The tooth fairy does not exist in compensation policy

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

Talk to employee like adults about compensation policy

What we’re going to talk about here is a basic approach to how do you talk to your employees about compensation policy. We want to evolve from a parent to child kind of discussion to one where you are talking to them at an equal type level.

If you remember transactional analysis from the ’60s and ’70s, the whole notion was parents can talk to children. It’s a downward arrow going from P to C. Parent talking down to children. Children talking up to parents. C to P.

Now, what they taught us that was so wise way back when, when this was the rage was that adults talked to adults, parents don’t talk to adults, children don’t to adults, only adults talked to adults.

What we’re trying to do is change the tone and tenor of a conversation about compensation policy, make it straightforward and fair. If we can learn to do that, there’s no more Santa Claus, no more Easter Bunny, no more Tooth Fairy references in order to have to explain how things work.

The root of many of our problems and the problem is rooted in a mythology of pay for performance. I’m using this terminology very specifically here to apply to conversations about base salary. Bonuses are a different matter. We’ll talk about them later, but when you say that we’re a pay for performance company and you’re talking about base salaries, we would say that you were engaging in what I’m going to call the big lie.

The big lie in compensation policy
Now, the big lie in compensation policy goes like this, if you work hard and you do well, I’ll give you a good rating and you’ll get a big increase. Now, that’s a lie.

In reality, you don’t pay for performance in base salaries. In reality, you can’t pay for performance with base salaries. And in reality, you really don’t even want to.

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