Compensation Force

Has Your Pay Program Been Infected by Senioritis?

One of the tasks we face in the universe of pay administration is matching a job to compensation surveys, in order to establish its competitive value, is ascertaining the appropriate "level".  Is it an Engineer 1, 2, 3 or 4?  A Graphics Designer Senior or a Graphics Designer Intermediate?

Being involved in some of these deliberations with my clients and seeing a lot of survey data over the years, I've become aware of an interesting trend.  At one time in these survey databases, there was something more closely approximating a bell curve at play.  The majority of incumbents in a job family were in the middle or intermediate level, with a few sitting above and below this in the entry and senior levels.  These days, things look different.  Although the level definitions in most surveys have not changed, we find that the number of employees pegged at the senior level rivals - and often surpasses - those at the intermediate level.  The entry or beginning levels in many of these same surveys have all but disappeared, probably due to neglect.

What's behind the epidemic of senioritis?  Is this yet another manifestation of grade creep?  What's going on behind the scenes here?

Is it another entitlement issue, a reflection of a generation of employees who expect to walk in the door with no credentials and immediately assume the responsibilities of a seasoned (intermediate) Accountant, be promoted to Senior Accountant six months later and be considered for the CFO's spot after 2 years?

Is it a case of managers trying to do the best they can by employees, particularly when salary increase funds are less available, by revising their job descriptions in the hopes of using an "upgrade" as a mechanism to deliver more base pay dollars?

Or is the learning and development curve undergoing such radical change that employees are being asked to take on more complex responsibilities and more decision-making at a faster pace than in years past?

My take?  All of the above, I think.

The entitlement thing is there, for sure, rearing its petulant head and turning traditional career development norms as well as internal job relationships on their heads.  And managers have been attempting compensation program work-arounds since the dawn of time - some for admirable reasons, others not.

But I am also seeing more organizations - often newer and more entrepreneurial employers - who are genuinely pushing the envelope byplacing people into roles and asking them to take on accountabilities way beyond their years and credentials.  And then facing the decision about the right way to compensate these individuals for these accelerated career trajectories.

The key, I think, is to arrive at an honest assessment of your organization's particular staffing policy and then positioning your reward program (particularly salary management practices) accordingly.  I realize that this, in itself, can be a tall order; there are plenty of employers paying lip service to Scenario 3 (accelerated careers and roles) who are simply in denial about and unwilling to deal with Scenarios 1 (entitlement) and 2 (pay program manipulation).

How many of you are seeing evidence of senioritis in your organizations?  How are you addressing it?

Creative Commons image Infections by elenariverbendrvpark

What About Performance Transparency?

I find it interesting that in an age where we increasingly prioritize pay transparency we are also issuing passionate calls to do away with performance reviews and ratings.

Does anyone else see the irony here?

I have encountered few organizations whose leadership has committed to a talent strategy involving identical investments in all employees regardless of how well they perform and regardless of the commitment they demonstrate to development and improvement in their roles.  They want and expect differentiation.  How does the organization get there without performance evaluation?

Dr. Steven Hunt, in an article a few years back titled Why High Performers Really Like Performance reviews, shares an inconvenient truth:  Organizations don't get there without performance evaluation.  As he says...

Companies that claim to be eliminating performance evaluations are usually just hiding the evaluation process from the employees.

From what I've observed while working with organizations who've gone "ratingless" and what I've read about those who've made news for taking the bold step of eliminating ratings, I think Dr. Hunt's assessment hits pretty close to the mark.  These organization  do not treat everyone the same.  They do make differentiated investments across employees -- in base salary increases, in bonus awards, in development and promotional decisions, etc.  These differentiated investments are based on somebody, somewhere making a summary judgment about the employee's performance and potential.  It's just that those judgments happen outside the realm of a formal performance management process in a manner that is often discretionary and opaque -- and without the use of descriptive labels.

In other words and to summarize, many of us are pushing for transparency and clarity in pay decisions at the same time we are seeking to back-room the judgments used to inform those pay decisions.

How two-faced are we?  Do we see the incongruity?

In an earlier article, Performance Management: We Won't Fix the Problem by Ignoring It, Dr. Hunt calls our attention to the two essential tasks that have traditionally formed the core of performance management:

1. Classification — Assessing employee performance to support decisions about where to invest scarce resources such as pay, promotions, or limited development opportunities (e.g. job assignments, expensive training courses).
2. Development — Assessing employee performance to provide feedback and coaching that will increase employee engagement, performance and career growth.

Classification, of course, is the more difficult of these tasks because it forces us to deal with the reality that some employees perform at a higher level than others. 

It is easy to understand the temptation to yank classification out of the process and focus exclusively on the more pleasant and affirming development element.  To completely avoid the stressful, difficult and potentially emotional context of a classification conversation.  Except that there is a fundamental dishonesty that happens when you make and act on tough judgments without ever clearly owning them or sharing them with the affected employees. 

Transparency and clarity?  Not so much.  Courageous and bold?  Not sure I see it that way.

Bottom line, conducting performance appraisals in an honest, transparent and -- yes -- appropriately humane manner is tough and uncomfortable.  Really tough and uncomfortable.  But it many be those organizations and leaders who step up to the plate and do the very difficult work of getting this right who create organizations that truly thrive.

Image "Business Hide Confuse Emotion" courtesy of pakorn/FreeDigitalPhotos.net