Compensation Cafe

Now Hear This: Steer Carefully Around Fads & Fashions!

Tell me... what's the hottest new trend in compensation today?

OK, show of hands: How many (besides me) cringed in response to that question?  Yes?  Gold stars for all of you!

As with, apparently, every other field of human endeavor, fads in compensation (and in people management overall) come and go.  Some of them stick and eventually become absorbed as part of the enlightenment and forward movement of the profession.  Others, not so much - and the early adopters live to regret them or quietly resign for new pastures, leaving the aftermath to their sorry successor.

So, when a new trend does come rolling across the horizon, how do you gauge whether pursuing it is right for you and your organization?

Leadership expert Dr. Todd Dewett shares some good advice in this week's issue of the HRExaminer about "keeping up with the Joneses."  He tells us that there are only two valid reasons to grab a seat on the latest people-related bandwagon:

• Honest fit, and
• Sufficient change capacity.

Determining "honest fit" requires a careful, sober examination of the match between the particular practice or tool and your organization's business needs, values and culture - as well as your compensation philosophy and capabilities.  Does it really - really - mesh with and support the way your organization operates and where it is headed ... or are you being seduced by a bunch of cool sounding buzzwords?

Equally important is a realistic appraisal of the organization's change capacity, something I fear we reward geeks can be prone to overlook.  As Dr. Dewett points out, "every organization has a finite ability to reinvent, improve and transform itself at any one point in time."  He suggest scanning the organization to get a handle on the number and kinds of change initiatives currently underway and making an honest assessment as to whether there is truly any "gas left in the tank."  Imposing a new compensation innovation, even a well-chosen one, when everyone (especially your critical first line manager group) is suffering from severe change fatigue could be setting the stage for inevitable failure.

The hottest new trend in compensation?  Right for you ... or not? 

Hopefully you're prepared to make that call!

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time.  Follow her on Twitter at @annbares.

Image: Creative Commons Photo "Miss Sixty Fall New York Show" by Art Comments

People Stay Because They Are Free to Leave

We all knew it was coming. In case you missed the announcement, here are the statistics from today's "News & Trends" by Joe Light in the Wall Street Journal.

"In February, the number of employees voluntarily quitting surpassed the number being fired or discharged for the first time since October 2008, according to the Bureau of Labor Statistics. Before February, the BLS had recorded more layoffs than resignations for 15 straight months, the first such streak since the bureau started tracking data a decade ago."

Of course we need more than a month of data to call it a trend. (Just thought I'd mention the obvious given what the Market did today.) Nonetheless, we all know the pent up desire to dash is there, and we all know why.

So what to do when 20% of the members of the Ladders.com (job board specializing in salaries over $100,000) participating in a questionnaire indicated that it would take a raise of more than $25,000 to get them to stay? And 42% of techies on Dice.com (job board for tech professionals) said they wanted a higher salary in order to stay? Face it, you won't be able to throw real money at this for a while.

What to do? It's simple, really. Start at the beginning. Absolutely great advice in the article from Alyson Parker, Director of Human Resources at Florida Hospital Flagler, "We're trying to catch people before they even start looking for a new job . . ."  She's conducting one-on-one "stay interviews" to find out what's on people's minds and what she can do about it.

For some employees, it may be too late. But truthfully, what are they going to find at those other companies? They may get a salary bump, but they'll be back in a setting where leaders are doing their best to rebuild employees' trust in the future.

Do you want to keep all of your talent? That's a valid question, given the fact that a degree of voluntary turnover is healthy for companies -- bringing in new ideas, experiences and talents. So decide that one first. But if you haven't started working on employee retention yet, what are you waiting for?

We'd all like (and sometimes, need) more money, but people stay because they have interesting jobs, opportunities to learn and move ahead, recognition for their work and managers they like to spend time with. All of these can be turned into engagement intiatives, career development programs, and so on. And really good chats -- person to person -- followed by action, as Alyson Parker suggested.

As our Trusted Advisor, Charles Green has pointed out:

"Great firms don't mistake restraint for retention. Their people stay because they are free to leave -- and choose not to. And those who do choose to leave are celebrated as alumni, not shunned as disloyal."

Check around you. Are you leading a great firm?

Margaret O’Hanlon is founder and principal of re:Think Consulting.  She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results.  Margaret brings deep expertise in total rewards communication to the dialogue at the Café; before founding re:Think Consulting, she was a Principal in Total Rewards Communications with Towers Perrin.  Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University.  Creative writing is one of her outside passions.

What is the Value of a Piece of Paper?

What do you do when an employee informs you that they have just achieved an academic milestone: a college degree, an advanced degree, or a certification from a professional association?  After offering congratulations, do you take them to lunch, perhaps tell them to take the next day off, or do you do more?

Do you somehow reward them for that accomplishment?  Perhaps with a salary increase, or a promotion?

Many employees seem to expect that, when they achieve some academic credentials that come with a piece of paper suitable for framing, they should receive an increase in pay, a bump in title, if not an outright promotion.  "I am more valuable to you now," they seem to imply.

However, if you don't need another MBA graduate, or a senior engineer, legal counsel or whatever, should you pay extra for one?

Some managers feel compelled to react with salary / title increases; they want to acknowledge the employee's personal achievement and avoid the risk of de-motivating good people.  They especially don't want to lose someone who is ambitious and career-oriented.  Such a loss might be perceived as a mark against their management capabilities.

But is raising the cost structure a good business decision, or a feel-good, I-want-you-to-like-me emotional knee-jerk reaction?  Do managers have the right answer to the "why?" question?

If you already pay for educating your employees - through tuition reimbursement - should you be expected to follow up with more once the company-paid courses run through to completion?  Chances are you don't require employees to remain with you for a defined period afterward, right?  So technically they could use your money to prepare themselves to work somewhere else.  Where is the fairness in that?

Have you asked yourself, what's the market value of an employee with a higher education or certification level?  Compensation surveys don't differentiate on the basis of whether employees have a particular degree or other credentials.  In some cases educational requirements are mandated before one can assume certain roles (Engineer, Attorney, Nurse, etc.).  At the end of the day what the market highlights is the common pay rate for experience, knowing the job and being competent at performing it.

Does the market say a premium should be paid?  No.

Perhaps a promotion then?  But job grades are not typically influenced by formal education levels either, and no credible job evaluation system scores on that basis - only equivalencies.  Job evaluators recognize that, while what the employee knows how to do (job knowledge) is critical, how that knowledge was attained is less important.  Life experiences do count, trumping the piece of paper.  Book learning is not an evaluation factor.

If ultimately the newly certified or graduated employee returns to the same job function, then what does the company receive for granting extra money?  If the job role remains the same, where's the ROI?

If you use any sort of position control process, you should know how many heads of each job the organization needs to fulfill its mission.  When you create more heads your costs will increase, but likely not your effectiveness.  So why would you pay for an extra MBA, senior engineer or legal counsel - when you don't need them?

You can acknowledge an employee's personal achievement without increasing your fixed costs and possibly creating disruptive internal equity concerns among other employees.  Remember that fair and balanced treatment is a perceived state-of-play, and the employees are always watching.

So offer your congratulations, take the newly minted certificate holder out to lunch, and give them a day off.  Tell them that they're now eligible for advancement when a higher position come available - but have a care before raising your fixed labor costs without a corresponding increase in ROI.

They may be more valuable to you - but that is for tomorrow.

Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  With over 30 years Rewards experience Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a brood of cats. 

Image: Creative Commons photo by Rich Moffitt

Shopping at the Compensation Cafe

Hi, I’ll have a slightly reduced base salary, a side of base benefits with dental, some extra life insurance, a childcare allowance, a discounted fitness club membership, the ability to work from home twice a week and a supersize order of recognition, please.

I think we all got the message by now that budgets are tight, engagement is low and it’s important to spend carefully.  We’ve talked about rewarding top performers, not leaving solid performers out in the cold, increasing variable pay, implementing recognition programs, global rewards, planning compensation as part of an overall talent management strategy and we’ve even killed and resurrected the performance review a few times. 

We've expanded our thinking but we still may not have enough money to spend on rewards, let alone broader workforce strategies.  So… if we can’t afford salary increases, can we deliver more value for the same (or less) money?

By ‘more value’ I’m talking about two things: 1) perceived value; and 2) comparable value.

Perceived value means how the employee values what they receive.  A good way to increase perceived value is to offer targeted rewards and looking around, we see that personalized practices are in: Benefits has Cafeteria Plans.  Talent management has targeted development plans.  Consumers are starting to benefit from co-creation, where design happens together with customers.  Why can’t we do the same thing for compensation? 

There are good reasons:

• It’s difficult: Instead of getting a nice predictable paycheck employees and employers alike have to become experts on taxation law and qualified benefits.  And even more challenging to do this globally.

• It opens the gate to unfairness charges: It can only work if rewards are based on clearly defined and communicated standards, such as a point system, but that’s a daunting undertaking.  There are a few pioneers in non-traditional rewards and I predict we’ll see more in this area soon because it's such a promising niche.

• It’s hard to break the mindset: Compensation is still thought of as money and in many organizations HR isn’t organized to have compensation professionals extending into broader HR.

Despite these challenges, companies can dramatically increase employee perceived value if employees feel like they designed their own rewards packages.

Comparable value refers to the value of what you get instead of cash.  For example, an employer might offer education, transportation, or child care subsidies in lieu of cash.  Some employer provided benefits are taxable for the employee but no more so than income – so net, net, employees may well come out ahead.  And the employer may be eligible for a tax deduction, reducing total workforce spend.

These are just a few ideas to start the conversation, either here at the Café or in your own organizations.  I'd love to hear your ideas.

Picture courtesy of altruinstincts.

Laura Schroeder is a Compensation Strategist at Workday, headquartered in Pleasanton, CA.  She has more than twelve years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and is currently pursuing a certificate in Strategic Human Resources Practices at Cornell University.  Her articles and interviews on HCM topics have been published in the US, Europe and Asia.  She lives in Munich, Germany and enjoys cooking, reading, writing and spending time with friends and family.

Cafe Named a Top Ten Talent Blog!

The Fistful of Talent/HR Capitalist v7.0 Talent Management Blog Power Rankings are out, and we are proud to see that the Cafe has made the top 10 of the 25 blogs honored.

Click over to see the list - guaranteed you'll discover some new bloggers that you should get to know better.

Big thanks, as always, to Team FOT for the time and energy they put in to recognize their fellow bloggers!  Warm congrats to my fellow Cafe bloggers for their awesomeness!

In Defense of the (Insidious) Performance Review. I Think.

So it's time to kill the performance review.  Again.

The latest charge is led by Samuel Culbert, author (along with Lawrence Rout) of Get Rid of the Performance Review! How Companies Can Stop Intimidating, Start Managing and Focus on What Really Matters.  Professor Culbert summarizes his thoughts in the Wall Street Journal article Get Rid of the Performance Review that preceded publication of his book and also in the more recent Journal article Yes, Everyone Really Does Hate Performance Reviews.

His primary point as I see it: That performance reviews, "one of the most insidious, most damaging, and yet most ubiquitous of corporate activities" should be "replaced by a straight talking relationship where the focus is on results, not personality."

He isn't the first to come out against the formal appraisal process and in praise of replacing it with regular coaching and feedback (although he does strike me as perhaps notable in the sheer amount of vitriol he hurls).  And it's difficult - on some level - to completely disagree with him or with those who came before him preaching along the same lines.  No performance development or improvement is going to come out of the kind of once-at-the-end-of-the-year, back door "gotcha" assessment that he describes and that, for sure, some organizations and managers are guilty of.

(Funny though, my experience would suggest that most of our problems lie at the other extreme, in a tendency to whitewash performance conversations in an effort to avoid anything difficult, let alone insidious.  But that aside...)

Any employee I've ever interviewed who had good things to say about a performance management process talked about a direct manager who was committed to (and skilled at) daily, two-way dialogue about how things were going.  So I am inclined to agree that regular coaching and feedback is undeniably the best approach to managing employee performance. But ... is it sufficient?

My experience, particularly what I've learned from working with organizations who have tossed out traditional performance reviews in favor of regular performance conversations, would say it is not.

In a world populated with human beings, lawyers and business competitors, regular performance conversations need to be accompanied by three things:

Structure.  Without the timeframes and discipline imposed by a regular process and performance calendar, performance conversations have a tendency to drop off the radar screen when managers get harried and overloaded. Which is often.

Documentation. Like it or not, performance conversations, particularly ones dealing with performance issues or challenges, must be documented.  Yes, of course it is a CYA activity, but that is the nature of the environment that our organizations are operating in.

Conclusions.  I've talked before about performance processes with no final rating or assessment ("rating-less systems").  In a world where more and more decisions (base salary and incentive awards, for starters) are being linked to individual performance, somebody somewhere needs to pass judgment on how well an employee has lived up to his or her job expectations.  Pretending otherwise strikes me as disingenuous.

By the time you wrap these arguably necessary things around your regular performance conversations, you uinvariably end up with something that bears strong resemblance to a performance management program (aka the root of all corporate evil).

A good friend of mine likes to describe performance management as a necessary but unsolvable problem.  I have to say that there are days I feel the same way.

What do you say?  Where am I wrong here - what have I missed?

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time.  Follow her on Twitter at @annbares.

Are Your Managers Ready?

One of the emerging talent management themes is that one size does not fit all.   Strategic organizations tailor their rewards and practices to different segments of the population.

People are different.  They have different work styles.  They want different things at different times.  If your rewards strategy takes these things into account you’re already ahead of the pack. 

The catch is that managers manage people and managers are people, too. See where I’m going with this?

Let’s look at some potential workforce strategies and possible causes for disconnect between each strategy and your people managers:

• Higher increases for top performers: We can measure how much of the merit budget went to ‘top performers’ but managers are as biased and prone to self interest as anyone else. They have likes, dislikes and personal preferences when it comes to how people work. So, your metrics may tell you who's being rewarded but may not tell you what you're really paying for.

• Developing high potential employees: Let’s say you’ve identified a pool of high potential employees and gloss over all the potential issues with that.  Now what?  They still report to someone, unless you plan to reorganize them into a special high potential task force and bring in Donald Trump.  So now the question becomes, are your managers on board with your high potential strategy?  Do they have sufficient span of control to develop the hi pos in their care?  Are they effective delegators?  And most importantly, are they confident enough not to feel threatened by the situation?

• Team building: A good team builder is someone who helps bring the team closer together rather than creating a competitive or ‘clique’ environment.   One of the risks posed by a manager who is not an effective team builder is that people feel alienated or not included in the ‘inner circle.’  There is a social aspect to team building as well, which is often overlooked.  For example, I know several well-intentioned managers who would never think of taking their team to lunch, simply because it doesn't occur to them.

• Diversity: Studies have shown that diversity can have a positive impact on the bottom line.  Embracing diversity means more than just working with people from different cultures.  It means feeling comfortable with different communication and work styles.  While some managers are able to bring out the best in everyone, playing to people's strengths, others prefer everyone to work in the same way – which is perhaps more appropriate for the shop floor than for creative work.

• Work life balance: This is arguably a sub-point of diversity but it’s important enough to treat separately because it's the 'new black' in non-monetary rewards. Your company may have a fantastic work life balance policy but not every manager feels comfortable managing remote employees or people who work part-time or flexible hours.  Your work life balance strategy will only succeed if your managers are on board.

• Weeding out low performers: If headcount is tight there may be a conflict of interest when it comes to low performers. Line managers tend to think tactically rather than strategically and from a tactical perspective someone may be better than no one.

• Retaining high performers: Some managers feel threatened by high performers.  I’m just saying.

My point is that your manager strategy can’t be divorced from your overall workforce strategy.  At the receiving end of every strategy is a manager who will promote it or fail to promote it, based largely on their own management skills and perceived self interest.  So it’s important to bring the two strategies into alignment. 

Here are a few recommendations:

• Leadership and/or diversity training – Help managers get comfortable with delegation, different work styles and focusing on the fine art of management.

• Less hierarchy and more communication between management levels – If you only hear from your managers, you’ll only hear what your managers want you to hear.  Surveys and focus groups aren’t perfect vehicles for communication but they give people an opportunity to feel included.

• Look for potential ‘hot spots’ – Watch for possible red flags such as a newly minted manager leading a highly experienced team.  Different generational and/or cultural  work styles may present an opportunity for new levels of performance.

• Mentor new managers – There’s no substitute for personal experience but having someone provide constructive feedback can speed the process along. 

• Reward for career development – This is really important because no one wants to plot their own downfall. If you want your managers to willingly develop the people who report to them, career development needs to be a recognized and rewarded management activity. 

There’s no perfect strategy but there's a happier medium between unachievable perfection and hoping for the best.  Good management requires attention and investment like anything else. 

Also, it goes without saying that managers are not the only ones who can benefit from leadership and diversity training, or from being recognized as mentors. 

But that’s another topic.

Picture courtesy of IMDb.

Laura Schroeder is a Compensation Strategist at Workday, headquartered in Pleasanton, CA.  She has more than twelve years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and is currently pursuing a certificate in Strategic Human Resources Practices at Cornell University.  Her articles and interviews on HCM topics have been published in the US, Europe and Asia.  She lives in Munich, Germany and enjoys cooking, reading, writing and spending time with friends and family.

Women Can Earn More! Pass It On . . .

The more things change, the more they stay the same. At least that's the way it seemed to me, reading the findings of Hannah Riley Bowles, an associate professor from Harvard's Kennedy School of Government in the New York Times. When it comes to negotiating higher pay, " . . . people find a woman who does . . . compared to the one who does not, significantly less attractive . . . Whereas with the guy, it doesn't seem to matter."

How much do we in HR play into this social perspective? It's worth some soul searching, since we may be contributing to its continuing influence on women's careers.

In case you need reminding (or you don't visit the Compensation Cafe regularly), " . . . Even though working women tend to be more educated, on average, than working men, females who work full time only earn about 77 cents for every dollar that men earn annually, according to the Institute for Women's Policy Research. That's up from 59 cents in 1965."

We're in a perfect position to help women adopt more effective negotiating behaviors. Ms. Bowles and her colleagues offer research-based suggestions to women who are seeking a raise. These suggestions can easily be passed along to the employees we counsel.

• Don't mislead yourself. Many women believe that if they work harder than anyone else, they'll automatically get paid more. You don't often see men acting this way, especially since it doesn't work. If you believe you deserve a raise, pursue it.
• Use data. Ms. Riley Bowles' research indicates that, " . . . with ambiguous information, women set less ambitious goals . . . They asked for less in a competitive negotiation and got less." Employees should negotiate with some real knowledge of the competitive salary for your job. I know that we in HR hate to have to deal with the poor data available through Salary.com or Vault, but it really is our own fault if we won't divulge the actual pay opportunities (in the form of salary ranges) available to the people in the job.
• Prepare. Envision what kinds of objections your boss may have and practice your responses.
• Don't burn bridges. Often people who are not skilled or confident about salary negotiations are so frustrated by the time they get their courage up, their patience is limited. "A new study by Ms. Riley Bowles shows that women are more successful if they explain why their request is appropriate, but in terms that also communicate that they care about maintaining good relationships at work . . . Instead of explaining why you deserve a raise directly, for instance, frame it in terms of why it makes sense for the organization or the person you're trying to persuade."
• Start at home. Especially if you are negotiating for a promotion, make sure you have a plan for how you can help your family adapt. Will you need a new division of labor with your spouse? Can you successfully negotiate that change, too?

I love the Saturday business section of the New York Times because you never know what you going to find in there. Don't let this research get buried. Follow the link to learn more, then pass it on.

Margaret O’Hanlon is founder and principal of re:Think Consulting.  She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results.  Margaret brings deep expertise in total rewards communication to the dialogue at the Café; before founding re:Think Consulting, she was a Principal in Total Rewards Communications with Towers Perrin.  Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University.  Creative writing is one of her outside passions.

Comparable Worth: It's so 1980s!

Has Comparable Worth re-appeared in the 2010s?  A recent post ("The State of Pay Equity Regulation...") by Ann Bares of the Compensation Force Blog (and the Compensation Cafe) suggests that Comparable Worth advocates may be making an attempted comeback of sorts, via the Paycheck Fairness Act legislation, according to WorldatWork's Cara Welch.

For those of you old enough to remember, Comparable Worth was one of the major topics in the early to mid 1980s compensation circles, especially among some unions and employment-related gender rights and civil rights advocates. Essentially, Comparable Worth posits that we should pay people based on the internal (job content) "worth" of their job, not necessarily based on other factors, such as the how the external marketplace values the job. In other words, a job that requires more skills/training (however that is defined, such as by educational requirements, etc.) should be paid more than jobs requiring fewer skills, regardless of how those jobs may be valued in the external labor market.

The overarching Comparable Worth idea/theory was that some jobs and occupations were being systematically devalued (discriminated against) based on the gender makeup of the occupation, and that the true value of the jobs' were being depressed by some sort of intrinsic gender bias in the marketplace. Thus, many female-dominated fields such as teachers, social workers and administrative workers were somehow purposely devalued in the marketplace, while many less-skilled male-dominated occupations such as construction workers, laborers, garbage workers ("sanitation engineers"), and semi-skilled production workers often made similar or higher wages than many of these more highly trained and educated workers.

Does gender discrimination exit in the marketplace today?  Undoubtedly some gender discrimination still exists in today's world, but there is already a labyrinth of federal state and local laws that cover gender discrimination (and nearly every other group is covered too - and most of the ones that aren't covered can claim "reverse" discrimination!). For those who feel discriminated against, there's an alphabet soup of agencies, laws and lawyers who would be more than happy to assist.

But I'm not buying the systemic discrimination conspiracy theory that allegedly justifies a legally-enforced Comparable Worth approach to pay determination. Where's Oliver Stone (the leading Hollywood conspiracy-theory director) when we need him?

Even in its heyday, Comparable Worth was largely a non-starter in circles outside of its major advocates. Comparable Worth was also struck down by a Federal Appeals Court back in the mid 80s in AFSCME v. The State of Washington. The court ruled that Comparable Worth was not a Title VII theory, and that the plaintiff (AFSME) had to show job similarity, not just comparable worth, to have a potentially valid claim of gender-based pay discrimination.  In addition, the court reasoned that since the State of Washington used market data in determining its wage rates, it therefore could not held liable for market-created disparities.

If Comparable Worth legislation were to be enacted today, even in a weakened form, employers might be forced to ignore or discount market forces in determining pay, which is by far the predominant method that employers utilize to evaluate their pay competitiveness and construct their cash compensation programs.

Back in the 60s, 70s and even the 80s, internal "job evaluation" (point-factor systems and other methods for valuing jobs based on job content) was a common tool in the compensation professionals' toolkit, but it has declined dramatically in popularity and usage since then. Even back then though, it was generally not the primary means of determining pay, but was considered alongside market pay data in most cases.

In the 2000s, studies by WorldatWork and others have shown that over 80% of employers utilize market pay data as their primary or exclusive means of setting pay rates. For instance, of the dozens of organizations that I have worked with in the past few years, only one of them (a public sector/government employer) utilizes internal job evaluation data in considering job worth, and they do so in conjunction with market pay data.

Comparable Worth may sound good in theory, and in a perfect world everyone would be paid what they are "worth." The problem today's Comparable Worth advocates have is that we already have a near-universal system that values jobs, and it's called the labor market.

RIP Comparable Worth.  Your time came and went - 25 years ago!

Doug Sayed is principal at Applied HR Strategies, a Seattle-area compensation consultancy, and the lead author of the StrategicPay Series' Base Pay Toolkit, a hands-on, "do it yourself" guide to developing cash compensation programs.  He has taught compensation and market pricing classes for years for HR/rewards professionals and at the college level.

Creative Confidence & Reward Design

We are facing challenging times in the field of rewards - working to create, implement and administer programs that support employee and organizational success in an increasingly turbulent landscape.

Many of us are well-schooled in the technical aspects of our discipline and work hard to stay abreast of professional trends and developments through formal schooling, certification courses, seminars and outside reading. Even with this strong foundation, though, we can feel overwhelmed by what the world dumps in our laps.  Successful reward design - solving reward problems in today's complex and fast-changing organizations - demands that we be able to transcend our technical knowledge base.

Rising to this challenge requires something that David Kelley (co-founder and first CEO of legendary design firm IDEO, now founder of the Hasso Plattner Institute of Design at Stanford, aka as the d.school) calls creative confidence.

As reported by Stanford professor and author Bob Sutton in his Work Matters blog, Kelley describes creative confidence in this way:

Certainly, ... definitive technical knowledge is crucial.  I want engineers who can calculate the right answers so that bridges don't fall down and airplanes don't crash.  As valuable as it is, however, such training -- with its focus on individual achievement under conditions under which the right answers are already known -- means that a lot of the people who come to the d.school for classes lack both the skills and the confidence to work on messy problems where the faculty don't know the answer (this is very disconcerting to some of our students) and the only hope is to keep pushing forward, observing the world and the people in it, identifying unmet needs, brainstorming solutions, and trying to develop prototypes that work -- and failing forward through the disconcerting process.

I think reward professionals have a lot in common with the engineers, mathematicians and scientists at whom Kelley aims his remarks.  In some sense, we are the engineers, mathematicians and scientists of the HR profession.  And, in the same way, part of our development as professionals in this field requires taking our well-honed foundation of technical knowledge and applying it to solve (from a reward standpoint) the messy, unstructured business problems our employers now face.

Getting there?  I don't have the answer, I'm just asking the questions.  But I leave you with a few parting thoughts as well as a great resource for beginning the journey.  I think that interacting and brainstorming with our peers - inside and outside the reward profession - is one avenue to increasing our creative confidence. Traditionally, we did this face-to-face.  Now social media (blogs, Twitter, online communities and the like) provide exciting opportunities to expand the boundaries of those interactions.

And here's a bonus to support your own creative design confidence, an amazing and free ebook called the Bootcamp Bootleg, which comes to you courtesy of the Stanford d.school teaching team.  The structure, steps, tips, models and illustrations that pack this little book are priceless ... and as on-target and applicable to reward plan design as anything else I've encountered.  Download it today; I guarantee it will become a staple and a source of wisdom to guide your own design efforts.

<Postscript - A few people have mentioned difficulty in downloading Bootcamp Bootleg from the link above. If this is happening to you, please try this alternative link.  Thanks!>

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time.  Follow her on Twitter at @annbares.

Image: Creative Commons Photo "Brainstorms at INDEX" by boetter