Is Your Pay Like a Pair of Crocs?
Quick. Describe a classic pair of Crocs in few words.
Admit it. You didn’t use the words engaging, motivating, high performance, interesting or attractive.
You probably used words like comfortable, functional or colorful. Maybe you used words like ugly, cheap, clunky.
Now describe your pay programs. Which of the above definitions fit (if any)?
Crocs are great. But, they are unlikely to inspire at a job interview or land you a second date. Compensation programs often fall in a similar camp. The pay is enough. Some programs are comfortable enough that they do not force employees to look elsewhere. At the same time, they do not inspire action. They are the equivalent of a shoe designed for shuffling around the house and garden.
Of course, everyone should have a pair of Crocs (or something similar) on hand. They are great for those moments when you just want to relax. Every compensation professional should have a couple of “comfortable” tools available. These may fill in the gaps, or act as additions, to the programs with more active purposes.
I often speak to people who describe their incentive programs as “expected” or “entitlements.” The number of companies that have difficulty filling high-priority jobs is often a reflection of jobs that require high-performance pay. Nobody competing in the NBA playoffs is wearing Crocs.
As we continue to explore the link between pay and performance, we must accept the fact that high performance and relaxed comfortability are generally at either end of a spectrum. The first requires effort from nearly everyone – HR, Compensation, Managers, Individuals – the second requires effort from almost no one. Any attempt to combine the two is likely to result in something ineffective at both.
The first step in correcting this problem at your company is determining the most significant disconnect between a “Croc pay program” and the goals it is intended to achieve. This may not always be the easiest solution or the most instantly obvious problem, but it will probably be the one where the impact can best be observed and measured. This will, in turn, allow for more effective approaches for programs where the disconnect may not be as big, but the overall impact (via numbers of participants or value to the company) is highest.
The second step is tracking and communicating change. If your new, more focused and effective, approach to pay is ever to gain traction, you must communicate its impact up and down through the organization. Taking away a level of comfort without showing the reward is destined to a lifetime of wearing crocs for every occasion.