Employee compensation was a lead story in The New York Times on Tuesday. You can find the headline "One-Time Bonuses and Perks Muscle Out Pay Raises for Workers" on the front page of the Business Day section. The increase in variable pay practices is no surprise to the readers of Compensation Cafe, but the editors of The New York Times have determined it's hot stuff for their readers.
Why? It's important for us to try and figure out the answer. Employee compensation is a trending media topic, I believe -- and I've been trying to get you to believe it, too. For one thing, there are opinions forming about our profession, and we better be ready for the spotlight before it hits us. For another, at some point in the future, the compensation program that we are so carefully nurturing could be the topic of public conversation -- it may not be inevitable, but it's sure becoming much more likely.
Do I know why it's important for us to understand this trend? Here are some of my ideas.
- It sells papers. If your company isn't explaining compensation, the media might as well. And here's the thing that we need to keep a close eye on. When employees are getting their education about compensation from the media, does that mean we, in compensation, have finally taken our employee relationship for granted too long, and allowed employees' trust to shift to outside sources?
- Everyone is trying to read the tea leaves about the economy -- are we on the way up, across or down? Should we recognize a bubble has been forming, and liquidate our retirement investments (so we can bury them in the back yard)? The media is starting to figure out that how companies spend their money on employees provides clues to the companies' sense of long-term security. Next thing you know "the Street" will be evaluating your company's stock price in relation to the proportion of variable pay to salaries in a given year.
- The media is starting to figure out that everything we do in compensation is communications. If you watch how a company handles compensation, you can learn a lot about its business principles, its belief in the future, as well as its Human Resource practices. (In comparison, excessive executive compensation typically tells you more about the CEO and the Board than any single operating issue.)
- As salaries continue to languish, everyone wants to figure out why. And since we can't get good answers there's emotional baggage to deal with. It's oddly reassuring to hear that most of us have been in the same boat, getting crummy increases (even when execs are getting such a better deal). And while it's alarming to The New York Times' readers that their salaries are being whittled away, it is somewhat reassuring to hear some other sources of income exist.
One last thing. Talk about a star turn! When the (arguably) best paper in the country wants real answers to tough questions on employee compensation, to whom do they turn? A Compensation Cafe alum, of course -- Stephanie Thomas, who was a recent regular contributor. She and her colleague, Linda Barrington, who were both quoted in the article, are leaders in the Institute for Compensation Studies in the ILR at Cornell.
How about you? Do you have an opinion? Become a celebrity by giving us a quote or two.
Yearning for celebrity? You'll stand out in the compensation crowd once you read the popular eBook, Everything You Do (in Compensation) Is Communication. You'll find it @ www.everythingiscommunication.com. Margaret O'Hanlon, CCP collaborated with Ann Bares and Dan Walter to create this DIY guide to compensation leadership. Margaret is founder and Principal of re:Think Consulting. She brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, Margaret was a Principal at Towers Watson.