The role of business leadership in compensation management

by on June 16, 2009 · 0 Comment POSTED IN: HR Info Center

Have your managers look beyond a paycheck with compensation management

Compensation management studies show there are a lot of people not satisfied with their job. Even before the financial meltdown in 2008 in October, people were really not satisfied with their job. Obviously, these percentages are going to vary from one organization to the next, but overall about 50% of the employees are dissatisfied with their jobs.

What employees aren’t satisfied with in traditional compensation management?
They are least satisfied with things like bonus or incentive programs, promotions, health plans and pensions. Sixty-seven percent think their bosses are strong leaders, however, 60% do not feel motivated to achieve their company’s goals and 25% are just showing up to collect the paycheck.

Literally, 25% are just showing up to collect the paycheck. Not a ringing endorsement of employers of these days. Both management research and opinion studies show managers are considered the employers. So, a lot of the way they feel, I think, can be directly related back to the managers.

So how an employee feels about the company can attribute to how the employee interacts with their manager and the manager’s general management style. Managers can be tough and demanding. Employees don’t necessarily have a problem with this as long as the manager is fair and consistent with their dealings with them. So anything you can do in the management training area, again, I think could take some pressure off of the compensation management area, the cash compensation or stock compensation areas.

An alternative view of compensation management
Now, they’ve actually done surveys on good managers and asked them what do they do differently than other managers. And these are the things that they found. Again, it all speaks to management treating which maybe we’re spending some time and effort on in the coming year.

They select the right people in the first place. They demonstrate respect for the employee, offer feedback. They help them balance work and life. Involve employees in decisions. They celebrate successes. Staff adequately so there’s not a lot of overtime for people. Some people don’t like overtime.

And they provide opportunity – whether it’s paid or not. And generally it if it’s not paid, they really don’t care for overtime too much. Provide opportunities for cross-training, career progression, et cetera. And communicate all the goals, roles and responsibilities.

Most companies don’t do a real good job in this area. I think it’s worth it because my view of compensation management is an expanded kind of definition. I think it’s worth spending some time here as well.

Edited remarks from the Rapid Learning Institute webinar: How to Set up Fair and Effective Pay Plans in an Uncertain Economy by Rick Olivieri

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