Are You a Compensation Arsonist?

Stop. Take a quick evaluation of the fires you are currently trying to put out. Do any of the following sound familiar? Unplanned succession planning? Short-term incentive plan that doesn’t align well with recent company performance? An equity plan that is undervalued by participants or running out of shares? Market pricing that your talent acquisition team claims is off-target? Pay levels and execution that do not match your compensation philosophy (or vice versa)? Your list may differ, but I know you have a list.

Now be honest. How many of these fires started with you? In some cases, you may have been the spark or firecracker that ignited the flames. In other circumstances, you may not have cleaned up the dry tinder. Let’s face it, it is more exciting, and we feel more essential when we are putting out the fires. Holding the hose and having people thank you for being heroic can feel good. It seems like no one truly appreciates the fire department when there aren’t any fires.

I’m here to tell you that it’s OK not be appreciated. The people who write OSHA fire safety rules are virtually unknown. The fire inspectors who come through to make sure those OSHA rules are followed are often viewed as an annoyance.

Who wants to be invisible or annoying? You do.

There will always be unfortunate surprises, even when you create great rules and enforce them gently and effectively. The difference will be how well you respond. If you are busy dealing with the problems you created for yourself, you may not have the bandwidth to help others with the urgent issues they bring to you. Even more importantly, when you’re busy, it’s hard to help others prevent new fires.

During the next four-months each time you solve an issue, put in place a set of rules and processes to help reduce the chance of something similar happening in the future. If you aren’t sure what to do, buddy up with a colleague from a different company and become each other’s “fire inspector.” The extra work won’t be fun, and you probably won’t have any time to do it, but do it anyway.

Next year as summer ends and compensation planning season gets rolling in earnest, you will find far less fires and far more happy executives, managers, and employees. And, you may even get to take some time off while the weather is warm!

P.S. I wrote the draft for this post long before the recent fires broke out across the country and I questioned even posting it today. But, I think it’s an important reminder that the “fires”, and other disasters of the world of compensation are inconsequential when measured against real disasters. If you have a chance to help someone impacted by a recent fire, hurricane or flood, please do that instead of working on new pay rules and procedures.

Dan Walter, CECP, CEP is the President and CEO of Performensation. He is passionately committed to aligning pay with company strategy and culture and considered a leading expert on equity compensation issues. Dan has written several industry resources including a recent Performance-Based Equity Compensation issue brief. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”“Equity Alternatives” and other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation.

This post originally appeared on Compensation Cafe
Author: Dan Walter-Performensation