A client once asked me why a Senior Accountant (non-exempt) reported to an Accountant (exempt).  This same company used the title “Supervisor” to describe individual contributor positions and it wasn’t uncommon for Managers to report to Managers and Directors to report to Directors. 

Given that these situations occurred in a large and presumably sophisticated company, one might ask – what’s the big deal, and is anyone being harmed?  Advocates say that offering an employee a special title is a harmless and inexpensive reward, one that doesn’t increase employer costs. 

I don’t think so.

Source of the problem

·         Managers grant esoteric titles to those for whom they have limited means of reward.  “I can’t give you the increase you deserve, so let’s change your title to xxxxx.”  Like greasing a squeaky wheel for a short term fix they want to do something to keep the employee quiet.

·         Employees are given titles where none should exist, like the Secretary / Administrative Assistant promoted to Office Manager, while still performing the same job.

·         A “special” title is used because the position is considered so different from other jobs that it needs to be specifically identified.  Unique titles can also be seen as reflecting on the importance of the managers themselves.

A bitter harvest

Let ‘s look ahead at what you can expect from planting these problem “seeds.”

·         Role clarity (job duties, business impact, decision-making, etc.) becomes blurred.  This in turn generates confusion as the company creates Senior Managers and Group or Area Directors and other in-between titles to differentiate the “real” jobs from inflated titles.

·         When reviewing market competitiveness the less accurate the title is in relation to the work performed, the more likely your analysis will be skewed.  Benchmarking unique, employee-specific and inflated titles hampers an accurate assessment of your competitiveness. 

·         Those with inflated titles will expect the perks or privileges that accompany the title, and their absence could cause difficulties.  It’s an awkward conversation when you tell an employee that the import of their new level in the organization is “title only.”

·         Inflated titles can be a detriment to incumbents as well, such as the “Director” who now only qualifies for a “Manager” title with a prospective employer.  Opportunities outside your company are limited because potential employers would be reluctant to hire someone where the new title is lateral or even backward to that currently held. 

·         The natural extension of inflated titles is inflated grades / salary ranges, as the bogus “senior” position would be placed in a higher grade than the “intermediate” position.  This practice increases your fixed costs without a corresponding rise in either capability or performance.

·         Employees don’t like giving up inappropriate titles.  Thus employee relations  issues will likely develop as you try to correct past practices.  You may have to develop creative “buy out” or “grandfather” scenarios.

What to do

If you do find yourself in a situation with inflated and confusing job titles, what steps can improve your lot? 

1.       Organize a cleaning exercise; start with the low hanging fruit and eliminate all unoccupied titles.

2.       Accompany that initiative by implementing tighter authorization procedures before a new title is created.  This would cut off the flow of new problems even as you address the core issue – incumbents.

3.       Fewer job descriptions would be needed if wording was more generalized.  Standardized titles would clear away much of the role responsibility confusion.

The general nature of clerical duties (filing, record keeping, secretarial, forms processing, etc.) lends itself to standardization – which in turn makes it easier to transfer employees without having to “promote” someone when their title changes. 

Remember though, that  title standardization makes more sense in a conference room than it does during an employee discussion.  A “Senior Depository Research Clerk” sounds more important than a “Clerk III” or even “Senior Clerk.”

Fewer titles provide greater role clarity, improved accuracy in assessing pay competitiveness, more control of labor costs and higher morale as employees know where they stand and what they must do to succeed in your organization.

A final caution: be careful of setting up titles without occupants “in case we want to promote someone down the road.”  Guess what?  You will.

To answer this question most companies would say that, yes – they have a pay-for-performance (PFP) program.  Such a statement is chic, politically correct and offers a positive message about how the company values its employees.  What’s to argue with?  Paying employees on the basis of what they have contributed to the company makes sense, does it not?  If they give more they receive more.

On the other hand, to answer that question in the negative is to suggest that you are not being fair to your employees, that your idea of a proper reward is to bypass individual performance in favor of treating everyone the same, regardless of contribution.  However, as that acknowledgement would paint you as an employer who is insensitive to variations of employee effort and achievement, it’s more likely that you’ll fall in line and say “yes, of course we pay our employees for their performance.”

But do they?  Do you?

There is an entrenched viewpoint by many in management that the granting of variable pay increases automatically means that their company provides pay for performance.  However, if as is usually the case practically everyone receives some form of pay increase (90%+), is there really a meaningful distinction being made between high performers and those who merely occupied a chair for the past 12 months?  Isn’t such a practice (if we haven’t fired you, then you’ll get an increase) more like a modified attendance award?

If you’re serious about it, your decision to adopt an effective pay-for-performance strategy should include two critical elements:

• The decision not to pay if the employee hasn’t performed

• The decision to make it worthwhile for an employee to be a high performer

One of the common pay practices that continue to hamper the effectiveness of PFP plans for base salary increases is the misuse of the annual merit pay pool through inflated performance evaluations and automatic increases.   Continued use of this practice will increase your fixed costs, but in a manner that will not effectively reward employee performance or encourage extra effort.

Making PFP actually work for your company will require hard decisions from line managers who are otherwise accustomed to maintaining employee morale through the avoidance of objective performance reviews.  We have seen that, while there is a shift toward greater rewarding of individual effort, additional monies are not being provided as a result of that shift.  Merit spend budgets will not increase to accommodate “feel good” increases.  So in order to more effectively use available salary increase dollars companies need to reward their high performers with money effectively taken away from (not granted to) those performing at lower levels.  You can call this, “taking from Peter (average) to pay Paul (higher performer).”

This may also mean that many average performers, the bulwark of most companies, will receive less than they might otherwise have expected from past experience (which is at least an average raise).  What it comes down to is a company’s ability to afford proper rewards for their higher achieving employees (thus motivating and retaining them in the process) by reducing or eliminating rewards to those deemed as underperforming or going through the motions.

The risk exposure is that if managers, through the utilization of performance management programs, do not properly identify and restrict awards for less deserving employees, the PFP budget will not have enough funds to afford appropriate rewards for high performers.  So you should ask yourself, who is it you would rather disappoint?  Who has less impact on your business and whose loss would be less disruptive to your operations?

While published reports clearly indicate a trend away from one-size-fits-all reward systems, one should look below the surface to learn whether employee performance is being appropriately measured and rewarded.  That distinction is the true measure of PFP.

Getting serious

To effectively use a pay-for-performance system a company should:

• Educate employees as to what performance will be rewarded.  This requires measurements, and performance objectives that align vertically in the organization (employee goals relate to supervision, whose own goals relate to management, and on upward to corporate goals).

• Provide a well-defined rating scale that helps managers distinguish between levels of performance.  Be careful of the word, “average,” as many managers use that as a default rating.

• Provide a clear distinction of reward between those who have delivered and those who have not.  An employee who does not see a relative gain from working hard all year (2%+ differential) is less likely to repeat their performance the following year.  For an extra 1%, would you?

So the next time you are asked whether your company rewards employees for their performance, perhaps your answer might not differ, but now you recognize the distinction being made by your employees.   It’s up to you whether to be satisfied with your answer.

Does changing a light bulb make you an electrician?  Does replacing your car’s oil make you an auto mechanic?

No?  When it comes to Human Resources, though – sometimes the perception is different .

In a smallish company the role of Compensation is essentially one of market pricing.  Managers want to know how much a job is worth out there in the marketplace.  Nothing fancy, nothing complicated, just answer the question – how much?  Given the easy access to survey information some HR Managers tend to diminish the significance of compensation analysis with a shrug of the shoulders and a smug, “oh, we can do that.”

Piece of cake

To their view, market pricing is a simple process of matching a job description to a generic, boiled down paragraph from a survey source, then noting the highlighted figure that corresponds to that job.  How difficult is that? 

How bad can it get, they figure, to ask an HR generalist or even a department manager to flip the pages of a survey to find the “going rate”?  Are they going to be that far off?

Yes, they can.  Yes, they will.

Now I admit to having a bit of a bias, but consider this:

• Survey complexity has increased as customers demand ever greater degrees of “slice and dice” data analysis / market segmentation (industry, revenue,  geography, etc.).

• Surveys no longer provide just “the number,” but multiple figures to choose from.  Which is best for you?

• The HR Generalist already has a full time job, and not a lot of time to spend dabbling in the intricacies of market pricing.  They’re looking for the quick answer.  Does quick suit your needs?

• The periodic dabblers may also be affected by their own biases (they know the job holder) and a simplified grasp of the job under review (relying on title matches or abbreviated “descriptions”).

• What happens when a critical job isn’t well matched in the survey?  Do you check off “no match” and move on?  What if you really need the data?  Is your ad hoc analyst able to triangulate other jobs into a reasonable assumption of an appropriate market rate?

• When dealing with international jobs there are a host of limitations on data availability not commonly experienced in the US.  Market pricing overseas can become more of an art than a science.

What can go wrong

The inherent risk is in misreading relationships between jobs, where a wrong job match or an out-of-context figure could become the single domino that starts a chain of distortions.

If a mistake is made with a Systems Analyst, likely that error will be compounded when coming up with the Senior Systems Analyst figure.  And if you’ve historically considered a Financial Analyst similar in value to the Systems Analyst, you can easily peg the Financial Analyst to the wrong market rate.  And so the story goes, for as often as other jobs are considered of similar value. 

But perhaps the greatest challenge to the wannabe analyst is when they’re challenged by two commonly asked questions:

• Are you sure of these figures?  In other words, defend them as if they were your own creation.  What survey(s) did you use, who are the participants, did you properly match the job, let me see the data, etc.

• What do we do now?  Having the data is usually the tip of the problem, and like an iceberg there’s always a lot more underneath.  How do we take the knowledge of competitive market pricing and develop tactical strategies to move the organization from a problem zone to safer ground?

So have a care when flipping pages through a survey, searching for the right number.  The figures can mislead you, even as you don’t know what to do with what you have.

Sometimes you do need an electrician, because DIY won’t get you where you need to go.

Have you ever faced a situation where management ignored your advice?   Went left when you said go right?

Of course you have.  Likely it’s happened to you more than once.  The experience is a frustrating one, isn’t it?  And can be more than a little blow to the ego,  if you dwell on it.  After all, you’re the professional, the knowledge expert responsible for Compensation in your organization.  That’s what you’re being paid for.  To know what to do.  Not only should management  be listening to you, or so you think, they should be agreeing with you.

Wake up and smell the coffee

But this isn’t the classroom or a WorldatWork or SHRM certification seminar.  What all too often happens in the real world can be quite a bit different than what you see in the textbooks or hear from conference or webinar speakers.  Sometimes management takes your input, listens to your reasoning and proposals,  but then decides to move in a direction different from what you had recommended.  And they may not even explain why.

Every seasoned practitioner at some point needs to become accustomed to the realization that the recommendations they present to management, be they for large projects or part of day-to-day advice, aren’t always going to be accepted – and not necessarily because they’re bad ideas.  When management decides to go “rogue” on you it’s not necessarily a reflection of your capabilities or professionalism.   Or even mistakes that you might have made.  They simply have a different perspective than you.

In such circumstancesthe decision-makers usually have more angles to consider than only the compensation point of view.  Whether they be looking at business projections, the potential impact of share price, financial strength of the company or simply confidential plans going forward that you’re not privy to, they need to weigh your recommendations against what else they know that relates to the matter at hand.

After all, it’s their business, their budgets, their employees.  They can do what they want.  Hard as that may be for you to swallow.

What you have to be careful about is how much you want to push your viewpoint in the face of management reluctance, self-interest or just flat-out bias.  That may not be a career enhancing move.

Don’t have a thin skin about this

When leadership chooses a different path than the one you’ve recommended, that decision doesn’t diminish your role in the organization, or the degree to which your viewpoint is valued.  If you have done your job and made sure that the relevant information and decision points are on the table, and that your leadership therefore has their eyes open to the issues and ramifications, you can relax that you’ve done all that there was to do.  You can sleep well tonight.

Because your responsibility is to advise, to offer the best professional recommendations that your knowledge and experience has prepared you to offer.  Management is counting on you to provide this.  That is the measure of your importance.

Consider the police officer making an arrest.  Their job is to gather information (clues) and apprehend a suspect based on those clues.  But then someone else is responsible to prosecute that suspect, using the information gathered by the police.  Or they could decide not to prosecute.  It’s their decision.

But we’re still human, and it can rankle.  Often we’ll find that our ego is in full bloom once we make a recommendation – as if anyone who disagrees with us doesn’t respect us or value our opinion.  That they don’t love us anymore.

Get over it.  Shake it off.  Because they’ll be another issue tomorrow.  And you can be a hero then.

When it comes to paying employees for the work they perform, what do you think they expect?

__________________________

Or do many in management even care enough to ask this question anymore?  Perhaps the collective attitude these days is more typically either, 1) “they’re lucky to have a job,” 2) “where are they going to go“? or 3) my personal favorite, “I pay, you work.”

When employees feel mistreated or taken advantage of in the performance = reward equation you’ll see the result through lowered morale, mental disengagement, reduced productivity and even separations.   Given the business risks involved it’s discouraging that not enough of those in charge actually consider the issue of pay from the perspective of those doing the work – or don’t seem to care.  

Such an important issue should generate a better reaction than supposition and negative bias.

What’s the problem?

Any manager worth the title should be expected to anticipate employee issues, especially those that have the power to harm the business.  It’s about knowing your employees, about being prepared.

Because payroll is likely your largest single expense, representing 40% – 60% of revenue.  Shouldn’t how you handle pay be as carefully considered as the way you would view the cost of raw materials, the acquisition of a new business, or the financing of more brick and mortar?  You should look at this expense from every possible angle, to better understand the underlying causes and how you can do better.  To manage reward dollars without harming the business you need to understand those factors that impact employee pay, as well as the attitude of those being paid.

Taking that hard look will mean trying to understand the employee perspective – the human factor behind the cost of labor.  It will mean understanding how company pay decisions are perceived by those on the receiving end.

It can help when you think of pay from the other side of the desk.  Employees provide a service and you pay them for it.  But that shouldn’t be the end of the equation, as money doesn’t manage people – you do.

What do employees expect?

Do you know what employees expect from managers, and from the company?  Their basic wants and needs have a direct connection to their performance, and to their commitment to your organization.  Because you can pay someone and still not get much out of them.

While individual circumstances might vary somewhat, it’s reasonable to say that employee expectations fall into several broad categories:

·         Competitive pay:  No surprise here, because that’s probably what you want too.  You don’t need to be a premium payer, and should avoid the label of “law baller,” as you ensure that provided pay opportunities are consistent with market practice.

·         Opportunity to earn more: Employees should know that opportunities are available to them through pay increases, variable compensation, promotions and even overtime as appropriate.

·         Regular pay reviews: Don’t let employees hang in the wind; avoid the comical stereotype of employees concerned over how to ask the boss for a raise.  You don’t have to grant anything, but let employees know that you have regularly scheduled reviews of pay and performance. 

·         Timely and accurate payroll: Anything less than 100% performance is a problem, as perfection is demanded – especially by those living paycheck to paycheck.  Payroll providers will tell you that you never hear from the 99%, but only from those with problems.  And the calls always start with an accusation.  So get it right and keep it right.

·         Fair treatment: Employees have a distaste for “favored sons” or special treatment cases – especially if the perception is that such treatment isn’t deserved.   Recipients will become known, so don’t start putting skeletons in the closet.

Do you understand these expectations?  Do you consider them reasonable?  Are they the sort of expectations that you have yourself, for how you want to be treated? 

How you and other managers react to someone’s expectations, by either actions taken or by lack of attention (ignoring) will set the tone for your employees; you dismiss their concerns at your peril.  You don’t have to do anything, of course.  But your eyes should be open and your decisions based at least partly on knowledge of what your employees are thinking – and expecting.

Otherwise you’re making decisions in the dark, and how many gems of wisdom come from that process?

Think about whether your management treats employees as “we” vs. “them.”  Are employees viewed as boxes on an organization chart or as real people?  Are they considered an important asset to the business, or a cost item to be managed (dealt with)?  Whatever the answer, your attitudes will become known and discussed among the staff.

Take the time to understand where your employees are coming from.  That bit of research will provide dividends down the road – no matter how you choose to pay your people.

That got your attention, didn’t it?  Quite a teaser title, grabbing your attention and compelling you to at least read the opening paragraph.  And that of course is the reason that blog authors use and over-use this tactic.  It’s a hook that dangles a quick fix answer in front of your nose.  You can lose weight, increase sales, get a new job, manage your boss and cure cancer – all by condensing the apparent solution down to a few simple steps.

Who can resist the lure?

In our own field of Compensation this basic check mark tactic is in full bloom, with repeated examples diluting the complexity of every problem and offering simplistic solutions that in all truthfulness should be obvious answers to most.  How often are those quick steps actually little more than common sense, and have you the reader muttering, “Of course“?  And there perhaps lies the rub.  What you gain from these “steps” is often less gems of wisdom than a condensed rehash of what you already know, only now formatted with a seductive lure.

By comparison, most workplace problems have more moving parts, more complexities and more risks associated with wrong moves than would be suggested by a short “just follow these steps” inducement.  I don’t have an EASY button where I work.  Do you?

But real-answer articles are more complex to write, require more words to explain themselves and may suffer lack of attention from a “don’t have the time” audience.

Then again, perhaps a bit of silver lining can be for those using the list of steps as check marks for their own activities, sort of as a reminder to buy the milk, take out the garbage, feed the cat, etc.  Not rocket science, but a convenient to-do list reminder.  Whenever you’re undertaking a major project, having a project plan that includes a list of necessary activities could be a useful tactic to keep things on track and on time.

You can’t take the chance

We’re helpless to resist the step-by-step hook though, perhaps out of fear that we might be missing the solution to the Gordian Knot, the Rosetta Stone or perhaps finding the location of Atlantis.  That promised quick fix answer to our most frustrating challenge, the one that has seemed just out of reach for so long – might be right here in front of us, miraculously, and all dumbed down to make it seem so simple.  All we have to do is read this article, blog post or link to another website.  It’s like taking a diet pill, isn’t it?

Oh, and the five reasons I teased you with at the start?  Let’s see:

• Bullet points are easier to remember than paragraphs

• You’ll be able to recite the points later, perhaps at a meeting where you’ll look good

• Remembering the 1-2-3 steps will gain you instant credibility outside your functional circle

• There’s less risk of challenge to bullet points than to explanatory text

• The author can prepare an article or posting faster this way

And in case you haven’t guessed it by the above, yes, the number of steps, reasons, causes, etc. is usually a made-up affair.  Many authors first decide on the number, then back into the explanations.

It’s all about getting you to read their stuff.

But that would be a 6th reason.

Why do we think that compensation survey data is the equivalent of Moses coming down from the Mount with the tablets – the ten commandments?  That whatever the survey says must be right?  We don’t believe that about what we read in newspapers anymore, or see on television, or certainly not from the “anything goes” internet.  So do you think that a compensation survey is somehow the last bastion of a “trust me, I saw it here” innocence?

Are you kidding me?

Consider your own organization; who is responsible for completing those compensation survey questionnaires?  Some high level specialist possessing an in-depth knowledge of the organization’s jobs, organization charts and inter-relationships?  Or perhaps you tap the lowest level employee,  the newbie, who finds themselves assigned with the task that no one else wants?

Do you think that your organization is the only one using the inexperienced to complete undesirable tasks?  Or is that common practice?  And somehow out of this skewed process you think that the result of inexperience, rushed deadlines and minimalist involvement delivers gold?  Delivers results that deserve to be treated as gospel?  That whatever the resultant survey report says must be accurate, must be a reflection of the prevailing pay practices out there, and must be representative of what others are paying for your job?

Seriously?

I have the number!

Compensation practitioners will tell you, that management has a tendency to take the number you give them and run with it – often ignoring whatever cautions or qualifiers you might have tried to provide.  Perhaps the job match is tentative, or only five companies showed a match at all, or all that is available is national data, not your industry or revenue size.  Many managers won’t see it, they won’t hear  the “yes, but,” because now they have the number in their hands.  That’s what they care about.  Unless of course they don’t like the number you gave them; then you’ll get their attention – usually in the form of criticism over the data sources, the process and on a bad day even your professionalism.

Some survey providers or consultancies offer their own “system” of job evaluation that’s tied to a proprietary survey software – or an evaluation process advertised as objective.  This could also mean that they’re guessing at a market number, based on algorithms (how many managers understand what that is) and formulae to project a marketplace figure – on the basis of what other jobs are being paid.  So if you know the value of Job A and Job B the “system” would offer you a projected figure for Job C.

Yeah, you could take that to the bank.

So what’s a good practitioner to do?

Of course, if all you’re looking at is a number in your hand, you might lose sight of the fact that the figure you’re running down the hall with is a simple formulaic guess.  Which could later burn you and the poor soul who gave you the data.

So I have two simple pieces of advice: 1) use multiple survey sources to establish a trend of information, and 2) avoid giving out draft information.  And if you can’t do #2, provide the figures in writing, accompanied by whatever qualifiers you feel are necessary.

CYA.

For those who have spent most if not all of their career in the Compensation arena the upward pathway likely started at the bottom of the ladder, writing job descriptions, completing survey questionnaires and evaluating jobs.

Eventually you worked your way up the food chain into survey analysis, market pricing, structure design, incentives and program development. You mastered the various formulae, charts and graphs, could make Excel dance on a dime and you could happily debate the various and complex techniques that would befuddle your Human Resource generalist colleagues. If you stayed at it long enough you eventually became a master technician for the “hard” side of Compensation.

You carried a calculator everywhere. 

The Hard Side

The “hard” side?  This designation represents the body of knowledge and experience surrounding the traditional view of compensation practitioners – from the outside looking in.  Such are those who manage the technical analysis of impersonal data bites – that black & white world that only deals with neutral and impersonal facts. 

Subjectivity is not allowed here.  We are usually placed in a small cubicle and left to our own devices – with our computer and survey books.    No one stops by to chat.

At Christmas we don’t receive any cards.

Then it happens; one day you’re asked to walk through the beaded curtain into a new world, toward a new career in something called Compensation Management. This is exciting, because on the other side is increased pay, a loftier title and finally recognition as a “player” within the HR community. 

The Soft Side

You are assigned internal clients, front line managers who aren’t interested in your formulae, charts & graphs or technical babble. They want you to solve problems, provide solutions, to talk with them and explain how Compensation can help them achieve their business objectives.   You are expected to become an advisor, deeply involved in “what do we do now“? scenarios.

This is the “softer” side of Compensation, where rules become guidelines, policies become politics and the proper answer to most everything is “it depends.”

But not everyone makes it safely through that beaded curtain, though.  That’s because, besides the cool new business card the journey requires a mindset change as well, into a place where your comfortable analytical tools aren’t as much in demand and instead you need something called “relationship competencies” to succeed. I’ve seen many people falter at the curtain; some do not want to pass through – and others have stumbled through, only to eventually burn out like a meteor shooting across the night sky. 

Why do some fail to succeed once through the curtain?

• Non-Exempt mindset: Some are not comfortable becoming part of management, as they continue to identify themselves with their former colleagues and find it difficult being labeled “management” and required to support a particular view of employee reward.

• Too comfortable with technical analysis: Figures don’t lie, they just are.  Can’t argue with that.  Can’t be blamed for that. There’s a comfort in dealing with the neutral, just reporting the facts.  Some prefer to stay in this “safety zone.”

• Uncomfortable with multiple answers for the same question: A common problem where differing circumstances can result in differing answers.  Like the ground shifting beneath your feet, the certainty of sameness is replaced by “it depends.” Life isn’t all black and white anymore.

• Preference to let policies and procedures make the decisions:  Some folks don’t like to stick their neck out, to face being challenged and having to defend their recommendations.

• Preference for the safety of the number:  As compared to dealing with the people who are affected by those numbers.  You’re in HR, so you should be at least somewhat of a people person – sensitized by how your recommendations impact employees.  Some aren’t comfortable with this role.

Back when you were an analyst you weren’t expected to develop tactical strategies and recommendations; you read the surveys, tabulate the spreadsheets and report your findings.  That’s it.  Then you go home.  Sound harsh?  Not at all, as proper analysis remains a critical component for the making of informed business decisions.  But if that’s all you do . . . ?

To be an effective practitioner of compensation management is to straddle both sides of the Compensation function;  you must understand the technical aspects of where the numbers come from and what they mean, but you must also adapt and thrive within a new environment where your role becomes an influencer of management decisions.  To be successful you need to breathe the crisp air of business realities and when dealing with internal clients be able to shake up those technical rules you learned so many years ago; don’t let them rule you.

But sorry, you still won’t get Christmas cards. They go to the HR generalists.

Compensation management is a challenging role, requiring you to balance the numbers, the employees, and the realities of business operations – all while periodically sticking your neck out to recommend a potentially contentious course of action. 

Or you could sit back and let established policies and procedures do the talking, though that’s probably not the intent of your increased salary and important title.

What’s it going to be?

The phrase, “must be able to work with an Executive Assistant’s PMS” was left in a finalized job description and eventually found itself placed in the permanent files.  No one read the text, just processed the description as submitted.

In another example, the text from an incentive performance appraisal form read like an Average or Satisfactory performance effort, with no particular achievement especially noteworthy or highlighted for attention.  One would presume therefore that the accompanied rating was in fact “Average.”  Yet the employee was actually rated “Superior” and granted a large discretionary bonus award.

Is anyone reading this stuff?

Have you seen your own examples of this behavior?  When paperwork processing is viewed and handled as more important than what’s actually written on the paper?  As if the submittal of the form(s) is project completion itself; the rest is incidental, sort of a by-product.

This by-product (otherwise known as the text) could be replete with erroneous statements, inappropriate language, assumptions not approved by management, etc.  Or you could have missing elements that are critical to the credibility of the form – and to the process itself.

We’ve all heard the rationale (“excuse” sounds so lame).  Sometimes you find so much effort invested in simply getting papers returned from management (job descriptions, performance reviews, incentive assessments, etc.) that quality control becomes a secondary consideration.  It’s like you’d be asking for more from them if you also expect the forms to make sense.

When processing large amounts of paper (focal date reviews, annual incentive awards, etc.) the papers submitted early likely do receive an appropriate scrutiny, simply because they’re the first ones received and you have more time.  But then it gets harder to keep pace as more papers keep coming in.  And right before the due date there’s likely to be a flood of last-minute entries.  So eventually you find yourself merely processing the incoming mail, checking off the manager’s name with a, “Yep, we got it.”

Sound familiar?

The same problem arises when you expect the performance rating text (the supportive material) to match the submitted score.  That’s reasonable though, isn’t it?  However, if you read the review without looking at the score, how many times would you be able to predict the answer?  How often does the “Superior” rating read like “Average?”

Yet these gaffes do get processed, are read into the official record and personnel files, and are possibly the same documents that could see the light of day in a courtroom.  Because no one took the time to read what was written.

What did you do?

If you did notice such inconsistencies (for lack of a less polite term), what did you do about it?  Did you send the form(s) back with a polite, “try again,” or perhaps you refused to process the reward payment until the offending manager got it right.  Be honest now; how often do you put on the policeman’s hat and risk angering your management team?

And therein lies the problem.  If you don’t read the stuff, how do you know whether you’re holding gold or lead?  Quality or garbage?  And you can’t correct the unfairness of the system if you don’t know which submitted form is wrong, and who committed that wrong.  You’re relegated to an administrator, a paper-pushing drone.

Out in the real world there are many managers who, in effect are saying, “how do I fill out this form to give Bob a superior rating?”  That’s what they care about, and even start the process with “Superior” already checked off.

But let’s be fair.  Often times corrective action isn’t that easy.  Every HR pro worth their salt will tell you, it’s all about picking your battles.  It sounds easy to reject a manager’s submitted form, but we all know the official response is often a matter of who is the offending party.

Sometimes, like with job descriptions and the PMS comment, you may have to make the corrections yourself.

But even a spotty record of enforcement would be an improvement over the paper pushing that happens all too often.  If managers know you are reading what they write, perhaps that fact alone will serve to reduce the infractions.

How many success stories start with the phrase, “I took the easy road”?

Most companies with global operations tend to pay their internationally-based top level executives in accordance with some form of global compensation structure – with the intent to level the playing field for those with multiple country responsibilities.

However, for the rest of their international population it’s not as straightforward.

The Challenge

Companies with local national employees face a challenge and a risk when it comes to their decision as to how to reward in each of their operating countries.    Do they “do as the Romans do” and follow local practice, or do they seek to create a standardized global framework in an effort to standardize pay practices?

For those charged with developing tactics to effectively pay employees across the globe, the headache is in dealing with a diverse collection of economies, cultures and competitive pressures – some of which may be moving in different directions.  However the approach of recognizing country-specific differences in pay methodology often comes up hard against the interests of corporate staff administrators, who traditionally look for the easy way, the simple way, the one-size-fits all way of dealing with far-flung employee groups. 

The headquarters staff will ask, “what difference does it make“?  Unless otherwise required by legislative action or representation, why can’t we be fair to all our employees in the same way?  The metrics below illustrate what they would wish to standardize for each country:

• Value (price) jobs irrespective of locale.  Some prefer to use the US dollar as a global “common denominator.”

• The pay mix of base salary and incentives.  This presumes that everyone views the opportunity for variable pay in the same fashion.

• Universal date pay increases.  Every employee should have their performance review at the same time.

• Average pay increase percentages.  The percentage should be fixed with a global percentage, not country-specific.

Why Not?

Why doesn’t one size fit all?  Why can’t you treat all employees in the same fashion, no matter where they’re working; they all belong to the same company.  Perhaps you should consider these points before reaching for that cookie cutter.

·         Economy:  When dealing with country-specific inflation rates ranging from flat to 20%+, do you really want to offer the same percentage salary increase?  What if one country’s economy is struggling (US), while another remains relatively unscathed (Australia)?

·         Culture: In some regions job and income security needs command greater interest over pay-at-risk, so in the pay mix the base salary dominates the variable portion.  For example, while China has a very aggressive sales compensation environment, India shows more interest in base salary and the CTC (cost-to-company) package than variable compensation.

·         Competition: Companies react to the cost of labor vs. the cost of living.  If their marketplace rewards in a certain fashion (pay mix, commission vs. bonus, quarterly vs. annual rewards, etc.), companies who provide a different approach risk lower employee engagement and a talent drain.

·         Representation: National unions and Works Council impact on pay actions could reverberate up the hierarchy as companies strive to maintain equitable treatment with their other employees.

To be fair, varying practices according to country-specific conditions could cause a degree of consternation with the back office or headquarters staff and their computerized systems.  These are folks who like things neat and pretty, the path of least resistance.  “Where’s my easy button“?  In their defense though, senior management often asks for standardized metrics that may be difficult develop and compare:

•        Tabulating global statistics when definitions or methods vary

•        Identifying global trends based on diverse conditions

•       Balancing the impact of cross border movement

If you force international operating units to convert their practices to an common format and methodology, the result could be more than just confusion and local administrative difficulties.  It could also mean the greater likelihood of over payments in some quarters while paying less in others – all for the sake of sameness and common report generation. This would offer up a combination of hurting employees while also hurting the business.

The easy road of simplified administration is rarely an effective rationale when making proper business decisions.