How’s That Job Matching Working Out?

The nice thing about standards is that there are so many of them to choose from.
–Andrew S. Tanenbaum

So, is job matching an art or a science? Or a little of both? And when you talk to employees about your job matching standard, which one are you talking about?

You Can Pick Your Friends, and You Can Pick Your Pay

Skyline Construction lets workers pick how much pay they want to put at risk.

As my dad used to say, “You can pick your friends. And you can pick your nose. But you should never pick your friend’s nose.” My dad, the philosopher.

How to Pay a Superstar

[Image: photobyae]

What Defines the Market for Superstars?
We talk about market-based pay a lot in the HR business. By that, we generally mean that market-based pay = median pay. On top of that, we define the “market” as +/- 20 percent of the median. It’s about being in the ballpark.

A-Rod Makes More Than The Florida Marlins Team
Well, some ballparks are bigger than others. And some salaries are a lot bigger than others if you do it right. Dig if you will that Alex Rodriguez — A-Rod — the New York Yankees shortstop, will make more money in 2008 than the entire Florida Marlins baseball team. The whole team.

How Would You Explain Market-Based Pay to the Best Player in Baseball?
Now, the market median for baseball player is $1 million. That’s a lot of money. If you were in HR at a baseball team, how would you handle that discussion with A-Rod? Would you try to reassess his peer group? (Side note: I once worked with a consultant who said, “I don’t need to do a peer group analysis. I don’t have any peers.”) Would you explain to him that $1.2 million is well above the median?

How to Pay a Superstar
So how do you pay a superstar? Practice, practice, practice. (No, that’s the answer to “How do you get to Carnegie Hall?”) With lots of money, that’s how.

Market-based pay is for others. It’s not for superstars. High leverage variable pay programs can deliver as long as the differentiation is huge. An A-Rod wouldn’t be around long if you told him that 50 percent better than the median is excellent. It’s gotta be big. And you have to be successful. A-Rod works for the New York Yankees, the most valuable team in baseball.

Do You Have an A-Rod on Your Team?
Here’s the deal: Wouldn’t it be cool if there were a separate pay pool and pay rules for superstars? I mean, if you put people in the high-potential/high-performing category, aren’t they there? And wouldn’t it be cool to be able to be able to pay them the big bucks if they perform?

Do you have an A-Rod on your team? If not, why not?

Everything You Need to Know About Paying Superstars

The statistics are clear, superstars do more than twice as much as the average employee. So how do you pay them for those results? In the case of the Philadelphia Phillies, not well.

Bob Ford, sports columnist at The Philadelphia Inquirer, writes about everything you need to know about paying superstars in Phillies Blew It With Hamels.

Here we are, eight years into the new millennium, more than 125 years since the Phillies began operating a professional baseball team, and the organization still can’t tell the difference between what is smart and what it can get away with.

The Phils have bungled the handling of Cole Hamels’ contract, and there’s no other way to look at it. They have upset a valuable part of their roster, apparently because they had the right to do so.

Here’s the deal. Cole Hamels won 15 games for the Phillies last year. But he’s young. So the Phillies decided they didn’t need to pay him now because he would make more later. BAD mistake.

In the case of Hamels, now and in the future, the Phillies have made winning less likely. Cole Hamels has the potential to be a great pitcher for a long time, but it is now less likely that he will be happy here, less likely that he will pitch through his annual collection of tics, spasms and strains, and less likely that he will stay with the organization once escape is possible.

But, congratulations, Pat, you saved $200,000.

The next time you want to save a lot less, say $20,000, because you don’t have to pay your superstar any more, remember these words:

The Hamels situation isn’t the same thing, but it is the same principle. Just because you don’t have to spend some money, just because there isn’t a rule book somewhere forcing you to spend it, doesn’t mean that spending it anyway isn’t a good idea.

The Phillies are technically right about how they handled Hamels’ contract. They followed the rules, doing what they were required to do and little more.

Being right isn’t the same thing as being smart, though. All these years and they still don’t get that.

Please read Bob Ford’s entire article here. Very nice high potential pay article, Bob.

The Ultimate Pay for Performance Song: Santa Claus is Coming to Town

I was watching this Bruce Springsteen version of Santa Claus is Coming to Town and came to a realization: It’s the ultimate pay for performance song. Look at the lyrics:

You better watch out
You better not cry
Better not pout
I’m telling you why
Santa Claus is coming to town
He’s making a list
And checking it twice;
Gonna find out Who’s naughty and nice
Santa Claus is coming to town
He sees you when you’re sleeping
He knows when you’re awake
He knows if you’ve been bad or good
So be good for goodness sake!
O! You better watch out!
You better not cry
Better not pout
I’m telling you why
Santa Claus is coming to town
Santa Claus is coming to town

If you could make your pay-for–performance message this tight you’d be in like Flynn.

Merry Christmas. And happy pay for performance.

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