Show Me the Money
SteveLast night on the HR Happy Hour show we took on the always interesting, sometimes controversial, and seemingly universal subject of Compensation, or put more simply - money.
Now I know that compensation is not just about cash, that the total value that an employee receives from their employer is a complex mixture of cash, benefits, development, opportunity, and probably a million other things.
Or maybe it is really just about the cash.
That is in a way why the subject, and to some extent the show reflected this, can be so frustrating.
Compensation seems much of the time a 'Me vs. Them' kind of struggle, the little guy employee fighting for his or her fair piece of the pie, against the faceless corporate monolith bent on sharing as little as possible, all the while funding exorbitant executive comp packages. For some reason the value in the exchange always seems tipped in favor of the employer, that cash, benefits and perks always seem to be perceived as having more worth than the employee's time, attention, dedication, and commitment.
Whenever the conversation turns to compensation, there is bound to be some discomfort. Whether it is a deal to buy a car, sell software, or negotiate a salary and benefits package, there are some people that will feel uneasy, mostly due to an imbalance of information and power.
The newest new hire does not know what kind of a deal the last person in their situation was able to swing, so they often go in blind. The 'man' has the information, the leverage, and the ability to, for the most part, to control the deal.
Don't like what is being offered? Ok, walk away then, and good luck.
Oh, and by the way, the outgoing CEO just walked away with a $25 million package.
We did not have time to really solve any of these issues on the 'Show Me the Money' show, and I wonder if we talked for another few hours if we really could have.
But it was, and remains a fascinating topic, and one that will never be completely solved as long as corporations and individuals exchange time and effort for compensation.
Have a listen to the show, and let me know what you think.
Why are these issues so complex, sensitive, and enduring?
Can we ever just be honest and open about compensation and with each other?
Reader Comments (4)
It was an interesting show Steve.... I listened, lurked and enjoyed.
I think the issue with compensation surfaced near the end. The issue is the inability to definitively identify the exchange equation. What is a job "worth?" What is that task "worth?"
Each of us feels our work is valuable - in many cases more valuable than someone else's contribution. I know all of us have had the discussion that "sales is easy - why do they get paid so much? If it wasn't for marketing they'd have no one to talk to. If it wasn't for product development they'd have nothing to sell."
The exchange of effort for money is muddy in its finest form and completely opaque in its worst.
Add to the problem that most managers don't have a clue what they really want other than compliance you have a real quagmire. Secrecy in compensation allows management to play around and hide the fact that they really haven't identified the behaviors and outcomes they really want and need. Keeping that under wraps gives them the ability to make it up depending on who's complaining or not complaining.
As long as there are no good definitions - there won't be real agreement and understanding.
Missed the show, Steve, but I think the nut of the problem is, as you mention, the imbalance in information and power. Well, I hope somebody mentioned the free service at Salary.com (and perhaps at PayScale, as well) which offers applicants a small piece of the salary surveys that nearly every company buys. Sometimes from these companies.
Obviously there's the question of what you are worth, but there is the larger question of what the company thinks the position is worth. And that's what they'll tell you -- for free!
Enlightened and large-scale labor management negotiations sometimes involve the company opening its books -- usually when they contend they have no money to meet labor's demands. Most companies won't even tell you the salary range of the position, even though it's written down in their comp plan.
Though I negotiate every day of my life, I don't think myself good at it. Because the only way to be good is having the willingness to walk away from whatever you're hondling over. And most of the time, that's really hard. Best thing is to have a competing offer and beat them up with it! I know that's considered really bad applicant etiquette, but the alternative most of the time is getting screwed.
Steve- sounds like I missed a great show! had I been on would have said- this is one of the many reasons why I love sales- one of the few careers where compensation is an open book and pay for performance is crystal clear!- Carry on HR Happy Hour!
@Paul - Excellent points as usual - I know as an incentives expert this show was in your zone. I like your points about secrecy as an enabler of poor or ineffective management.
@Bill - I am with you, I am terrible at negotiating as well. I need an agent or something,
@Debbie - Great points about sales and transparency. Thanks!