Better Recruiting

FYI: Your Compensation Model Sucks

Nobody questions that most businesses exist to serve the business owners, and to generate profits. Hopefully, they’ll do some great stuff for their customers and communities along the way. But, it’s my loud-mouthed opinion that most companies do a really lousy job of really compensating their key employees, and simultaneously “helping” poor-performers move along little doggies.

So, when Dawn Turner reports that an Executive Assistant Gets $152,000 Bonus for Creative Problem Solving, my ears perk up.

• How could you reward and promote key attitudes and values that would benefit your company culture?
• How can top-achievers receive truly incredible compensation, naturally, through them performing their jobs?

Now, Good to Great teaches that it’s not how you pay, it’s who, and I must agree with that. No compensation plan will get deadbeats to perform like athletes. But, when you combine the right people, and the right business focus with truly innovative compensation models that reward top achievement, you will have a perfect storm of reasons why your company will attract and retain the sharpest and best people for your industry and niche.

The other shoe? The following will kill your attempts and good compensation and make it suck even more:

• Your plan takes so long to realize real payout that people either forget about it, or don’t care.
• Payout is only achieved after so much work that many people feel it’s not worth it.
• The people already getting “all the pay” are the only ones benefiting from the new pay structure.
• Your plan is based too much on subjective, changeable rules based on whim and decision rather than verifiable objective results, data, etc. The instant your employee sniffs that they need to be “in the club” to get the payout, your true superstars (aka diamonds in the rough) will flee like rats on the Titanic.
• Your plan actually creates unintended consequences, like paying stock options out to (hopefully) improve dedication to your company, but instead creates an intense outward-focus on the stock market, and a frenetic push toward short-term gains (the next closing bell) rather than long-term success.

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Tags: Attracting Talent, Employee Performance, People, Retention, Salary