Compensaton and Benefits
A friend of mine is in charge of global operations for a large textile manufacturer. He came over for coffee last weekend and talked about his busy schedule, the demands on his time and attention, the endless travel.
‘I have to figure out a way to earn the same money with a better work life balance,’ he joked with a grin.
Ironic, isn’t it? On the one hand, the news is full of salary freezes and the negative impact on employee engagement. On the other hand, here’s someone feeling trapped by a high salary.
Reinventing oneself sounds so romantic, doesn’t it? And it’s easy to be flexible in your twenties when all your paperwork fits in an accordion folder and you’re searching for that visionary employer who hires history majors into management training programs for fabulous sums. With no ties and modest needs, you can finagle your way into a low-paid marketing internship on the other side of the world and a career is born.
But once you have a spouse, kids, two cars, a house, a mortgage and a style of living you’re accustomed to it gets harder to make big career changes. Not impossible, just harder.
And it’s not just the money, there’s the time angle as well: ‘I could get out of textiles and go into, say, a food chain,’ mused my friend, ‘but I’d have to work even more than I do now to be effective.’
So my friend may dream of a simpler life with a few chickens in the yard but he’s not going anywhere.
The good news for companies is that despite gloomy predictions, experienced people aren’t necessarily a retention risk if you’re paying them well and they have reasonably positive feelings about your company.
The bad news is that a high salary isn’t intrinsically motivating beyond wanting to keep the same salary level. What is motivating: fear, a desire to keep the status quo, loyalty and passion.
Fear leads to mistakes. Maintaining the status quo can be highly motivating but leads to stagnation. Loyalty is good but narrow in focus. Passion can achieve miracles.
But you’ll never get passion for the business with salary alone. You won’t even get true loyalty. At best you’ll get a desire to maintain the status quo combined with fear of loss. Some good, solid work can come out of that combination but it’s ultimately a dead end.
In any career a point is reached where either a person’s talent won’t take them further, or they’re not willing to go that extra mile for the next step. So they more or less stay in place and at some point experience may lose its edge and turn into complacency, inflexibility and unwillingness to listen.
The good news is that there’s a big opportunity here. As we look around at companies in general we see several related problems:
- People who are good at their jobs and loyal to their company but exhausted by a relentless workload;
- Lack of experienced successors for key positions; and
- The next tier of management hopefuls, who feel ready for more responsibility and frustrated by lack of growth opportunities.
The solution to all three of these problems is pretty obvious: Once skilled leaders have passed their personal efficiency peak the 'next step' is transition to a more mature style of leadership, that involves more coaching, mentoring and delegation.
The 'catch' is that leaders who coach and delegate instead of tightly clutching the reigns may find themselves out of a job in companies where leadership is defined by personal achievement.
Which is counterproductive because businesses need to provide growth opportunities and prepare the next generation of leaders.
So... why are we still paying people to do the opposite?
Laura Schroeder is a Compensation Strategist at Workday, a modern Software-as-a-Service solution for optimizing your investment in people. She has nearly fifteen years of experience designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and is currently pursuing a certificate in Strategic Human Resources Practices at Cornell University. Her articles and interviews on HCM topics have been published in the US, Europe and Asia. She lives in Munich, Germany and enjoys cooking, reading, writing, kick boxing and spending time with friends and family. If you want to read more from Laura, check out her talent management blog Working Girl or follow her on Twitter @WorkGal.
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