untitled

untitled

Those of you who regularly read my articles know I often view the world from a different perspective. This is one of those posts. WorldatWork is the main professional association for total reward professionals. Each year they put on an excellent conference and this year was no exception. The theme for the event was “Grow.” The setting was Minneapolis, MN. The weather, as one might expect, was capricious. The conference had tons of great sessions and speakers, but the most important lesson I learned was from Minneapolis’ famous Skyway. If you have ever been to Minneapolis, the Skyway is sort of a hamster “Habitrail” for humans. It is a system of above ground tunnels that provide shelter from the extreme weather conditions that residents call “seasons.”

After using the Skyway to get from my hotel to the conference site, I realized that the system was exactly like incentive compensation. OK, maybe not exactly, but close enough.

  1. The Skyway is critical to the success of both the city and its users.

  2. The Skyway requires significant amounts of planning, design and construction and was more expensive than a traditional sidewalk.

  3. For those unfamiliar to the local conditions, the Skyway may seem unnecessary or even excessive.

  4. The Skyway requires you to trust the paths will get you where you want to go, because often you cannot see the final destination.

  5. The Skyway can be confusing to new users. Consequently, they tend move slower and ask for directions more often than those who have mastered the system.

  6. The Skyway often takes longer than the sidewalks, but in many cases, a bit longer is totally worth the benefits of making it to your goal when the environment is at its worst.

  7. While the Skyway may not be perfect and requires both ongoing maintenance and communication, without it downtown Minneapolis would often be unable to function.

  8. When the weather is great the system provides little other than an interesting thing to discuss with out-of-towners.

Simply replace the word “Skyway” with “Incentive Plan” and you’ll easily see the lesson learned. Pay for performance can be hard and sometimes confusing, but when designed and executed correctly, it is better than the alternative for specific circumstances. Often conditions are great and no incentives are needed. Expecting them to stay this way is just silly. Building a system that will support your needs even when the world throws its worst at you, costs time and money, but thriving in any condition is the hallmark of a truly successful company.

Dan Walter is the President and CEO of Performensation a firm committed to aligning pay with company strategy and culture. Become a better business leader.Everything You Do in COMPENSATION IS COMMUNICATION” was written by Comp Café writers, Dan Walter, Ann Bares and Margaret O’Hanlon. It lays out a practical approach to communications (with helpful worksheets for each step). Dan has also co-authored of several other books you may find useful including “The Decision Makers Guide to Equity Compensation”and “Equity Alternatives.” Connect with Dan on LinkedIn. Or, follow him on Twitter at @Performensation and @SayOnPay.

Can contractors be paid in RSUs or only employees?

The Best Performance Goals Are D.U.M.B.