged over how they priced their jobs. The value of a candidate’s background and experience might be negotiated, and often was, but not the internal value of the position itself. These days the wealth of information now available online offers interested parties an opportunity to attempt their own investigation, to analyze what a company’s job is supposedly worth in the real world.

What do you say when a candidate tells you that your $70,000 job should be priced at $80,000?

What a Manager Should Know

If you haven’t been hit with this scenario yet, consider yourself lucky. But it will happen. The challenge could even come from an existing employee, one who feels that they’re being undervalued for their responsibilities.

So how good is that “research” you’ve been told about? Can you take it to the bank, or should it go to the trash pile instead? First of all, the online data sources most often quoted are frequently criticized as unreliable, inaccurate and are seldom used by compensation professionals to base their program recommendations. These sources often use data provided by the employees themselves, and may lack adequate filters to assure proper job matches. Data collection techniques are often challenged by compensation practitioners.

Some sources can be self-serving, especially those sponsored by firms tied to the staffing industry. Reporting higher salaries would benefit them in the form of higher fees.

These sources are also convenient and inexpensive, increasing their popularity. But quality costs; you get what you pay for. Here you get straight arithmetic, plain and simple. The data cannot know the internal importance of a specific job within an organization. It cannot interpret, cannot assign subjective values the way company decision-makers do when assigning a grade among peers, among like valued jobs. Thus it’s easy to miss the mark by not understanding the company’s job in terms of true market comparators.

So How Should the Manager Respond?

When you’re exposed to this personal research tactic, step with care. Your willingness to debate the issue hands at least a partial victory to the challenger, who will no doubt boast far and wide about their successful “strategy.” So if you engage, be prepared for more of this as word spreads. Avoid playing defense.

You might consider other possible reactions.

• I didn’t hear you: As suggested above, ignore the gambit, refusing to engage in speculation, as discussing the matter gives a degree of credence to the challenger’s viewpoint. Simply state your confidence that the job has been properly priced – then drop it.

• The pushback: You could ask, what are their professional credentials for such research, as your company uses compensation professionals to keep pay levels abreast of the market.

• Pushback II: You could challenge the “research”, but that gives more credence to the point being made. Likely you won’t win the argument, as whatever you say would be viewed with skepticism.

• I’ll pass: You could skirt the issue and refer to HR, saying that you’ll “have them take a look.” This fools no one, but it does provide the opportunity to move the conversation in a different direction. Note: this will not work with an external candidate trying to negotiate.

Your reality is that the company has already determined the value of the subject job, and will not welcome outside second opinions. The job has a grade, a salary range and a midpoint – none of which will be changed because someone claims to have done a better job of “researching” how it should be valued.

I’d recommend the “I didn’t hear you” response, and be firm.

Btw, when managers and executives have asked me which sources should they use to research the market value of the job they’re interviewing for, I tell them, “Don’t do it.”

Do they really think that the company is going to listen?

The pending start of a new business year brings with it both the end and the beginning of the company’s annual management incentive plan cycle. While the left hand is busy processing performance assessments and award payouts the right hand is getting ready to launch the new cycle. In many companies this fresh start becomes an automatic activity, an administrative process not given much thought past doing what they did last year, and even the year before.

Here We Go Again

Perhaps instead of a rubber stamp now might be a good time to review the design, communication, administration and payment history of your annual management incentive plan and consider breathing some new life into it. Because if left on autopilot too long it’s surprising how many extra names get added to the incentive-eligible rolls, adding significant cost without proper review.

Eventually senior management will notice the ballooning costs and clamp down, either by reducing eligibility in a broad-based fashion, and /or by reducing incentive payment opportunities. You don’t want to get to this point.

Has your company made too many people eligible for the incentive program? Take a quick look at a 3-year growth curve of positions / employees being included. Would you consider them all deserving? Is someone making that call, or does title or grade designation become the sole deciding factor? Can you explain the ROI for the growing total in management incentive pay?

Employees deemed eligible for an incentive should have a line of sight between their performance against measureable objectives and corresponding incentive payments. If they don’t, what are you rewarding? Your plan shouldn’t be a profit-sharing scheme, where eligible employees light a candle in the window and hope that the company does well.

Companies typically use the “manager” title as an eligibility cutoff, but perhaps what you name a position shouldn’t be the sole criteria. There are those whose responsibilities include managing people, versus other individual contributors who manage a budget, or a non-staffed function, or a specific responsibility.

Using a grade designation can have its own problems; is everyone in a grade automatically eligible, and if not how do you differentiate between positions, when the company has already deemed all of similar (graded) value? Slippery slope here.

If you’re suffering from title inflation and have granted puffed-up titles for certain employees, are your Managers actually managing at all, or are they only supervising or are only technical experts with a bigger title?

Have a care that your pay-for-performance management incentive program doesn’t evolve into an entitlement program.

It’s Time; Where’s My Payment?

Something else to look at is whether the incentive award is actually at risk. How many of your eligible employees don’t receive an award each cycle? If practically everyone receives an award, perhaps instead of an incentive plan what you have is a delayed compensation plan; managers put in their twelve months and then expect a bonus payment. I have clients in Europe where at least a portion of a manager’s annual incentive is guaranteed.

Does your incentive program require behavior above and beyond, with individual objectives linked to broader company goals? Or are your objectives created at the end of the cycle, simply to comply with some HR assessment form that they must complete?

At the lower limits of eligibility companies may offer a 5% incentive target. However, that low a reward opportunity isn’t a carrot at all. You won’t change behavior, never mind get anyone’s attention, so why bother? If behavior isn’t going to change, if you’ll get the same performance as before, but now for an additional cost, what’s your investment return?

Now is the time to review the effectiveness of your annual management incentive plan and suggest improvements to increase effectiveness and provide more “pay for performance.” Once the current payment processing cycle is complete the pressure will be on to roll-out the 2016 program. At that point the die will be cast for another year.

It will be too late. Your EASY button will have become your $ THROWAWAY button.

Have you ever been asked this question at work? Or perhaps looked at yourself in the mirror one morning and asked yourself? My belief is that we don’t consider this question enough, for ourselves and for the employees who work for us. We dance all around it.

In either case above the usual knee-jerk response most of us come up with tends to focus on job performance, on personal competencies and even on having shown a demonstrated loyalty to the organization by sticking around for years. But is that missing the critical point of the question, your value to others, and by missing that point you can mislead yourself – like a slick politician who talks a good game but fails to address core issues.

The Real Question

Shouldn’t a more considered response relate closely to what the organization itself considers as to what your value should be, and less about how busy you’ve been, how knowledgeable you are in your field or even your impressive length of service? You could be a paper pushing administrator occupying the same chair for years and still give yourself a high personal score. “I’m doing a great job.”

So chances are that many of us may not be honest with ourselves, and validating that sidestep are many performance appraisal processes that seem to gloss over the value question without zeroing in. Their “What have you done?” query often doesn’t relate close enough to those actions, behaviors and achievements that should have been done to advance business interests.

Yes, you have a job to do, and perhaps even a job description that lays out your duties and responsibilities. If you perform as to what the description lays out, is that enough? Is that adding value or is that treading water? Just doing enough. It can go either way, but even the rare job descriptions that are accurate and up-to-date can be very inward focused – not considering the bigger picture of how a job performance relates to and can advance the department, never mind the business.

Or hold things back.

And what about those employees who report to you? Would you be satisfied if one of them told you, “I’m doing what the job description says. Isn’t that enough?” Here the unstated follow-up thought is likely, “I’m getting by.”

What Defines “Value”?

Your organization, whether you consider the entire business or even the smallest department, has likely laid out a series of objectives for the year. There are goals, there are definitions of success and very likely defined pathways toward the end zone. With that thought in mind it’s easy to see that an employee adds value when, in the course of performing their job they assist the organization / department in achieving those goals – helping in even a small way to score the financial touchdown.

In that light, consider that your activity list – you know, the one that ticks off all the accomplishments you’ve achieved over the course of the year – may actually be aimed in the wrong direction. Being busy can be viewed as the same as walking on a treadmill. You can build up a sweat but you won’t be getting anywhere.

So how much value are you adding?

Do You Have What It Takes?

Let’s go back to the mirror with a revised question. What are you doing to help your organization / department achieve its goals? Are you playing a leadership role, a supportive role, an individual contributor role or has your train gone off the tracks and down some rabbit hole into clock watching and “just doing the job?”

Leadership would view adding value as being personified by the employee who not only does their job but does it in way that keeps organization objectives in mind. That employee doesn’t waste time or resources, understands how their role impacts the business and is engaged in helping the business succeed. Examples are many when one seeks to do their job in a way that helps the greater good.

Is that you? Do you have what it takes to truly add value to your employer? Is that what your mirror says?

Because the “I’m following my job description” attitude is a short sighted response that helps neither your career or your organization.

The other day I was trimming the landscape of several plants that had outgrown their space when my wife asked me, “Why are you cutting down that plant?  It looks nice and the blossoms have a sweet scent.  Can’t we keep it?”

It was a ginger plant, and yes it was pretty and did smell nice – but it had also over grown its designated space.  Slowly spreading outward it was crowding other plants and transforming our neatly designed landscape into a jungle.   The plant no longer provided the value we had desired when first planted.  It was time to cut back or cut out.

Which got me thinking; how hard is it for managers to decide when it’s time to go?  Sometimes employees stay too long at a job, year after year racking up ever higher pay while not delivering more performance than they did the previous year.

Reliable workers?  Good workers?  Yes.  Expensive?  Yes to that, too.  Is their value increasing?  Not really.

Eventually you’ll realize that, while reliable Bob is doing a fine job, someone else can do that same job for a lot less money.  So what do you do?

Let it slide?

Think about it.  If a loaf of bread is commonly priced at $2.00, why would you pay $3.00 for the same product, the same taste, the same benefit?  Or even $2.50? Would this extra money be well spent?  Or would you start scanning the store shelves for something more reasonable?

Creating the Problem

How does one get into this fix, having satisfactory but overpriced employees on the staff?  Why do these employees seem stuck in place?

Often times the answer is simple and straightforward; because they’re comfortable, to the point where they see no reason to rock the boat.

• They like it here; they like the job, their co-workers, the work environment.

• They know everything about the job(s), as well as the company, and so the stress level is reduced and they feel able to apply less effort on the job

• They’re comfortable doing what they do, and have little motivation to do more.  They’re not driven to break out of their mold.  They don’t see themselves as being in a rut.

• The pay is good, or at least ok, so why leave and start fresh somewhere else?  Where they would have to prove themselves all over again.  Job search is a real bother, stressful too, and should be avoided until absolutely necessary.

So now we see why some employees stick around, content to remain on that treadmill.  But why do their managers allow this problem to develop in the first place?

It’s a Management Issue

Why don’t managers cut off these employees?  Or promote them up and out?  Because many times taking such actions is not perceived as being in the best interest of the manager.

• The cost and headache of replacement; the time, disruption, the added stress

• More work would be created for the manager, filling in for planned projects; their time lines would be negatively impacted

• The perceived damage to the manager’s reputation (employees have left), and leadership is watching

Then what’s a manager to do?  Corrective action is usually more wishful talk than action.  Moving someone along when there isn’t a performance problem is a tough decision to implement.  Though sometimes it’s the right thing to do, both for the company and the employee.

• Encourage employees to learn and grow within the company – preparing themselves for better positions

• Be open to losing an employee to another department that’s better able to utilize their capabilities.

• Expect and demand continued and improved contributions from all your employees

• Plan to move them up or move them out as part of managing an evolving staff

Ask yourself, where is the balance of contribution provided (performance) versus value paid out (compensation)?  When the balance tips too far in either direction, it’s time for action.  When an employee recognizes that there is more contribution on their part than value received, they look for the exit.  However, when the employer sees that there is more value provided than performance contribution, it’s time to move such employees along.

I’m just saying, the day will come – for some.  When it does, will you recognize that it’s time to pull the plug?

I was asked the other day to market price several positions in Nairobi, Kenya, and Chao, Chile. The client was seeking to open field operations sites and wanted to get a sense of the marketplace in which they would be seeking to hire talent. So the project was to ascertain the local competitive marketplace for their positions. What is everyone else paying?

However, in the world of compensation survey sources and available pay data Kenya and Chile are not exactly major players. In fact, one might be hard pressed to uncover reliable information from which to gauge anything remotely like a “marketplace.”

What’s The Problem?

This is what I explained to the client.

• Commercial surveys are scant: When you’re dealing with either a small country, or a third world nation or somewhere you can’t find without a map chances are good that readily available survey sources will not be available. That’s a research dead end.

• National data is the only show in town: When data is available, in any form, it’s usually only for the national average. You can essentially forget about industry slices, or revenue size. What you’ll get is national data and have to make the most with it.

• Your “special” jobs are missing: Limited data will condense around benchmark jobs, in an effort to gather up as much information as possible. So unique, industry-specific or even extra career ladder jobs may not be represented.

• Algorithms anyone? Sometimes the anecdotal data that you’ll come across won’t be based on incumbent data, but projections and formulae. So if job “A” pays “X” and jobs “B” pays “Y”, then we project (guess, really) that job “C” must pay “Z.” Do you want to fall on your sword defending that rationale?

• Look behind the curtain: Some sources will offer, at a hefty price, what appears to be a thorough per-job analysis that essentially fills out a detailed template form with all sorts of data on the country, including 25th, median and 75th percentile data for a job that you couldn’t have found elsewhere. The appearance of precision and thoroughness may be masking a simple algorithm coupled with generic data taken from the internet. Did I mention the big price?

This is bad news, I’m thinking, so how can I help the client anyway? They still need something from which to base their compensation strategies for these remote locations.

What Are You Gonna Do?

Presuming that the client’s budget is limited, taking the route of custom surveys or high priced per-job analysis is not likely a solution. Nor is spending thousands of dollars for a single country survey (if available) from one of the major commercial survey houses. Even with that expense the reality of scant data, even when prettied up and blended with reams of extra information, is going to be of limited use. Presuming that the client wants more than a number, but a “good” number.

A few practical suggestions:

• Compensation data can be found, usually through the internet, though it is often self-reported and / or government supplied. So try to gain multiple sources to see if a trend emerges. Avoid relying on a single source.

• When commercial surveys fail you, or your budget won’t allow it, look for local staffing sources (i.e. Robert Half, Roberts Walters, etc.) for generic job matches.

• Regional data might be available (i.e., Employers Federation of Europe, Gulf Business Survey [Middle East], etc.), with country-specific breakdowns.

• Take what national data you have and presume that such figures are 5% to 10% higher than secondary locations in the country and 5% to 10% lower than what might be expected in the capital city.

• If the data needs to be aged forward (likely) use country inflation rates to estimate pay growth. A common practice is to the discount the annual inflation rate by ~.5% to 1%.

At this point it is critical that the client is made to understand how this anecdotal information from secondary sources is not a smoking gun, but only a price guide to aid their thinking. Because when more reliable data is simply not available all that you’ll be able to provide is a rough guide. From there you can advise how they can use such limited information to develop a useful and practical local strategy.