How Fair and Value Focused is Your Compensation System?
I have worked in organizations where supervisors doing essentially the same type of work received drastically different levels of pay. I have seen differences as great as 50%! It is true that such discrepancies emerge over time, especially when it is much tougher to reduce someone’s wages once you have already set a precedent for paying them at that wage rate. You don’t have to accept this discrepancy however. You can expect greater daily contributions from those supervisors that are getting more money each day.
In a similar sense, I really question at times the justification that exists for the daily wages we pay to our middle and upper managers. I struggle to see the added value that someone is providing to justify the additional $25,000 a year they are making in comparison to their direct reports. Sure, you might always have to leave the cell phone on or you might have to endure increased stress levels, but is the difference as great as the 4 to 1 or 6 to 1 pay differentials that exist in today’s workplaces?
This waste potential is concerning enough. We also must consider the efficiency and focus factors that apply to managerial positions. We pay these people much more per hour, but we lack the mechanisms to make sure that we are getting consistent contributions from these people for each hour that they work. For these roles, we operate largely on trust. All too often, we pay people for getting results that they really did not personally have that much to do with getting.
You don’t have to, and probably won’t, blindly accept my opinions. Some these thoughts only as cynicism. I don’t expect blind acceptance. I would however ask that you watch your people work. Look at what they truly give you each day in exchange for what you are giving them. Are you really getting what you are paying for?
DISCOVER MORE: A Matter of Job Ownership
Has Your Recognition System Expired?
I continue to be amazed by the number of organizations that either fail to recognize employee efforts at all on a consistent basis or fail to improve their recognition processes over time. Giveaways, such as free t-shirts, gift certificates, and coffee mugs are nice, but they cannot represent the only extra forms of saying ‘thank you’ that you will use over the next five to ten years.
Recognition systems have an expiration date. From a motivational theory perspective, this is supported by the work of Herzberg. Herzberg’s work explored the concept of satisfiers and dissatisfiers. What works as a motivator now will become only a dissatisfier in the future if it is taken away. In other words, over time people begin to take for granted the things that once wowed them. If your recognition process does not evolve over time, it will lose its effectiveness.
I have seen this happen in real life, in more than one organization. This is especially true if the organization achieves consistent success in improving performance. For example, if your site’s cost reduction efforts regularly save a million dollars or more each year, people will begin to expect more than a meal or a $25 gift certificate for helping you to achieve this level of consistent savings. If you don’t believe me, ask and listen to your people.