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Is Company Culture Killing Your Pay for Performance?

I just returned from a conference where “culture” was the buzzword. Over and over industry professionals stressed that your compensation plans must be designed to match your culture. But, what if your culture is exactly what is killing your pay for performance? In June, nearly a year after the crash of Asian flight 214 in San Francisco, the NTSB will hold a hearing to determine the cause of the deadly accident. But, we already know much from the interviews of the co-pilot that were conducted shortly after the tragedy.

The co-pilot didn't wear sunglasses because it would have been impolite since the pilot (his senior officer) had not chosen to wear them. Another co-pilot didn’t feel comfortable demanding a correction until too late, because he deferred to the other, more senior, cabin members who said nothing. The culture in the cockpit was designed to work when everything went right, but did not support things going wrong.

It has been said that the most dangerous thing that can be said in an office is, “We've never done it that way.” I would argue even more dangerous is the simple response, “OK”. Agreement when knowing something else would be a better option seldom leads to anything good. But, the biggest offender is silence in the face of a challenging moment. When people are too intimidated or disinterested to speak freely, the support you believe you have is in fact absolutely nothing.

Pay for performance depends as much on correction as it does on cheerleading. A culture that does not support ideas and change is highly unlikely to be successful over the long term.

Pay for performance requires companies to have an interactive form of communication. People must know how and when to ask for help. And, they must know that this is not a sign of weakness but a sign of understanding limitations and working to improve them for the greater good of the organization.

Pay for performance requires a genuine belief by executives that performance (not just productivity) matters. This belief, or lack thereof, will trickle down through the entire organization. It is either fuel that keeps the fires of performance burning or glue that eventually stops everything from moving.

I’d love to discuss examples of how a culture got in the way of compensation programs or even better, how a culture helped turn an average compensation program into a potent driver of success. How does your company culture support or deter performance?

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