The thornier the pay problem, the more you need to be forward thinking in your process to resolve it. This is because big pay problems really present you with a set of parallel objectives:
- Resolve the pay problem.
- Create conditions maximizing the odds your pay resolution will be understood and accepted.
I think the enemy here is our own inclination to pursue these things in a linear rather than parallel way. First create a solution to the pay problem; then figure out how to get people to understand and accept your solution. But if we wait until the problem is solved before thinking about how to sell the solution, chances are good we've already doomed our effort.
Take the case of an organization with a legacy incentive plan that no longer fits the company's needs and situation. Let's say that the plan, in place for a number of years, has a history of handsome payouts and is generally well-liked by employees. Which of the following approaches would you favor for addressing the problem?
Approach #1: A team of internal HR and compensation professionals convenes to review the plan against current business direction and needs. The team works together to create a new plan design that better reflects current business strategy. After the new plan design is approved by senior management, the team is charged with developing a communication and implementation plan. They enlist help from the marketing and public relations department to brand the new program and develop an internal communication plan.
Approach #2: A team of internal HR and compensation professionals convenes to review the plan against current business direction and needs. Realizing the importance of employee understanding and acceptance of any changes, and noting the obstacles they face in this regard, they devise a plan and process for proceeding that features input and participation by key employee and line manager groups. They secure approval to extend the project timeline in order to accomodate the involvement of these groups. The final approved plan design has the buy-in and support of a sizeable contingent of employees and managers, a number of whom directly participate in developing and executing the communication plan.
Our instincts seem to draw us to processes like that outlined in #1 above, perhaps because they are neat, clean, time efficient and controllable. And perhaps because they mirror the linear way in which we tend to approach pay problems. It takes significant effort and energy to shepherd an organization through the messiness of a #2 process, and senior management teams are often reluctant to green light the time and resources such an effort requires.
But if I had to put my money on the results of one process or the other, I'd bet on #2.
What about you?
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