Editor's Note: This week's Thought Leader is Frank Wagner, Director of Compensation for Google. Frank has managed the function since he joined the company in 2007. Prior to Google, Frank was a principal and compensation consultant at Hewitt Associates for over 20 years, where he specialized in both executive and broad-based employee compensation. Frank has a BS in Business Administration with Highest Honors, and a MBA in Finance from the University of California, Berkeley. I had the opportunity to participate in a panel on pay for performance with Frank as part of the recent HRIQ event Post-Recession Compensation & Rewards Strategies; I greatly enjoyed the chance to hear about some of the creative reward initiatives he has led at Google, and appreciate his willingness to share his background and thoughts with us as part of this series.
Compensation Force: What led you to choose (or land in) a career featuring the field of rewards?
Frank Wagner: Like most everyone else, I just fell into it.
My first job was as a Financial Analyst at Northrop Corporation, and after two years, it seemed very repetitive. I did some work with the Compensation Department and it thought it was interesting - it was quantitative, but also had a direct impact on people. I had the chance to join Jerry Wajda and Art Handy (who were both involved in leadership roles for the American Compensation Association in the 1970's) when they started the Handy and Wajda Consulting Group, as its "numbers guy." In addition to the subject matter, I was attracted to the variety of consulting, which I also enjoyed during my 20+ year stint with Hewitt Associates.
Compensation Force: What person and their ideas/teaching/writing has had a significant influence on your thinking and your work?
Frank Wagner: Jerry Wajda was my first mentor in the field. He had some very creative ideas on pay for performance at a time when merit increase differentials between different levels of performance were typically very small. And, he always wanted to analyze and identify "meta-patterns" and trends in survey and employee pay data.
Also, Margaret Bentson, my manager for my first 5 years at Hewitt, influenced me a lot. She taught me that a lot of the approval and success of a new compensation program is often due primarily to communications, "process expertise" and influencing skills, and not necessarily expert compensation design.
There were other colleagues at Hewitt from whom I learned, like Claude Kordus, who was an early proponent of EVA-based concepts in executive incentive plan design (such as using a discounted cash flow [CFROI] concept for the present value of a business).
Compensation Force: Is there a book you’d recommend to others in the reward field that has impacted your thinking and your work?
Frank Wagner: I think most business books are pretty boring! However, I thought Daniel Pink's recent book Drive was very thought provoking, even I don't agree with many of its conclusions.
When I first started in compensation, I did benefit from reading an early edition of The Handbook of Wage and Salary Administration by Milton Rock of the Hay Group. Although the field has evolved a lot since its publication, you couldn't beat it (back then) as a comprehensive primer of the nuts and bolts of compensation.
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?
Frank Wagner: I wonder if the transfer of risk from companies to employees with the greater variability of pay (base salary to variable pay, DB to DC pension plans, etc.) has gone too far. I think that the pendulum may swing back in the other direction....
Also, as the globalization of business continues, I wonder: how pay levels will harmonize across countries, and at what pace?
Compensation Force: What are you currently working on?
Frank Wagner: Google is always changing!
We've recently implemented our large salary increases based on the findings of the conjoint study we conducted on the perceived value of various pay elements. We're now looking into other tweaks to our base salary, bonus and equity programs as well.
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Our special thanks to Frank 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!
Is there someone you'd like to see featured in a future Thought Leader interview? Send me your suggestion [email protected]
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