Horizon Point Consulting

Author: Mary Ila Ward

  • The Conundrum of Incentive Pay

    The Conundrum of Incentive Pay

    I know of two people who have left their job in the last year because they felt like they were slighted when it came to how their company handled incentive pay.  Both of them- one working for a global behemoth of a company and one working for a family start-up- were promised things when it came to incentive compensation and then the rules were changed on them in the middle of the game, thus slighting them in pay they felt they were entitled to.

    And I can think of one company owner who is a friend that has tried and tried to come up with an incentive plan for her business development people that works, only to come out with frustrating results in that the intent didn’t drive the desired outcome.  In some cases, it drove the exact opposite.

    Incentive compensation is tough.  It’s why many companies avoid it all together. But I can’t give up on the fact that tying at least part of pay to outcomes and results that contribute to a company’s bottom-line, and the hard workers pocket all at once, aren’t a good thing.

    Here are some things that stand in order to do incentive pay well:

    1. Align any incentive plan with your company values that drive everyday behaviors. This should dictate that an incentive to perform is not an incentive to cheat. Be like Southwest Airlines, not Wells Fargo.
    2. Combine incentives programs with overall social recognition that includes monetary and non-monetary rewards for a job well done. As a Globoforce blog post states:

    In 2012, Aberdeen surveyed more than 300 sales organizations to understand how best-in-class organizations motivate their sales staff. Recognition for a ‘job well done’ scored higher than any other non-cash incentives, including competitions, learning & development, and team-based financial compensation. Further, Aberdeen found that best-in-class companies are more likely to indicate that internal recognition for positive performance results is a vital motivator for sales success.

                            And this-

    “Just remember that your sales people are human, too, and crave recognition and appreciation beyond the basic comp plan.”

    1. DWYSYWD- Do what you say you will do. This means if you say you are going to pay x amount out for doing or achieving y, then do it.  If you screwed up and didn’t figure out beforehand how this affects your bottom-line, its your fault not your employees’.  Of course, this should be tempered with stating that incentive compensation structures are not indefinite in nature, because markets and situations change.  However, when you communicate a plan to your employees you should let them know when this structure “expires” so to speak or is subject to review and changes (most likely on an annual basis) to be clear on expectations of payouts.

    Like this post?  You may also like:

    Corporate Recruitment Incentive Programs from Fistful of Talent

    Meaningless Core Values – A Dangerous Liability

  • 4 Reasons Why Job Hopping is a Good Thing

    4 Reasons Why Job Hopping is a Good Thing

    In my first gig out of college as a corporate recruiter, I had responsibility for the grind of hiring classes of customer service reps. Volume recruiting at its finest.   When I was trained by a co-worker on the company’s process for screening applicants, my fellow team member told me that the process used to include screening people out who were “job hoppers”- those that shown through their resume- couldn’t seem to stay at one job for more than a year or two at a time.

    Then the lawyers got involved and told us we couldn’t screen people out for that.  I understood both sides.  On the view of screening those job hoppers out, the company invested a substantial amount of time in training quality customer service reps. If someone had been shown to not stay with a place for longer than a year or two through their past behavior, (and past behavior predicts future performance had been drilled into my head from an interviewing and screening perspective) the company was making bad decisions hiring those that might not even stay through the entire training period.   And, although rule follower I am not, I could see why the lawyers told us not to.  Whisper potential adverse impact and you cut it out.

    But now I see another reason why screening people based on their “job hopping” isn’t a best practice.   In today’s workplace, average length of service is declining, hovering at less than five years for all workers. People change jobs quite often, and often for advancement and career growth reasons.

    Now when I look at someone’s resume and see they have been in the same job for more than 8-10 years, I am more inclined to think, what is wrong with you?  Why have you moved up, done more, gained more experience?

    A quote I saw on LinkedIn a couple of days ago said something along the lines of,  “What we used to call job hopping is now called career experimentation.”

    Whether you think the wording is all bull or not, there some potential advantages to hiring a job hopper:

    1. Diversity of experiences, which could lead to an ability to innovate and to contribute in a way that the company may not have thought of before.
    2. Indication of motivation and drive. Because many people job hop in order to advance in pay and/or responsibility, job hopping could show a greater level of drive than someone who is content to stay in one role at one company.
    3. Ability to find cultural fit. Because job hoppers have seen different work environments, they are better able to compare and contrast environments to know what environments are the best fit for them and seek out those environments and opportunities.
    4. A social capital advantage. People who have worked at a variety of places are bound to know more people.  And as social capital replaces human capital (who you know and what they collectively know as opposed to just what you know) as the biggest asset an employee can provide, having those who are well networked on your team can lead to better outcomes.

    As an employer, you’ve got to weigh your opportunity cost as to what a job hopper may bring to your table.   Considering the amount of time and training it takes for them to be a contributing member of your team, not to mention recruitment/replacement costs for particular roles, verses the above advantages is worth the analysis.

    Do you love or hate job hoppers?

     

    Like this post? You may also like:

    Millennials Stop Apologizing for your Job Hopping

  • The Best Way to Show Your Employees the Love on Valentines Day- And Every Day

    The Best Way to Show Your Employees the Love on Valentines Day- And Every Day

    Ahh, Valentine’s Day. The day of love and all things chocolate. Is it a special day for you at the office or just another work day? I hope you place a special emphasis today, and really any working day for that matter, on loving your employees and coworkers in the agape love kind of way. That servant leadership kind of love (not the sappy romantic kind that could lead to a sexual harassment complaint) that helps you achieve positive organizational results.

    As I think about the best way to show employees love, I’m reminded of the high of my work week last week. Well maybe it was my 2nd high given that I spent two days in sunny and warm San Diego for work last week, but I digress….

    We’ve been working with a fabulous company to help them form company values and then drive all of their talent management initiatives out of these values.  Well last week, I got to watch the owner give out two of the first three values awards from the company. We found out from the award recipients’ managers and themselves what their favorite things are, and each value award was customized to that individual.   One girl, on top of several things she got for award, got the biggest jar of pickles the owner of the company could find.  Pickle lover she is.

    Watching the smiles on the faces of both the giver and receivers of this was divine. After they received the award, I watched one shuffle through his loot and mumble to himself softly, “Man this is great.”

    The price tag on the gifts wasn’t much but here are the things that stood out to matter:

    1. Find out what the person likes and give it.
    2. The giver matters. What added so much value to the personalized gifts was that the company owner picked them out (I offered to, but he wanted to) and drove over two hours to deliver both of them.
    3. Both 1 and 2 emphasize that giving of your time matters. It takes longer to personalize gifts and it takes time to personally deliver gifts.  Both of these facts may offer more meaning than the gift itself.
    4. The gift should connect or speak to some deeper meaning. In this case, the gifts spoke to these employees’ performance related to the core values of the company. They weren’t being given gifts just because (although I think just because gifts are also needed at times), they were being given gifts because they model the performance that drives company success. And that is appreciated.

    So whether you are giving gifts to your employees today or to your significant other, make sure the gift actually shows your agape love by taking the time to personalize it in a way that makes an impact. You never know, performance might increase in your relationship because you do…

    Which brings me back to my San Diego work trip.  Maybe I didn’t digress earlier. My husband went with me, and although he isn’t prone to like fancy dinners (he was most excited about a trip to In and Out Burger- his Milo’s of the west Coast) this the view is where he took me for our early Valentine’s dinner on the trip. Personalization at it’s finest.

    IMG_0577

     

    If you like this most, you might also like

    The Best Way to Thank Employees Is to Make it Personal

  • What the Legislative Landscape Means for Day-to-Day HR

    What the Legislative Landscape Means for Day-to-Day HR

    I had the opportunity to spend time at a SHRM Regional Business Meeting this past weekend.  The best speaker I heard was SHRM’s VP of Governmental Affairs, Mike Aitken.  And I don’t even like hearing about legal issues! If you are in the Southeast, he is coming to Montgomery, Alabama to speak at the ALSHRM Legislative Conference this week- February 16th.  Register here if you want to go; I would highly encourage it.

    He covered how the current legislative landscape will most likely affect HR day-to-day. Here’s a recap of what he said:

    1. Immigration
    • Increased I-9 scrutiny. Make sure you are using the new form and diligently keeping and protecting the documentation.  Be ready for an audit.
    • Increased focus on employment based visa process. Here’s a good article that speculates on what all this will mean.  https://www.law360.com/articles/880762/employment-based-immigration-and-trump-what-to-expect The main thing I took away is that HB-1 visas will likely see an increase in salary requirements to obtain.  If you rely heavily on foreign-based workers to fill in demand jobs, this could really affect how you conduct hiring.
    1. Workplace Policy
    • Paid Leave Changes. At the advice of his daughter, Trump has come out in support of paid leave changes. Read more here: Paid Parental Leave
    • Compensation Equity. Same song, different verse of the above.
    • Labor Management Issues. In case you haven’t figured it out yet, Trump isn’t your run of the mill Republican.   Mike shared with us that 46% of union households supported him and the second group he met with in the White House was organized labor.   It will be very interesting to see what happens here.   Key advice, treat your employees right if you aren’t unionized because it could get easier for labor to organize.
    • Broadly, policy that will reduce regulations that encourage employers to do business overseas instead of in the US will happen. Interesting that the first two listed here are regulations limiting employer choice on how to do business….
    1. Health Reform, of course.
    • Support of the employer-based system will continue. Don’t think health benefits aren’t ever going to not be a part of your job in HR if you have over a certain number of employees.   Interesting fact that was shared is that 61% of Americans still get their health insurance coverage from employer based plans (not Medicare and Medicaid).
    • Repealing individual employer mandates
    • Expect the Cadillac tax to stay.
    1. Tax Reform
    • Emphasis on employer sponsored benefits and incentives to do so as well as an increased emphasis on employers supporting employees saving for retirement (fear of social security going away anyone?)
    • Educational and training incentives may be reduced as one way to combat the deficient. If you are using or thinking about using federal dollars or federal tax breaks (much of which flows through to the states and is distributed by states) you better go ahead and do it now.
  • Don’t Set Goals if You Don’t (Have a) Plan to Act

    Don’t Set Goals if You Don’t (Have a) Plan to Act

    There’s some great methods out there for setting goals:

    Are Your Goals Comfortable, Delusional or Somewhere in Between?

    A Holistic Goal Setting Method

    A Simple Goal Setting Method

    And based on how a method’s strengths and weaknesses relate to your own personality and preferences, you can find a method out there that is right for you.

    But don’t do it if you don’t:

    1. Have a plan to act
    2. Plan to act

    Goal attainment doesn’t happen through osmosis.  It happens through a process I like to look at this way:

    MISSION/PURPOSE -> GOALS -> ACTION PLANS -> TASKS -> BEHAVIORS

    Breaking it down this way begins with the big picture and ends with the thing that causes the achievement of the big picture- every single thing you actually do or how you behave.

    To illustrate this, I’ll walk you through how we do this by planning as a company on a quarterly basis.  A road map might help:

    blog 1

    blog2

     

    The Annual Goal:  Set one BHAG (Big Hairy Audacious Goal) as Jim Collins calls it that is difficult but not delusional. Our annual goal is always a revenue-based goal that considers a particular profit margin to achieve within that revenue goal.

    The Action Areas:  These 2-5 areas will drive your annual goal. In our case, they are lines of business focus for us.  For example, one is our Career Development Facilitator (CDF) line of business that has been a line of business for us for several years; another is a new, niche area within our current HR consulting business; and the final one is a focus on a new line of business that we have never pursued before (although we get calls about it often).

    The Action Steps: These steps are broken down by quarter. You start DOING something here instead of just deciding. For example, in our CDF action area, we are focusing on: 1) acting to pursue business in a new state that is ripe for the training because it is required for certain positions 2) use the data we have gathered from past participants to develop an off-shoot course and 3) exceed expectations in our current delivery of programs.  You see that two are focused on growth and one is focused on what truly drives our growth- delivering a quality product day in and out.   We almost neglected this last one, but if we did, it would totally throw off how we round out the last step, which is:

    Setting Tasks:  This is where the rubber meets the road, and in the case of our business, this is how we determine what we do each day.  We typically set tasks on a weekly basis to drive our time management for the week.

    We are transitioning this year in how we do this process.  We have been using a simple Excel spreadsheet that catalogues tasks by our company values (which inadvertently links nicely with action areas), but given our company’s growth and hopeful continual growth, we are switching to a more advanced tool to help us with this, and that is program called Insightly.

    This process may seem complicated, but it actually isn’t.   The first two steps took us about 30 minutes to create when we sat down for our annual planning meeting.  Of course, having good data to help you do this makes it much quicker and easier.

    The action steps for two quarters took about another 30 minutes of discussion.  We used to plan out all four quarters then realized things change so much, that doing the last two quarters of the year too far in advance was a waste of time because they depended so much on the results of the first two quarters worth of effort.

    Our task setting takes about 30 minutes a week to do and, although we are very much a company of hard and fast paper and pencil list makers, we are hoping we can transition this into Insightly with ease and make it a habit that ends up taking less time.

    If you are more interested in this process, email us here and we’ll send you the mapping tool to get you started.

     

    Happy planning and doing!