Editor's Note: This week's Thought Leader is Tom McMullen. As leader of Hay Group’s North American Reward Practice, accountable for innovation and thought leadership initiatives for the reward practice, Tom has been a significant contributor to our profession. He is a frequent speaker on reward and human resource issues and has authored a number of articles and publications including The Manager's Guide to Rewards.
Compensation Force: What led you to choose (or land in) a career featuring the field of rewards?
Tom McMullen: While in the process of finishing up my undergraduate degree in mathematics, I went to the University’s career placement office and applied for two job openings. One was to drive a truck for a paint company and the other was for an internship role in compensation at KFC’s corporate HR department. I was one of two finalists for the paint truck driver’s job, but didn’t get it. Luckily, I fared better at KFC. They primarily hired me because I knew some new PC-based application called Lotus 123 (nobody else in the department knew how to use it at the time). My first boss once told me “I’ve never met anyone who consciously chose a career in the compensation field. Most people stumble into it”. That was my case and I’ve been stumbling in it for over 25 years.
Compensation Force: What person and their ideas/teaching/writing has had a significant influence on your thinking and your work?
Tom McMullen: The people with the most influence on my work have been the diverse array of clients and colleagues I have worked with over the years. I came out of compensation roles in two different corporate compensation departments thinking that most reward programs followed a somewhat similar structure and logic and there was a general playbook in terms of what made reward programs effective. The core thing I’ve learned in the consulting business is that you need to provide for a decent level of freedom within a framework and be flexible in terms of how you help an organization strategize, design and execute reward programs. While there are clearly models, frameworks and “best practices” that can be utilized for an organization, the main thing is to appropriately diagnose the presenting issues and organization environment and to jointly develop solutions with the client that are workable and practical for the client.
Compensation Force: Is there a book you’d recommend to others in the reward field that has impacted your thinking and your work?
Tom McMullen: There are two that I really like. David Maister’s Trusted Advisor is a great read for anyone in a consulting role – whether it is in a corporate role or in a consulting firm. It speaks to some of the points I mentioned immediately above and provides great recommendations and a process on how an advisor can work with their clients to effectively diagnose the issues at hand and to frame a workable solution. The second one is a very good book on reward that came out two years ago by Steve Kerr (formerly Chief Learning Officer for Goldman Sachs and General Electric) called Reward Systems – Does Yours Measure Up? What I like about the book is its directness, brevity and its focus on three basic premises for success– clarifying what the organization means by performance, designing performance management systems that focus on both corporate performance drivers and employee development, and designing reward systems that balance the needs and wants of the organization and the needs and wants of employees.
Compensation Force: Looking to the future, what trend or development do you think will significantly impact the reward profession and those of us working in it?
Tom McMullen: This is perhaps the most interesting time to be a reward professional. I think the reward function is more strategic than it’s ever been, but it’s also a bit crazy because of all of the increased demands on the function without a commensurate increase in resourcing. I see a few dominant trends impacting the function. These include reward professionals having much more of a marketing and communications mindset than they needed in the past – required to implement reward strategies and designs that will be effective. Reward leaders will also be working more directly with line managers on making reward programs more effective, particularly in the area of total rewards (vs. solely compensation and benefits). And while there is clearly a trend in making reward programs more consistent globally relative to the organization’s business strategies, I also see reward segmentation strategies becoming more prevalent in terms of employee demographic differences in the workforce, particularly in terms of where employees are in their stage of career.
Compensation Force: What are you currently working on?
Tom McMullen: A lot client work. The HR consulting business was obviously impacted by a challenging economy the past couple of years, but there is significant reward consulting activity happening these days for us – particularly in the areas of organizations rethinking their reward and performance management programs given the “new normal” and needing to balance cost effective reward programs with programs that engage employees and better align with changing business strategies. We’re doing a lot of work with clients in reward effectiveness audits, variable pay programs, helping clients get improved consistency in their reward programs and building reward programs that better align with employee needs and preferences. We also recently completed an interesting piece of global research called The Changing Face of Reward which summarizes the future direction of reward programs from the perspective of 230 global reward leaders.
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Our special thanks to Tom for participating in the Compensation Force Thought Leader series and taking the time to share some of his history, thoughts and ideas with us today!
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