We’ve been talking a lot about pay transparency lately. It’s a tough topic. I have a few strongly-held opinions of my own that I’ll get to soon. Meanwhile, KnowHR commenter Peach Flambe summarized what it’s going to take if pay transparency becomes the norm. I bolded one sentence that you should kick around a lot. Pay for performance doesn’t work when performance management is a mess.
On the topic of transparency – I say be careful what you wish for. This really isn’t an issue about pay, it’s an issue about people’s perception of their self worth. In my 24 years in big corporations, I have found that most pay systems sit on top of completely inadequate performance management and career development processes that are run by managers who are not skilled in people management. It’s easier to let people believe they are better than they are, since to give them true, honest feedback would be disruptive to the business, make the manager’s job harder, etc. So performance issues don’t get addressed, people continue to get raises (because to deny them would be “demotivating”) and along we go until a major shock — a recession, say — means we have to deal with the years and years of poor management. And how do we do that? Layoffs.
Performance is in the eye of the beholder. There are very few jobs where there is an absolute standard. And people will always think they are better than their boss thinks they are. I don’t think anything we can say about pay is going to change that.
It’s too easy to blame Compensation when it’s lazy and ineffective management that’s often at the heart of what goes wrong in pay systems. How about that? Managers need to step up. Want pay transparency? Get performance management right.
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Frank:
Ms. (Mr.?) Flambe makes a great point. While this isn’t the answer to all of our pay issues, it cuts to the heart of a great many of them. And it is unlikely that managers will step us until their leaders hold them accountable for doing so (and step up themselves).
Ann, it’s Ms. Flambe.
You’re right, this starts with leadership…and it requires managers to be accountable. It’s essential.
Has any large company gotten performance management Right?
@rick…my sense is that answer is no. They might have parts right, but they let managers slide all the time…it’s easier to blame comp than it is to blame bad management and perf mgmt.
I want to say that I am both honored and humbled when HR World features our stuff. It’s super cool. HR World…can you drop me a note at frank [dot] roche [at] ifractal DOTCOM?
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