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Dancing in the Dark: Moving Compensation Practices into the Light

Humareso Blog Posts-8

Where is value placed? Relationships. There you go. That’s the end of the story. But wait. I can’t pay my bills with relational currency. I’ve tried. The mortgage lender sent me a letter saying as such.

When a group of retirees all descend upon their dream community in India, they are met with the stark reality that money does make a difference despite the beauty of relationships developed. If you’ve not seen The Best Exotic Marigold Hotel, it’s a sleeper hit with an enviable ensemble cast. These retirees find themselves a bit underwhelmed, to say the least, with the state of the hotel and its manager. And while the characters develop a bond over their new surroundings, they are met with the reality that the hotel needs better fiscal management and investment. Despite how much personal growth each experienced in their unfolding relationships, they could not ignore the money matters at hand.

Our staff may find themselves in an analogous situation. In the past ten days, there have been no less than six different companies chatting with me about compensation benchmarking and pay equity analyses. The tension is there to affirm the appreciation of those investing in the organization’s success while trying to maintain financial stability and responsibility. If there’s only so much money coming in, as much as a company would want to give more to the individuals responsible for the growth, they will find themselves constrained to keep the purse strings tightly closed.

If you’re going to address this tension, the first and smartest step is to have the due diligence done to affirm compensation ranges and to develop a compensation philosophy. These areas will serve as the foundation to the approach-to-money building that’s being built. Without it, decisions around raises, bonuses, expansion, adding staff, etc., will all be arbitrary and capricious. Will it be based upon who we like best? Who has the loudest mouth? The categories are not based upon an equitable approach, but rather, one where power is unequally or unfairly distributed.

Bring in the experts to get these baseline pieces done. Once that happens, you now have a roadmap for compensation ranges for roles, levels in positions and staff budgeting. And this is where you may need to be thoughtful about other types of compensation if liquidity is tight. Areas of stock/shares ownership may be an alternative opportunity to allow others to be affirmed in their work without recognition being based purely upon a paycheck. What about other areas of benefits? Look at what you may already have access to and better utilize their offering.

As these approaches unfold, keep asking people about their experience with value within the organization. Ask how they perceive affirmation and recognition. Get a sense from the staff as to what chats are happening regarding compensation expectations. You may be surprised to see how much your team understands finances. Too often, we think “they don’t get it” without ever having asked them. Don’t assume. Ask.

Then get ready to share with your teams. They operate in the dark too much. It’s okay to say, “This is where we are. These are the reliable and verifiably researched ranges for the duties and responsibilities of the work being performed for each role. We use these ranges to ensure respectful pay and competitive consideration.”

It's worth mentioning that you may lose people along the way. Expenses have to be met for individual contributors. They will have to take their efforts elsewhere if the finances can’t support them. And while that may be painful, it is also something that smaller companies have dealt with for decades. The pool of resources is limited so if that person wants more, they’ll have to go for a bigger company and all that comes with that.

Affirmation of value through both relational recognition and compensation approaches are the responsibility of an organization. Gather the resources needed to get started. As Evelyn Greenslade (Judi Dench) says in The Best Exotic Marigold Hotel, “We get up in the morning, we do our best.” That’s it. That’s what we do and that’s not so bad.


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