It’s that time again.  The end of the business year, when managers everywhere turn their thoughts to – bonuses!  The calculators are out and every eligible soul from Marketing to Manufacturing to Sales, IT, HR and the Executive Suite tries to figure out how fat that check will be.  For many, it’s the gift receiving season.

Thus the same bad script repeats itself for the annual management bonus process, year upon year upon year:  objectives created at the last minute, embellished accomplishments sloppily recorded, problems and shortcomings diminished or forgotten and assessment forms viewed with disdain – as in, how do I fill out this thing to pump up my results?

More than the mechanics are at fault

The process is flawed, yet the foxes are in charge of the chicken coup – and they offer little hope for reform.  Why?  For those in charge the process works, and self-interest pays its own rewards.  Picture Santa Claus with a large bag of goodies.

Cynical?  You bet.  For many of us in the trenches true pay for performance is an elusive concept best remembered from Compensation 101 textbooks, suitable only for life as it should be, not as it is.  Sad to say, but senior management is often the worst offender.  I’ve seen senior executives manipulate, excuse me, adjust financial results to ensure that their own bonus awards wouldn’t be reduced.  Senior staff always deserve competitive bonus awards, don’t they?  How can you not reward your senior leadership for their efforts?  Once again entitlement trumps performance.

While studies suggest that the I-deserve-it mentality has weakened through the recession years  I’m convinced that it’s still alive and well wherever rewards are viewed as payment due for time served, not for effort and results.

But we go on hoping, trying to persuade leadership that it’s primarily good performance that should provide rewards; that tenure isn’t a compensable factor, that incentive payments should be deserved, not simply an automatic gift of delayed compensation.  Lower level employees are expected to earn their rewards; shouldn’t the same case be made for management?

End of year expectation

Have you ever told an executive that their annual bonus might be reduced because of either corporate or – dare I suggest individual performance didn’t meet expectations?  They would look aghast at the possibility.

But will the situation be any different for the bonus cycle in 2014?  I hope so, but bucking the trend of human nature is far from a sure bet.

To change those dynamics, as well as the effectiveness of your incentive plans you need to stand up and speak up.  The process is starting now, so it’s not too late to have an impact, to instill a management pay-for-performance philosophy in your company – even if it’s only one step at a time.

• Performance appraisal shouldn’t be an activity list (I was very busy), but a focused statement of achievement against quantifiable and measurable objectives.

• Let the assessment tell you the rating, not the other way around (“how do I fill out this form to give a 4 rating?”).

• Confirm that the language on the assessment form corresponds to the performance rating.  Oh yes, you have to check.

• Assessment forms should be required before an incentive payment is made – negating an old procrastination trick (“oh, just process the check.  I’ll get the form to you . . . tomorrow or the next day“).

• For the new cycle, start by having objectives established early in the year, not in an after-the-fact crunch at the end.

Granted, you’ll need more than a steely look and a waving flashlight to stop a speeding freight train, so you should educate management about these ineffective and wasteful practices before the cycle starts.  Because afterward may be too late; discipline as a learning tool is best used to prevent problems, not when Santa is already reaching into his bag of checks.

It’s Christmas, the season of light, cheer and new beginnings, so let’s be optimistic.  Prove me wrong and get it right.  Or at least start.

During the course of the year I’m periodically approached by colleagues, clients, casual acquaintances and even those who are strangers, who ask about my compensation writing; why I do what I do, what’s the inspiration for my subject matter (my muse) and whether I have a “message” for the compensation and Human Resource practitioners out there who form my target audience.

And the best question of all is, “how do you get people to read what you write“?

Well, with the year winding down and me feeling a bit reflective on my lengthy career I’ve decided to answer those questions – or at least try to, as I look in the mirror to see what it shows.

Why do I write?

This is an easy one. It’s because I have something to say, and God has given me a modest ability to connect sentences into coherent thoughts that tell an engaging story. That make a point worth making. But there’s more, of course. While I was stepping on all kinds on nasty stuff in the minefield I called a career, I had no one to rely on for practical advice. No one sitting on my shoulder to whisper good thoughts. Most of the self-help books, recordings and even conference speakers I experienced seemed to drone on over conceptual blue-sky ideas and (for me) unrealistic initiatives. Stuff that I knew the boss would have nothing to do with. Ideas that I wouldn’t be allowed to convert into actions, or even plans for action.

“Listen today, ignore tomorrow” became a sort of catch-phrase, as the reality of the workplace seemed very distant from the often idealistic preaching of the self-helpers.

So, call it a form of giving back on my part, or of simply sharing the benefits of my experience, but I believe that there’s a lot that can be learned from someone who has walked the path ahead of you. The intent through my ramblings is to help the practitioner with down-to-earth counseling and practical suggestions in practical language, with an added flair for understanding what the reader is facing in their own workplace.

Am I always right? Probably not, considering the wide audience I’m talking to. But the “right” wine isn’t right for everyone, is it?

Oh, and for me the writing is fun too.

What’s my inspiration?

People ask, where do you get your ideas on what you want to write about?

I start with mistakes. I’ve made them, and hopefully have learned from the resulting bruises and headaches. Over the years my bosses and leadership cadre have made mistakes; some learned a valuable lesson over time, while others repeated their judgment errors ad infinitum. And then most recently the experiences of my consulting clients, both domestic and international have suggested topics where offering a few suggestions might improve the day-to-day lives of compensation practitioners. All have served up a cornucopia of story lines.

Most times it’s the use of flawed policies, procedures and every day practices that encourage me to say, “wait a minute. Maybe there’s a better way.”

So there’s no end of possible topics. Ideas come to me in the shower, while driving the car, or writing this article and of course, while living my profession.

Why do people read what I write?

This last question is the hardest of all, as perhaps I’m not the one to ask. Why are you reading this right now? would be my counter question. I’ve been told many times that (for some) my writing is enjoyable, informative, thought provoking and down-to-earth.

That’s not to say that everyone agrees with me, certainly not, but if what I have to says gets the reader thinking, that’s all to the good.

I like to think that I write for the practitioner out there, not the theorist or conceptualist. I have something to say to those with dirt under their fingernails, who live in the trenches every day, struggling to do the best they can. I write to help with practical advice, something you can start or stop doing right now.

People have contacted me to say that my thoughts have made a difference, that it was good advice that they could implement right away. The best compliment of all.

So that’s my epitaph; I write to help. That seems to be recognized and appreciated.

——————

Caveat: No matter the length and breadth of my compensation experience I am neither all-seeing nor all-knowing. I am but a product of my training and experiences, and those experiences likely differ to some extent from many of you out there. Different industries, different companies, different bosses and different working environments, when blended together offer different perspectives to similar challenges.

Which is why I don’t present myself as the “answer man,” but rather as someone who has seen a lot, and done a lot, and experienced a host of different scenarios. So I “suggest” what you might find behind Door # 1 and Door # 2 when you have a decision to make, but rarely would I say that “this is the way it has to be.” Because it doesn’t have to be, and it’s your decision to make, not mine.

I just want to make sure that your eyes are open.

And maybe suggest a better way in the process.

Have you heard of Pontius Pilate?  Two thousand years ago he was the Roman governor in Jerusalem who handed Jesus Christ over for crucifixion.  It was said that in frustration with the local elders Pilate literally washed his hands of the prisoner dispute, telling Christ’s accusers that it was their problem, not his.

His action, or inaction in terms of judgment generated a common phrase that has stuck with me over the course of my career, “pulling a Pontius Pilate” – words usually accompanied by a gesture of washing the hands.  It’s like saying, “I’m done with this.”

Fast forward to modern times and I still see that gesture used today, if not always the phrase, by managers who want to get something behind them.  They “wash their hands” of whatever it is that’s bothering them and walk away.  Or they want to.

The urge to walk away

In Human Resources, when introducing a new program, policy / procedure or simply a new initiative of some sort, there can be a tendency to roll it out with a fanfare and then simply walk away.  Done and dusted, as the Brits would say.  Our work is complete.  Let’s go to lunch.

“Hey, I sent out the memo.”

Oftentimes they feel this way because they don’t wish to become bogged down with lingering administrative issues.  That’s not nearly as exciting as the development work.  They don’t see themselves as being responsible past the launch, of having to get their hands messy with questions and squabbles and unintended consequences.   Ewwww!   They also would prefer not to play the role of cop or gatekeeper to ensure that initiatives are properly communicated, implemented and given the time to take root.

“It’s not our job to be the police.”  That’s for somebody else.

But who exactly is that somebody else?  Those who may not understand the new initiative?  Those who prefer the status quo in the first place? Or those who have their own agenda to advance, whether in support of or in contrast to the new HR initiative?

Walking away is running away

In actuality walking away after a launch is a sure fire method of causing failure.  You wouldn’t drop a plant into a hole and walk away, would you?  You wouldn’t set your child onto their new bicycle, give a push and then turn away, would you?  So why do you think that simply announcing a new HR initiative is the extent of your responsibilities?  Truth be told though, many out there start washing their hands immediately after the first memo.

But it doesn’t work that way.  It shouldn’t work that way.  Not if the intent is to successfully implement something.

You can’t simply introduce a new program with a few memos and a deck of slides and then walk away.  It takes time.  Time for those affected to absorb and understand the changes.  Time for questions to be raised, and possible adjustment to be made.  Time for mistakes to be made and corrected.  Time for managers and employees alike to become accustomed to the new way of doing things.

Time for what was new to become what is normal.

Finish the job

Human Resources needs to provide leadership during that time, remaining the focal point in the thick of things, leading the way.  Their role would be to nurture the introduction phase, smoothing out the road ahead, eliminating whatever bumps and ruts are discovered along the way.

It’s only by taking on that continuing responsibility, by seeing the implementation of what they’ve introduced through to a successful conclusion, can HR ensure that their new program, policy or procedure is carefully nurtured until it can stand alone.  Until it is the new normal.

Short of that is whistling in the wind, like lighting a candle in the window and hoping that things go well.

When HR walks away, when they wash their hands of something too soon, they’ve left their responsibility half complete.  And half complete is no one’s success story.

Do the job.  The whole job.

During the course of my career I’ve come across a number of compensation practitioners who seem to think that, at least for them, compensation management is similar to playing a game of horseshoes. That just coming close to target would get you points.  That while actually scoring a three-point “ringer” would be nice, just getting a one-point score for getting close is good enough.  They can “get by” on that.

My father used to call this, “good enough for government work.”

Do you know someone who thinks that way?  Perhaps at some level such a half-a-loaf attitude defines management thinking where you work.

I hope not.  Because it doesn’t help the practitioner or the organization.

Broadening your horizon

Consider this basic tenet of good compensation management or analysis: When considering compensation issues and challenges within your organization it’s vitally important that you take yourself beyond simply answering the question being asked.  Are we competitive?  Does our incentive plan work for the company as well as the employee?  Do we really pay for performance?  Each of these queries could be dismissed with a one word or simplistic response, but does that really help anyone?  Would that advance the knowledge / problem solution that’s at the core of the question?

Practitioners should be expected to have developed an awareness of the bigger picture that lurks behind the original question, and to understand how their responding analysis impacts the business. Put yourself in a position to anticipate the follow-up questions; what does this mean? what do we do now? could there be a ripple effect somewhere?

Your value to the organization, your worth as an employee and as a job holder has a high correlation to your ability to expand your analysis.  Take the blinders off and broaden your perspective.  Consider telling senior management through your response, “I know what concerns you, I understand the implications of this issue for the business, and I’ve considered a wider view of the situation / problem in developing my response.”

Does that sound like you?  It should.

Taking the extra step

In other instances, when researching for an “x” issue you notice a connected “y” factor that may be related, or could have a cause-and-effect impact – but do you say anything?  Do you look further into “y” to explore possibilities and practicalities?

If not, why not?  Because you weren’t asked?

If you had asked someone else to research the original question for you, what in turn would you expect them to do?  How thoughtful a response would you consider appropriate?  So don’t you think that your management would have the same expectations?  Call this, “opportunity lost.”

And what would happen if you didn’t look at that “y” issue – but instead kept your focus strictly on what was narrowly defined when they asked for “x” – and management later uncovered ramifications or unintended consequences, or worse?  Would you still have met their expectations, or perhaps instead you would find yourself criticized or even checked-off as a half-achiever?  It happens.

Are your feet up on the desk?

So I’m asking you, are you going through the motions of your job, treading water and watching the clock tick by, or are you pro-actively developing a career?  Perhaps you’re still waiting to make up your mind. In many quarters non action is considered a response.

And lest we forget, sometimes the boss doesn’t ask the right questions. Wouldn’t it be a plus for you if you could help clarify the issues or be a part of the process that found the answers – the solutions?  Perhaps employ even a bit of tactical strategy as well?  It’s all good for you, or can be.

Your job, or at least a part of it, is to make your boss look good.  And that means helping them succeed in meeting their objectives.  You can’t do that with your blinders on.

With the fall of the Autumn leaves the attention of most senior management personnel shifts to the upcoming changeover of the business year.   And that click of the fiscal year calendar is accompanied by the beginning of their new annual incentive plan cycle.  So while the left hand is busy processing performance assessments and award payouts as an end-of-year project the right hand is getting ready for the new cycle.

In many companies this fresh start is automatic, an administrative process not given much thought past doing what they did last year, and the year before.

Here’s a thought.  Instead of issuing another rubber stamp copy perhaps now might be a good time to review your annual management incentive plan and take the opportunity to breathe new life into it.   Because if left on autopilot too long it’s surprising how many extra names find themselves added to the incentive-eligible rolls, slowly adding up what can become significant costs, often 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.  Perhaps both.  You don’t want to get to that point.

The Sneak Attack On Your Payroll

Has your company made too many people eligible for the incentive program?  Take a quick look at a 3-year growth curve of positions and employees being included.   Would you consider all these deserving?  Is someone making that decision, or has title or grade designation become the deciding factor?  Meanwhile, can you explain the ROI for the growing cost of management incentive pay?

Employees deemed eligible for an incentive opportunity should have a line of sight between their performance against measureable objectives and award 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.  What about those whose responsibilities include managing people, versus individual contributors who manage a budget or a specific responsibility?  Sometimes they’re all called “Manager.”

Using a grade designation can have its own problems; is everyone in a grade eligible, and if not how do you differentiate between positions, when the company has already deemed each to be similarly valued?  Slippery slope here.

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

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

Where’s My Check, Please?

Something else to look at: is the incentive award 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 reward program; managers put in their twelve months and expect a bonus payment.

Does your incentive program require behavior above and beyond, with objectives linked to broader company goals?  Or are your objectives only finalized at the end of the cycle, simply to comply with some Human Resource assessment form?

At the lower limits of incentive eligibility some companies start with an incentive target of 5%.  However that low a reward opportunity isn’t a carrot for anyone.  For that small amount of reward you won’t change anyone’s behavior, never mind maintain their attention for 12 months, so why bother?   If behavior isn’t going to change, if you’ll receive the same performance as before, but now for an additional  5%+ cost increase, what’s your ROI?  In my view this money is wasted.

Now is the time that you should have a look-see at the effectiveness of your annual management incentive plan – and to suggest meaningful improvements.   Because once the current payment processing cycle is complete the pressure will be on to roll-out the 2015 program.  And at that point the die will be cast until the following year.

It’ll be too late.

It’s fairly common to find articles written by those who advocate increasing the eligibility of employee incentives, to push inclusion further down the organization’s hierarchy.  The argument is that all employees affect a company’s success, that every employee will chase the almighty dollar of variable pay, and that the opportunity for ever larger rewards will motivate them to do great things.  All of which would in turn deliver improved financial results for the company’s bottom line.

Maybe.

And maybe it’s not such a good idea after all.  Perhaps it’s a bit of a crap shoot as to whether higher compensation costs would deliver improved financial gains.  Let’s take a look at the challenges ahead when you consider a broader eligibility for your annual incentive program.

What’s The Plan?

What do you consider an incentive when designing a compensation program?  My view is that a variable reward should be paid out for performance that goes above and beyond the norm, beyond what’s expected.  Thus it shouldn’t be a reward for performance that would have occurred anyway.  The intent of an incentive is to prompt a change in behavior, to get employees to do something they wouldn’t ordinarily have done, and to get them to do it because they’ve been offered a financial reward.

That should be the plan.  Otherwise it’s a giveaway.

You’d expect that the “above and beyond” objectives would differ from year to year as the needs of the organization evolve and adapt to changing business conditions.  This emphasis on annualized objectives reinforces the intent that incentives should be designed to reward effort beyond what’s called for in the job description.  And they shouldn’t be repetitive, the same objectives year upon year.  That’s what the job description is for.

Incentive rewards shouldn’t be provided simply because an employee performs their job well.  That particular carrot should be the intent of the annual merit increase.  In fact, such an exercise would be considered “double-dipping,” paying for the same performance twice.  You shouldn’t be using an incentive as an inducement to get employees to perform their expected duties.  Again, that’s paying twice to reinforce the same behavior.  It’s also using compensation to replace the leader’s own responsibility to manage their staff.

Is There A Company Advantage?

When deciding on whether to add a variable pay opportunity to an existing base salary compensation model, you need to ask yourself, “what will the company receive in return for the increased costs of an incentive program?”  If you’re planning to increase targeted compensation costs by 5% or 10%, how will you answer the ROI question?

Caution:  Always provide a business (financial) rationale, and not subjective phraseology like “survey says” or “everyone else is doing it” or even “it’s the right thing to do.”  Management tends to frown over such weak rationalizations.

Employees lower in the hierarchy have a reduced line of sight between their actions and business success.  Which makes it harder to create meaningful, quantifiable objectives for performance  that integrate vertically with department, functional and / or organization objectives.  If you don’t integrate what you’re telling employees to do, you may find yourself paying out incentive rewards when the company as a whole hasn’t been successful.

So ask yourself to consider the business urgency in your organization for lowering variable pay eligibility to those below the management ranks.

• Is the employee line of sight (performance / business results) direct, or remote?  If remote, what are you paying for?

• Can you quantify the expected ROI?  The wrong answer here suggests a giveaway.

• Can you balance the increased compensation costs against assured financial gains for the company?

• Would the variable pay become strictly an added cost, or would any portion of base salary be at risk?  “No pain, no gain,” or “no risk – icing on the cake?”

If you have a reasonable doubt on any of the above points, I suggest you think long and hard before implementing such a program.  It would be very difficult to dig yourself out of that hole.

With the fall of the Autumn leaves the attention of most senior management personnel shifts to the upcoming changeover of the business year.   And that click of the fiscal year calendar is accompanied by the beginning of their new annual incentive plan cycle.  So while the left hand is busy processing performance assessments and award payouts as an end-of-year project the right hand is getting ready for the new cycle.

In many companies this fresh start is automatic, an administrative process not given much thought past doing what they did last year, and the year before.

Here’s a thought.  Instead of issuing another rubber stamp copy perhaps now might be a good time to review your annual management incentive plan and take the opportunity to breathe new life into it.   Because if left on autopilot too long it’s surprising how many extra names find themselves added to the incentive-eligible rolls, slowly adding up what can become significant costs, often 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.  Perhaps both.  You don’t want to get to that point.

The Sneak Attack On Your Payroll

Has your company made too many people eligible for the incentive program?  Take a quick look at a 3-year growth curve of positions and employees being included.   Would you consider all these deserving?  Is someone making that decision, or has title or grade designation become the deciding factor?  Meanwhile, can you explain the ROI for the growing cost of management incentive pay?

Employees deemed eligible for an incentive opportunity should have a line of sight between their performance against measureable objectives and award 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.  What about those whose responsibilities include managing people, versus individual contributors who manage a budget or a specific responsibility?  Sometimes they’re all called “Manager.”

Using a grade designation can have its own problems; is everyone in a grade eligible, and if not how do you differentiate between positions, when the company has already deemed each to be similarly valued?  Slippery slope here.

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

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

Where’s My Check, Please?

Something else to look at: is the incentive award 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 reward program; managers put in their twelve months and expect a bonus payment.

Does your incentive program require behavior above and beyond, with objectives linked to broader company goals?  Or are your objectives only finalized at the end of the cycle, simply to comply with some Human Resource assessment form?

At the lower limits of incentive eligibility some companies start with an incentive target of 5%.  However that low a reward opportunity isn’t a carrot for anyone.  For that small amount of reward you won’t change anyone’s behavior, never mind maintain their attention for 12 months, so why bother?   If behavior isn’t going to change, if you’ll receive the same performance as before, but now for an additional  5%+ cost increase, what’s your ROI?  In my view this money is wasted.

Now is the time that you should have a look-see at the effectiveness of your annual management incentive plan – and to suggest meaningful improvements.   Because once the current payment processing cycle is complete the pressure will be on to roll-out the 2015 program.  And at that point the die will be cast until the following year.

It’ll be too late.

In some circles the word “retention” has an identity problem.  Some would say that, if you don’t want someone to quit your organization, any extra money you give them as an inducement to stay can be considered “retention.”

When you don’t want a valued employee to leave your organization, one who might otherwise do so, what are you going to do?  You’re going to make it worth their while to stick around. You’re going to offer them more money.  I say offer, because you need to put a carrot on a stick – an inducement to get them to remain while it might be otherwise in their best interests to leave.

This concept is very broad, and if not applied carefully can be used to justify any manner of increases for any manner of employees.  It can become the opposite of what you intended when you designed your reward programs.  Wide discretion and rationale subjectivity could replace pay-for-performance, internal equity and the balanced foundation of your structured reward programs.

What a retention should not be, is an end around effort to give employees more money; a callous attempt to “beat the system” of annual pay increases – to find another way to give selected employees more money – outside the system.  The game is played by throwing down the fear card; talent will leave us.  We can’t have that.

So have a care.

And then there’s the retention bonus

When should you consider a bonus as a retention tool?

• You’re selling a business or a piece of your organization.  If the performance of the business falters during the sale process the value of that business could be negatively impacted, so you need people in place to maintain proper operations.

• When you’re closing down an operation and laying off the workforce.  Someone has to stick around to make sure that the operation remains as effective as possible for as long as possible, and then to turn off the lights.

Employees who manage an operation that’s been offered for sale are typically considered as part of that operation, so they’ll be leaving the parent organization.  In effect, they’re being let go with the rest of the for-sale operation.

If perchance these leadership employees might still be retained by the parent organization their efforts should be considered a project.  So you should consider a retention bonus when you’ll be losing the employee(s), not when it’s simply a project for them.  Projects can be a great objective for the annual management incentive plan.

You have to offer a large enough incentive that they’ll remain until the end. Too little and they could be lured away by a new employer’s offer.  You could phase in retention bonus payments, in stages, but always keep the largest piece until the end.

You could also tie payments to results; otherwise you might pay out monies for someone who is simply sitting there, working on their resume and playing computer games.

How much is enough?  Enough to get and keep their attention, so a hefty percentage of their annual base salary is a good place to start.  It would be money well spent, so I’d advise you consider up to 50% for the leaders, and ~25% for senior staff.

How many should be included in the program?  Keep it small, only those deemed critical to continued operations.

To be clear, any offer of a retention award would be forfeit should the employee leave prior to the agreed upon date, or if their performance is considered “poor.”  Note: you might have trouble in a failing or “for sale” business to determine gradients of performance.  But obvious failure to perform (against your pre-established objectives) should have a penalty.

Retention as a concept can be a slippery slope, so be careful where and when you step.

“Used and abused like a junk yard dog“

 I’m a perverse fellow.  I like working in Compensation, and have intentionally made it my career focus.  Not many of my ilk will admit that.  Some use it as a stepping stone for higher positions within Human Resources, while others look at us with a sidelong glance, as if we’re “one of them.”

But I know what I’ve gotten myself into.  I know how practitioners like myself can be viewed by colleagues, employees and upper management.  It isn’t always pretty.

• We can be perceived as a “numbers-type,” bereft of charm and personality.  Picture the fellow with the pocket protector and ever-present calculator.

• We’re often not viewed as much of a business partner, as we’re too externally focused (what are others paying, what do surveys say).   A constant criticism is, “if only they understood the business.”

• Folks think of us as if we wore a badge.  We’re too much the gatekeeper or policeman (Hey there!  You can’t spend so much, you can’t rate employees like they’re relatives, you have to follow policy,  we don’t like exceptions, etc.)

• Our work is easy to criticize, whether it’s our view of the competitive marketplace, how much employees should receive next year, what grade our jobs should be in (what do they know?), or requiring managers to use those hated job description and performance review forms.

As a result,  I never did get many Christmas cards.

Alas, for those who are doing their job, which is managing or directing compensation, not simply administering it, these practitioners eventually start to feel like that old junk yard dog, beaten down, abused and definitely not considered as one of the “cool” folks.

Being challenged is routine

Think of the gauntlet faced by many when presenting the annual compensation proposal.  You can almost see the agitated twitches appear as recommendations are presented and the inevitable questions, skepticism and doubts pop out like mushrooms after a rain.

–  What surveys did you use?

– Those aren’t the figures we expected to see

– Are you sure about these numbers?

– Your recommendations cost too much.  Where can you cut?

– That’s not what everyone else is doing

– My brother-in-law heard  . . . (fill in the blanks)

– Can’t we just go with the cost of living and move on?

And the list goes on.

That’s the way it is.  Like I said, used and abused.

On the other hand, some compensation administrators (when it looks like a duck and acts like a duck it may still have a different title) will tend to present what is expected, what won’t cause trouble, and what will be easy to implement.  Call it “kicking the can down the road.”  It may not be in the company’s best interest, but it certainly is for the don’t-rock-the-boat administrator who wants to be liked and fit in.

So which one are you?

You don’t have to toss away your career when you stand up and tell senior management what they’re paying you for; and that is, your professional opinion and best judgment.  This is a time when your greatest value is to open their eyes with your thorough analysis, your understanding of problems and how to resolve them, and your sense of likely unintended consequences.

If you can’t stand the heat, get out of the fire.  You’re in the wrong job.  I’m suggesting that you stand up, you don’t give up, you don’t give in or let the challenges to your professionalism sweep you away.  Remember that administrators may be liked, but they’re less often respected.

In the course of my career I’ve been that junk yard dog.  But I made it.  And I gained a lot of professional respect from colleagues and senior management along the way.

So can you.  It’s your choice.

Btw, I still don’t get Christmas cards.  They all go to the generalists.

That’s what a manager is saying to their staff when they show a reluctance to distinguish between high performing employees and the “Joe Average” types when it comes to granting performance rewards.   These “leaders” make excuses to avoid tough pay increase decisions, instead manipulating the Pay-For-Performance system to ensure that, whenever possible everybody gets something.  If there isn’t enough money in the budget, well, there’s Human Resources to blame.

This is what happens when managers aren’t able, or aren’t willing to manage pay.

They want to be liked, and who can blame them?  We all want to have friends.  These managers have to control a team, have to consider the well-being of the entire staff, keep spirits high, and limit any grumbling in the ranks to a minimum.  They’d like to be appreciated by their employees for those efforts, while at the same time keeping their “people issues” to a minimum.  So in their view treating everyone the same, or as close to that as possible, would level the playing field – so they can boast, “we treat everyone the same.”  In other words, there aren’t any “special people” here – not even performance stars.  Such managers believe in a kind of broad-based reward redistribution; i.e., everyone deserves to get something.

And they hope to get Christmas cards from the staff at year-end.

Ah, the angst!

At the same time this type of manager is fearful as well.  They’re afraid of being criticized for making the wrong decisions – or for not making a decision at all.  Some become paralyzed by indecision into non-action.  Why is this?

• If any employee quits, that could be a mark against the manager; that they aren’t an effective manager.  Why else would someone quit?

• Such criticism could be doubled down if it’s a valued employee who has left.

• Some managers take to heart the adage, “people don’t quit companies, they quit managers.”  So they could take it personally when one of their employees decides to abandon the  team.

And then you have the angst over the replacement process.

The losing manager will have more work on their plate, having to cover for the missing employee, then having to take the time to recruit and ultimately provide training for the replacement.  How long will it take to get everything back to normal?  How long will their life be disrupted?

So it’s worth it, the logic goes, to keep everyone as happy as possible.  Because to a manager a departing employee is bad news all around – unless of course that person is in the bottom 5% that we want to leave.  But how many managers actually point a finger at an employee and say – you’re a 5%?

For such reluctant managers you’d need an employee’s taped confession to a federal crime committed on company property in order for them to feel justified in taking a hard line.

On the other hand, effective managers strive to be respected.  Being liked is nice, but shouldn’t be bartered or purchased at the expense of doing their jobs.  Which raises a question.

So what is a leader?

There are many answers to this question, but for our purposes let’s focus on the ability to make timely and thoughtful decisions for the good of the organization.  That’s why the employee with the “manager” title was promoted, wouldn’t you say?

It’s not a matter of making a decision in the purest sense, because bad decisions, even idiotic decisions would qualify.  One could also construe that a manager’s non-action, non decision is in fact a form of “decision.”  It’s taking decisive action in the face of challenge that sets the effective manager apart from the rest of the pack.

Is there a difference between a manager and a leader?  Both can have the same title, but their outlook on roles and responsibilities could be quite different.

A manager can be someone who simply administers an ongoing operation, keeping it running, maintaining processes and completing assigned work.  An important role to be sure, because we need Indians as well as Chiefs.  We need someone to be the mortar that holds the bricks of the business together.  But perhaps that’s more management than leadership.

For its part, leadership has coined the phrase, “follow me.”  These are the individuals who set the course, stand up for themselves and make the tough decisions.

So, yes, there’s a difference between someone acting as a manager vs. another who’s driving forward as a leader.

Which one are you?  Which one do you report to?