Compensation Is Key, But Leadership Is Critical

Paying at or near competitive market rates for talent is necessary to get and keep the best people in jobs.

While pay and benefits must be appropriate in an organization, sound leadership must be in place to truly move the needle upward with respect to employee engagement and organization performance. 

More than once in my 20+ years as a Compensation Consultant, I’ve been asked to help put a “pay band-aid” on a management problem.  One Human Resources Manager asked me to build an incentive plan to incent a Programmer to write code faster.  When I asked the HR Manager if she had ensured the manager of the Programmer had coached the Programmer regarding acceptable performance of her job, the answer was “no”.  I didn’t create the incentive plan and coached the HR Manager on how to coach the low performing Programmer.

Incentives Are Not a Band-Aid for Poor Management

While the illustration I’ve provided can be written off as poor management, not related to leadership, my response is that leadership was absolutely lacking in the organizations where the management faux pas I observed existed.  If strong leadership above these managers had faced the reality of the situations, ensured the managers were trained to handle and provide appropriate follow-up, and ensured the tough situations and conversations were being handled across the organization, ROI and employee engagement would have absolutely been higher at those companies.

Compensation is more than just dangling a carrot. Contact us for help with your strategic compensation planning or visit our webpage.