On Simple-Minded Pay Interventions in Complex Organizations

I confess to being fascinated by the parallels between the behavior of organisms and the behavior of organizations.  Have been ever since I read Meg Wheatley's Leadership and the New Science more than a decade ago, a book that forever changed the way I look at the world.

And so I was drawn to the analogy I found in an article on (of all things!) drug development in this past weekend's Wall Street Journal, Drugs That Are as Smart as Our Diseases,  where author Matt Ridley explores the bind faced by the pharmaceutical industry today.  In a nutshell, the industry is struggling enormously to develop productive drugs in an environment where natural selection is producing increasingly resistant disease strains and blockbuster drugs are losing their patent protection at an accelerating rate.

The problem, as Ridley states it:

Human biochemistry is supremely intricate and robust.  It resists cures that rely on deploying simple, targeted molecules.

What does this have to do with HR and compensation?  Well... I would submit that the dynamics of human performance in organizations are also supremely intricate and robust, yet we are forever prone to seek the quick, isolated solution - like, say, the lone incentive plan - to fix our performance challenges.

As Malcolm Young, CEO of the drug discovery firm e-Therapeutics so succinctly puts it: "There is no single soldier that we can shoot whose demise would significantly affect the performance of the army."  Can't the same really be said for single-minded talent interventions? Just as biochemical networks are designed to work around the loss of any one node or molecule, so our organizations have proven themselves uncannily capable of finding the workarounds for our simplistic pay interventions - throwing back in our faces those things we are fond of calling "unintended consequences."

There's a lot that we, as HR and compensation pros, can learn from science and the study of live organisms.  Can we absorb and apply these lessons?

Image courtesy of en.wikipedia.org

Comments

[Blair Johanson]

Ann,
This is an excellent blog entry and analogy between the human biochemistry and human psychiatry at it relates to single-minded talent and pay interventions in complex organizations. This is where pharmaceutical research scientists and compensation professionals are paid the big bucks for their artistic research and applications that generate the next level of workarounds that produce a major drug breakthrough or a new target for team productivity. Let's take it to the next level of targeted outcomes with non-simplistic but easy to understand total rewards compensation packages. We're still advocates for equitable employee base pay plans but with compensation dollars still tight, it is time to reward the productive employees that have an owner and customer-minded approach to their work contribution. Blair

[Ann Bares]

Blair:

Thanks for your thoughts. Are we paid the big bucks? Perhaps a comparative analysis between the pay of comp professionals and the pay of pharma research scientists is in order, given that we're working on analogous things...

[Desiree Porcaro, Ultimate Software]

Ann, thanks for the excellent post. Fairness and equity are words we often hear in the payroll software industry and the intersection of human behavior and compensation is such a fascinating subject. Technology can't solve problems around performance and motivation, but I believe that good software tools can remove the administrative burden around compensation/payroll and allow HR professionals to address the complex issues you describe in your blog post.