First, that phrase for this post — “I’m just sayin’,” drives me nuts. I hate it. Now that I feel better for sharing…
A diversity consulting firm called The Novations Group, apparently surveyed a couple thousand managers, and concluded that senior managers were poor communicators. For this, they seem to want acclaim… (more…)
Investment in training is growing faster than any other human capital or HR-related expenditure. That’s according to Mercer, a ridiculously large consulting firm connected to Marsh.
Their recent survey showed that 51% of profitable firms (there’s a criteria for you) were planning on increasing their investment in Leadership and Career development in 2008. That’s more than for cash-incentives, base salary increases, and even health care.
If you’ve been waiting for leadership development to become really popular; to make the investment decision a near no-brainer, then now’s the time. In other words, everyone is doing it. (more…)
Someone recently asked me to give them a general overview of incentives. Never-mind the cliff-notes request format, we simply over-complicate this stuff.
Understanding incentive compensation is simple, and is largely human nature:
1. That which is rewarded is repeated,
2. You don’t get what you want, hope for, manage to, or request — you get what you pay for (as a tenet of compensation, not necessarily a life philosophy), and
3. Simplicity wins.
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That’s right, just say “no” to “yes…” “Yes men,” that is. And don’t give me any grief about my use of gender. “Yes men” come in all shapes, sizes, genders, and flavors. And are frequently disguised – quite well – as competent managers.
They aren’t.
During my first VP-level job (seems like a while ago…), I worked with a chief executive who made it quite clear to me: “If you and I always agree, then one of us is unnecessary, and I’m keeping my job!”
As it should be. As leaders, we need divergent thinkers around us to test and validate our ideas, plans, reasoning… our own thinking. What we don’t need is a gaggle of grown-up wannabe’s chiming “great idea, boss” like a parrot in a cage hoping to get a sunflower seed.
They give us momentary gratification (let’s face it, we do like it when we’re right), but longer term disaster.
Force your staff to think, to challenge you (wisely and professionally, of course) as you should be doing with them. Refuse to accept instant agreement without solid reasoning; ask for an explanation on “why” someone thinks you are right.
Then, sit back and listen…
Our folks make mistakes.
I know, that’s heresy, but it’s still true. We make mistakes all the time, we can only assume that the people working for us do as well.
So, when they do make that mistake, what do we do? Whack ’em immediately? Beat ’em up about it? Public humiliation?
How about, “Complete unequivocal support.”
WHAT??? You say…?
So, I have had several emails asking about executive compensation in smaller companies. Apparently, some can see the detail in larger companies, but believe that the issues are fundamentally different in smaller and mid-market firms.
You probably don’t want to hear this, but base compensation is what it is, and should be close-to-comparable for a given accountability. Regardless, for the most part, of company size. Incentives and perquisites vary, of course, but again, base compensation simply is what it is.
Smaller private companies have long faced these issues regarding competition for executive talent, particularly w/ compensation. Fortunately, many public firms are beginning to curtail their biggest draw — equity options — since FAS 123Rnow requires that they expense them. So, don’t just throw up your hands.
Realize that the way to deal with executive compensation is via a well-thought plan, not simply a “base plus bonus” scheme. What do the investors/owners want from the company? Increased shareholder equity?? Relative stability?? Cash flow?? Net operating income?? Identify this first, since it will be your critical metric. Every plan starts with a purpose.
The key to keeping execs on target is a well-designed executive compensation plan.
On average, about 50% of a private CEO’s compensation is determined by how well his/her company performs within the chosen metric(s). The rest of the senior staff should still be north of 30%.
Consider, in addition to metric-based incentives:
** Modified gainsharing or goalsharing (for management)
** Deferred compensation (unfunded)
** Increased vacation/PTO
** Reimbursements for clubs, exercise facilities, etc.
** Conference attendance, with spouse allowance
There’s a ton more to do. Approach the effort holistically – you can’t get there with just a “base-bonus” philosophy.
Hope that helps some…
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