So how would you feel if everyone at your company knew your exact salary, and vice versa? Do you think the advantages would outweigh the disadvantages?
This has been a frequent topic in the press lately since companies like Buffer and SumAll have publicly endorsed the practice. Proponents of salary transparency argue that it has a number of benefits, including determining employees’ value to their company, scrutinizing inflated executive salaries and eliminating a salary gender gap.
In countries such as Sweden and Norway, where residents’ tax returns are available to the public, salary transparency seems as though it would have a shorter road to travel toward gaining acceptance. But in the U.S. and U.K., the thought of openly sharing one’s salary info still seems a little too personal. Read more…
Many “dumb questions” are voiced in response to management orders, so be charitable when you encounter an overly basic query from people who are supposed to know better.
For example, a question about Canadians being treated exactly like Americans for overtime purposes was raised a while ago in a LinkedIn professional discussion forum.
Since the two nations have very different laws governing overtime, the answer seemed simple. But it brought this private response: “Thanks Jim – My thoughts exactly, but I was asked to do the research.” Read more…
When and where do we create temporary incentive plans, meant to bridge a short-term gap in our reward offerings?
Let me lay out one particular (but not entirely uncommon) scenario.
Many organizations offer the opportunity for an annual cash profit sharing award to their employees, a way to share with them the financial success they help create for the business. Plans like this are popular in public and private companies alike.
In many cases, these plans come to occupy a revered place in the company’s culture and become a key feature in its employment brand, reinforcing the sense of an organization where everyone is rewarded for a winning year.
Until they don’t. Read more…
To what extent is your compensation program transparent to employees, or on the other hand, how much is kept a big secret?
Early in my career I worked for a very successful, decades-old manufacturing company who maintained the practice of posting their salary structures on the walls next to the punch clock machines. Every grade and salary range up to management positions was available for public viewing.
I was young and unseasoned, hadn’t been around much yet, so didn’t think much of the practice at the time — either way. It was just the way things were at that company. Read more…
There is this new, hip burger joint in Detroit called Moo Cluck Moo (all right, it’s a SmashBurger knock-off) which is becoming famous for paying its workers a minimum of $15 per hour.
OK, it’s not $43/hr, but the title was to prove a point and ask a question. If you haven’t eaten at one of these new burger joints, they’re great! I mean great, they’re great if you love a great burger, fries and shake and a “fast food” bill of $50 for a family of four!
BTW, the sweet potato fries at SmashBurger will be on my death row/final meal menu.
But really, how much should a fast food worker be paid? Is $15/hr really a living wage? Read more…
Pay for performance is a new concept in many countries.
Unlike the United States, some cultures consider it unacceptable to tell employees they are performing poorly. In these countries there is little variance in ratings, salary increases and bonuses. Performance ratings (if they exist at all), pay increases and bonuses are all pretty much the same.
Pay for performance, as we know it in the U.S., tends not to exist. Global companies need to understand the impact of these differences and search for ways to reconcile any conflicts.
Should every worker receive a living wage?
There are movements in many states to raise legislated minimum wages up to levels that will support American families. Examples abound in Washington state, Massachusetts and Missouri. The District of Columbia has also signaled that a living wage is necessary for Walmart, even as unions maneuver to avoid the issue.
Some businesses also claim to support “a Fair Minimum Wage.” That phrase bothers me, because it seems that fair always means “more.” I’ve only known one person who has ever argued that, “in order to be paid fairly, I should be paid less.” And he was supremely talented, if modest. Read more…
A lot of the debate surrounding pay for performance focuses on the degree to which differentating pay by an individual’s performance serves as an incentive, encouraging the employee to focus energy and attention on achieving the things necessary for the organization’s success.
In other words, do we get what we pay for?
What we overlook, however, is the more macro impact that performance pay can have on the overall composition of an employer’s workforce. Read more…
Is pay for performance — specifically that which we think of as “merit pay” — worth the hassle?
I recently ran across a research paper (Michael C. Sturman, Evaluating the Utility of Performance-Based Pay) that takes an interesting run at answering that question. (Hat tip to AonHewitt, who featured outtakes from the research in a recent presentation.)
One of the things I particularly appreciated in this research was the authors’ deliberate effort to examine the question by looking through the lens of economic value. Read more…
There is solid evidence from a number of major reviews of the research over 30 years that financial rewards can be expected to trigger improved performance.
That is widely accepted and a core practice in pay systems throughout the world.
And yet every so often a contrarian publishes a book or article and disciples respond. The most recent is Daniel Pink and his bestselling book Drive. The favorable reviews for the book, its sales and continuing references confirm his argument is credible to many.
Prior to Pink’s book, this was a heated but largely inconsequential academic debate. His book provides new ammunition to those who oppose pay for performance. However – and this is a key – they are relying on virtually non-existent evidence. Read more…