If Motivating You Is Wrong, I Don’t Want To Be Right
Posted on Thursday, August 23, 2007 by Frank RocheI saw this quote today by Sir Ken Robinson on Diego Rodriguez’s Metacool:
If you’re not prepared to be wrong, you will never come up with anything original.
That made me think about why companies use pay surveys to set their pay levels. I mean, what would you do if you had none of that information and needed to create a pay plan? Would you even have base salary? Would you make everyone a partner in the business and let them share in the profits — and invest in the business? Would the calendar dictate when pay increases should happen? Would three years be considered “long-term”? Would you run your company differently? Would you have more managers than workers?
Here’s a challenge: You should pay people at the 99th percentile. (As long as we have data, we might as well use it.) Because you pay more than everyone else you will get the best talent. And those highly-paid people will rock your world. Your company will be the place to work, and the most successful company on the planet. It could work. Has anyone proven that it can’t?
Discuss.
Robyn
Aug 23rd, 2007
Frank, I know that Wegman’s treats both employees and customers extremely well and it has been listed in the top ten best companies to work for. It’s a great pleasure to go into a Wegman’s grocery. They even have fish bars where they bring in fresh fish from New England. They hire chefs and pay them well. Turnover is very low! They probably do make mistakes at times, but any smart person learns more from mistakes than successes. There’s a famous quote by Thomas Edison to that effect.
rick
Aug 23rd, 2007
You had me at Hello… but lost me at 99th percentile.
It is thought provoking to imagine what companies would do, and would it be better, if there was not such a high value placed on what other companies are doing and how they are doing it. Surveys have for many companies squashed creativity in pay design and administration.
While I suspect that you are being provocative to make a point with the 99th percentile comment, there are many reasons not just to jump to the “pay high to get the best people” bandwagon. This assumes that : (1) employers do a great job of selecting the “right” people and (2) money is the issue in recruiting and retaining the best people.
Assuming some level of premium pay is appropriate then we need to discuss whether this is fixed pay or high pay for high performers and/or when the company is high performing.
Thanks for stimulating the discussion.
Frank Roche
Aug 24th, 2007
Robyn, that Wegman’s example is a great one…treat them well, pay them a good wage, and voila!
Rick, yep, this is an intellectual exercise…and one I’d like to explore more with you…I think it’s high time to question the status quo, and there’s no one better prepared than you to discuss how this would work. It’s a thought provoker….a brilliant comp person told me last night this might work for a while, but then all the highly-paid people would want to preserve the status quo and their high pay, ruining the approach. It’s still fun to fantasize though, isn’t it? A little blue sky thinking never hurts.
rick
Aug 24th, 2007
There is a second brilliant comp person?
Frank Roche
Aug 25th, 2007
Rick, it’s a small group that you are in. You know who she is.