5 Hidden Cost of Inaccurate Compensation

Is Your Compensation Manager an MVP?

Todd Black
Feb 05, 2016

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The Super Bowl is upon us and there has been a lot of talk about one of the most important positions on the field, the quarterback.  They call the shots, change the plays at the line of scrimmage, and communicate to the rest of the offense what should be happening and the intentions of the head coach.  

Most of the time this is done through a standard communication process where the team huddles up around the QB and he shouts out the play the coach wants them to run.  But because the game is a rapidly evolving event, he must sometimes quickly make changes to the play when he gets to the line of scrimmage. 

In games, the quarterback scan the defense to see if there’s something he can exploit, such as a favorable match-up against a weaker defensive player.  If he does see something, he will call an “audible.”  An audible is either a verbal communication the QB shouts out to everyone on his team letting them know he’s changing the play, or a gesture through hand signals that has been communicated to the players in practice earlier in the week or in the most recent huddle. Regardless of how it is expressed, it always indicates a last-minute change.

 

Great teams know how to communicate whether it’s on the field of play, in the huddle, on the sidelines, or in practice – even in times of sudden change.  The coach provides overall instruction and the team carries it out.  This same type of communication process can be seen each day in businesses all across the globe, not just on the football field.  There is, of course, verbal communication through phone calls and meetings and non-verbal communication through e-mails, newsletters, and instructions or directives that come from executives to managers to carry out.

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When it comes to communicating about compensation, organizations have an MVP on their teams as well.  They can be seen in HR in Compensation Departments, or on the front lines as managers.  Communication can be standard and easy to get from the top down, much like the play calling from the coach’s box high up in the stadium to the coaches on the field to the QB on the huddle with the clock ticking. 

Today’s compensation communication follows suit – requiring direction from Boards and Compensation Committees, to CEOs, to HR leaders, and CFOs – all the way down to hiring managers and coaches (who need the flexibility to call an audible along the way – more on that later).  This standard communication technique is most apparent in the annual review process and is very effective for the majority of workers and easy, most of the time, for managers to carry out in the field. 

Managers can also find themselves, just like the QB, in the thick of things and needing to call an audible.  Management in the field know first hand what is happening on a day-by-day basis and need to have the freedom to call compensation audibles from time to time in order to retain great talent. 

Envision this: You are a manager on the front lines, six months into your compensation review cycle, conducted annually. You have an employee that has been performing above expectations.  You sense they are becoming disengaged with their team and rumor has from the break room they might start looking for another job.  Instead of waiting six more months and potentially losing this great employee, you call them in, talk with them about their situation, and with management’s quick approval you are able to offer them a spot bonus or continuous reward.  A spot bonus could be something you provide once and doesn’t affect their annual salary or you could offer an incentive that could be continuous and tacked onto their weekly pay.  Either way, you’ve called the compensation audible - and the play was a success. Congratulations!

A major issue though with most managers today lies in the fact they either don’t have the luxury or liberty to call compensation audibles or compensation options they can use in on-the-spot (or even simply off-cycle) situations.  Managers need tools that provide them with flexibility to call the shots when needed, to provide a spot bonus or continuous reward to a top performer because it is the right call. 

True compensation, in most cases, should not be cookie cutter and the freedom to communicate to your team falls outside certain standards as well.  HR, just like head coaches, has a game plan each year and even breaks them down by quarter to provide managers with guidelines to stick to throughout the review process.  Both teams, HR/Finance and Football, should have the flexibility in their game plans to know things are not going to work always as planned.   Plays and plans will need to be adjusted as the game is played out on the field and in the office.

Sometimes the communication process is best executed when you provide managers with overall compensation guidelines for the year, but allow them the ability to call the shots, stay within budget, and in turn come out on top when the team needs them the most.  

PeopleFluent Compensation enables everyone from the top down to feel confident in providing consistent compensation communication, and supports flexible compensation audibles in the hands of field managers to carry out as needed.  Allow HR, Compensation, and team managers in the field to be MVPs.

Want to see how our compensation software can empower you to be company MVP? Take a guided tour today!

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