Canadian Doctors Pushed Themselves Away From the (Pay) Table
In Quebec, the infrequent and unusual has happened. Doctors refused a proposed raise. Not because the increase was insufficient, but because they would rather see the money go to the staff who support them and the patients they serve. In the world of HR and Compensation, this not the standard.
There are stories of individuals, including the occasional CEO who has “reallocated” their pay to others. But groups of professionals agreeing to forego payment in respect of others who may be in greater need is unusual enough to make the news.
In my career, I have had this occur, without prompting, only a few times. Each time it was refreshing and eye-opening. Each time, someone further up the ladder questioned whether it was a good idea. In more than one case the request to allocate pay to others was ignored, in other cases, a new approach was devised to use the compensation budget more effectively.
Yes, ignored. Why? Some of the reasons included; exacerbating the ongoing pay compression on the top of the company, insufficient motivation or incentive for the individuals claiming they were making enough, and a slavish need to adhere to a compensation philosophy or model that apparently wasn’t working.
In one of my favorite examples, we discussed a more leveraged and lucrative sales incentive plan with future recipients. As a group, they expressed concern that the distribution and support teams were the stars that need better pay. One individual actually said, “It doesn’t seem fair to pay us for selling more since we are just creating more work for everyone else.” Yep, a salesperson said that to me and sincerely meant it.
In another case, a CEO kept his pay low for several years. Out of respect (and a misunderstanding of pay structure), other executives were also kept below market. After several years of growth and significant performance, the CEO and executives wanted to take the artificial cap off their pay, but the company has become accustomed to having that extra cash for operations, and the Board had become comfortable with the pay levels. Catching up with the market, proved to be an effort that drove everyone close to the brink.
In these rare cases, the “best practices” playbook is insufficient. If the request is honored how does the business catch up when more budget is available? How does a company explain to the lowest paid members in the group that the highest paid “make enough” (for now?) Is the company prepared to create a hybrid incentive plan that motivates salespeople while funding incentives for those who “make sales happen?”
I wish I had answers to all of these questions, but like so many compensation challenges, the answers are likely to be as unique as the individuals and company. I’d (and I suspect subscribers would as well) love to hear from individuals who have addressed this issue. What was the impetus? What was the short-term solution? What was the long-term impact?
Lastly, I wanted to follow-up on my last post “Why Do You Pay Women Less?” As of yet, no one has answered to the very not-rhetorical question. But, since published, we have had International Women’s Day, and UK companies have started to release pay gender equality results. An example that proves the problem, Deloitte said that females in their UK practice make about 43% less than males. As of yet, they have not written a response to my passive-aggressive article.