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I believe that you've got your directions reversed, Ann. Lowest is NW and highest is SE.


Doggone it, I believe you're right. This isn't the first time it's been apparent that the editor could use her own editor. Fixed it. Thanks!!

What you describe is both technically sound and conceptually exactly what everyone was SUPPOSED to have been doing for decades, Ann. Short-term immediately-past contributions are rewarded by fixed amounts that must be re-earned (like, what have you done for me LATELY?) while accumulated value accrued over time which continues to build and compound (think, "vital skill or competency") gets a base raise. It's parallel to typical executive bonus/incentive logic, where time-specific past results are rewarded via lump sums instantly amortized but sustained retention of the mission-critical skills (KSAs) or competencies has a compounded value, especially when it involves irreplaceable institutional memory.

Elegant, concise and operational...
Thanks, Ann!


I don't think that you have made it clear, at least to me, what you mean by potential to contribute. Do you mean base pay increases based on skills and competencies that will help organizations in the future? If so, are you an advocate of skill/competency-based pay?

P.S. I wish that I had your track record for accurate posts in my work.


This is great.

It does speak to the fact that in order to accurately evaluate the future value of our HR investments (the base salary if I understand the post)managers must have some idea of what skill sets will be needed in the future. This would then require that a company spend time and energy on more accurate scenario planning in order to determine the appropriate investment in their resource. No different than evaluating a software or a production machine that will be in service for 4, 5 or even 10 years.

How many managers - at any level in the organization - spend any time thinking about the HR needs 4, 5 or 10 years down the road? Too often it is about the resource needs 4, 5, 10 minutes into the future.

My question is how do we link this great thinking to performance evaluations, training, company vision, etc?

In my mind, any company that adopts this method of allocating resources would almost be FORCED to put more effort into future planning - something we'd all love to see I think.

Another question that grabs me is - what if the future is different than we think? What if the investment in the base salary becomes moot due to market changes unforeseen by the company? How do you manage someone who two years ago was extremely valuable based on the future view then - and now is less valuable? I think of programmers as an example - 10 years ago we probably wouldn't have thought those with HTML skills would be as valuable as they are today versus those that could code in mainframe languages.

Or am I missing the point?

Jim and Vita:

Thanks for affirmation of the direction - and for the comments.


I have, at least somewhat purposefully, left the concept "potential to contribute" undefined, at least specifically. As Paul notes in his thoughts above, I think it is up to the organization to articulate what this is, in line with its vision of the future. What I have in mind, though, is broader than what most of us traditionally think of as skill-based pay (i.e., you develop and get certified for skill X, and you get Y dollars...). I see "potential to contribute" to the organization over the longer-term something that includes mission-critical skills, but also encompasses a deeo personal commitment to growth and development, leadership potential, and other behaviors and attributes that are seen to be aligned with the culture and values key to driving the place forward.


Completely agreed - this does put the onus on the organization, and HR, to think strategically about future talent needs. In my mind, and per my response to Murray above, I think it goes beyond a specific set of hard skills (although it certainly includes that) to encompass the kind of "can do" attitude, behaviors and role modelship that the organization can depend on to help it navigate uncertainty and churn - beyond a specific functional discipline or skill set.

Make sense? Or am I leaving too much wiggle room in the concept to make it truly operational?

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