HRExam Poll: Comp Data Confidential

Last modified on 2011-05-12 16:49:36 GMT. 3 comments. Top.

Periodically, we ask the members of our Editorial Advisory Board to field a question. This month, the question has to do with the degree to which the sensitive information the HR professionals handle can or should be used for personal gain.  HRE is the place where external data, ranging from medical and background data to compensation norms meets the data in the company.

Among the critical and confidential chores that the HR executive must navigate, this broad access to employee and executive personal data is one of the trickiest ethical environments. It’s only human to absorb some of the data in a personal way. How one handles this professionally is the difference between a powerful bit of organizational leverage and effective execution of the role.

As you’ll see, each of the members of our Brain Trust approached the problem differently. Background, experience and role foundations all play a part in their perspective.

What would you do if faced with the same situation?

Question:

You are the VP of HR conducting compensation surveys in your company’s market.  You discover the executives in your company make about 80% of salary and stock options that the same people at comparable companies make.  But you make only 50% with no stock options.  What do you do?

Responses:

Marc Effron, President, The Talent Strategy Group:

Let’s start with the compensation philosophy of your company. Is the current state (both percentile and comp vehicles used) consistent with the expressed compensation philosophy of the company?  80th, 50th, whatever — meaningless numbers until compared against what your company said is their preferred way of compensating.  If they don’t compare, then you propose adjusting them. If they do compare, you do nothing.  If there’s no compensation philosophy, then obviously that should be your starting point.

Bob Corlett, President, Staffing Advisors

80% or 80^th percentile?  Inquiring minds want to know.

I’m no comp expert.   That said, I’m more familiar with salaries expressed as a percentile

50^th percentile being average pay across all employers

80^th percentile being pay higher than 80% of similar employers.

So in my mind, your question is quite different as to whether this HR person is being half of what comparable earn (50%) or about what everyone else in a similar job makes (50^th percentile)

My guess is you were framing the question around whether the HR person was worth average pay, not half pay.   That, to me, is a more interesting question to answer.

Internal equity is the hobgoblin of little minds.   Admittedly it is really common to pay an entire organization at the same percentile of what other organizations pay – where every single employee is at the 50^th or 75^th percentile for their job title.   But does this make sense?  In many organizations, one department has an outsized impact on your results.

So if  having average HR or accounting people does you no harm, should you bother paying above 50^th percentile?   Probably not.  But if having the best software developers determines your very existence as a company, well then you should pay your developers more than the 50^th percentile.   You just need to be clear about what you are doing, and why.   So first clarify with the CEO that this is their compensation strategy.  Then,  either accept your pay or go somewhere that HR really matters.

Bret Starr, Principal, Starr Tincup

Unfortunately, that question is above my pay grade (pun intended).

I start by questioning how executive comp aligns with the rest of the comp in the company.

IMO pay must be based on a responsible ratio of earnings, but should also be shared proportionally throughout the company.

So even if execs are making less at your company; if they are making outrageously more than every-day workers, I would probably cut their pay for the good of the business.

There is almost no evidence that suggests outrageous executive pay correlates to shareholder value.

Kris Dunn, Chief Human Resource Officer Kinetix, Editor HR Capitalist and Fistful of Talent:

“Ah yes… The sticky question of the person charged with comp analysis showing up as underpaid.  A morality tale that’s as almost as old as the workplace itself.

Here’s the skinny.  As HR pros, we have access to all the information, so you have to be careful regarding how you approach this.  The wrong way to claim you’re underpaid is to compare yourself  against someone else on the leadership team, which is a trap that lots of HR leaders fall into.  Start comparing apples to oranges, and suddenly the people you’re complaining to start wondering if you can handle all the access you have to the data.  This is especially problematic at the HR manager and director level in the field.  My saying to the HR managers and directors that have worked for me in the past: “With great access comes great responsibility – and the need for maturity related to pay data”.  Having all that access almost never feels good to those who have it in HR.

However, the situation outlined above is a rare opportunity.  Rather than comparing one-off’s, you’ve been asked to do a broad analysis of where your company might have issues.  So, you present your own data embedded with the other potential issues you discover, then make recommendations that are systematic rather than about you.  Example – we’re at the 80th percentile for most of our  executive team, but we have 3 situations we need to look at.  Recommend across time that your company seek to get those under the 80th percentile to that level.  See where it goes – if you’re presenting to the C level, they’ll appreciate the classiness you’re handling it with and if they like and value you, will seek to put a plan in place to rectify your situation first.

Don’t complain, don’t say you need to “take care of me”.  Present the data overall and make real recommendations that you will be positively impacted by.  If that doesn’t work, there’s a deeper question we need to explore before deciding what to do next.”

Claudia Faust, President, Improved Experience

Assuming I’m upset about this information, I’m not sure how its discovery changes the fact that I previously accepted (and possibly negotiated) the role for the stated compensation package.  Sometimes it takes moving to a new job to be paid what we believe we’re worth in the market place.

Todd Dewett, Professor of Management, Wright State University, President TVA, Inc.

First, sit on it for a few hours and speak to no one about that specific issue.  Let any and all emotions subside.  Next, make sure you are comparing your compensation to others within your functional area and at your hierarchical level.  You may discover you are, within reasonable margins, correctly compensated.

If you find otherwise, ask yourself whether you are willing to spend some or all of your social capital attempting to address the issue.  To move forward you must create conditions that support your case.  This includes detailing your performance history with well-documented achievements, above expectations, which favorably compare to your contemporaries who earn more.

Frankly, the best tactic is often to negotiate a performance plan the will clearly justify a future increase in compensation (for example, twelve months out).  You are not asking for a raise per se, but signaling your strong intent to earn a positive adjustment in the near future.  At the end of the performance period your odds of receiving the increase go up significantly, assuming you performed as planned.  If you do not receive an appropriate increase, you will have at least put your self (and your resume) in the most competitive position possible in terms of assessing your broader career options.

Heather Bussing, Employment Attorney

Just because other companies pay more, it doesn’t mean you’re entitled to more too.  Just because others in your company are paid more, it doesn’t mean you’re entitled to be paid the same.  This is true for a million reasons, including many that have nothing to do with you.

As a manager charged with obtaining the salary data, and as an HR professional charged with properly handling sensitive and confidential information, it’s a good idea to think carefully before using the data to promote your own agenda.

But if you believe you are being discriminated against based on a protected factor, look at the numbers and find out if your hiring and compensation practices have a discriminatory effect.  If they do, part of your job is to bring this to the attention of the CEO and make recommendations about what changes the company needs to make to eliminate discrimination.

If you are sure you are getting screwed and can’t get over it, then by all means get out.  It will be better for you and the company.   Besides, now you know who is paying more.

Your Turn To Vote – Comp Data Confidential

Last modified on 2011-05-12 22:09:39 GMT. 1 comment. Top.

It’s your turn to vote.

Periodically, we ask the members of our Editorial Advisory Board to field a question. This month, the question has to do with the degree to which the sensitive information the HR professionals handle can or should be used for personal gain. Here are yesterday’s results from our Editorial Advisory Board.

Our Advisory Board has had it’s say, NOW, it’s your turn to vote.

You’ll see instant results at the time you vote but we’ll publish the full results next week here on HRExaminer. Poll closes Monday at 5PM.

Here’s the scenario you are voting on.

You are the VP of HR conducting compensation surveys in your company’s market. You discover the executives in your company make about 80% of salary and stock options that the same people at comparable companies make. But you make only 50% with no stock options. What do you do?

They Resigned, Now What?

Last modified on 2011-05-12 16:53:53 GMT. 0 comments. Top.

Bob Corlett | Founding Member, HRExaminer Editorial Advisory Board

Bob Corlett returns to the HRExaminer Editorial Advisory Board. Bob has worked in staffing and consulting for over 25 years. He is the founder and President of Staffing Advisors, a retained search firm near Washington DC. He developed The Results-Based Hiring Process® and is one of Washington’s best known thought leaders on staffing and recruiting. Full Bio…

They Resigned, Now What?

by Bob Corlett
Editor’s Note:  This is a sequel to Bob Corlett’s recent post on his blog  The Staffing Advisor about how to approach the relationship with a top performer who is resigning:  Your Top Performer Just Quit: How to Handle A Resignation.  We began a conversation about what to do after that person is gone, the work still needs to be done and people are feeling insecure.

When one of your top people resigns, your reptile brain goes into overdrive.  Your cheeks flush, your mind swirls with emotions-  anger, surprise, disappointment, maybe even embarrassment – and questions, always the questions: “Uh Oh, is this going to make me look bad with my boss?” or “Oh no, how are we ever going to stay on track with the new systems roll-out now?” or  “How is the team going to take this?  Are they going to wonder if they are fools for staying here?  Is this going to start a talent exodus?”  (Oh, that lovely reptile brain – so brilliantly designed to escape the threat of hungry predators, and yet so hilariously unsuited to the “threats” of modern office work).

And then, as you emerge from the swirl of your amygdala hijack you notice something … your soon to be ex-employee is still standing right in front of you.   And you didn’t hear a word she said in the past few minutes.

So you pull yourself together, summon your best manners and mutter some vaguely insincere well wishes.  You ask her to keep it quiet until you form a plan (because you want to get out ahead of the company grapevine….which already had this news 2 weeks ago).

Then you close your office door and go into full-on damage control mode.  You alert key people, start to divvy up the responsibilities and swing into executive action.   You know that everyone else on your team is looking to you for decisive action.   You are the boss doggone it, so you need to decide how to handle this.

Or do you?

Consider the possibility that a resignation is an opportunity.

• An opportunity for other people to step up to more responsibility.  Not because you assigned it, but because they wanted it and asked for it.  Many people live in the shadow of a star performer.
• An opportunity to improve the status quo – to rethink how to organize the work.   Not your ideas of how to reorganize – but the team’s ideas – they might have been just waiting for an opportunity to rethink things.
• A resignation is a “teachable moment” to allow the team to have some input into how things should work.   It is a perfect time for innovation and creativity.

Never let a crisis go to waste.

Rarely are the affected employees consulted about how best to deal with the gap or told how valued they are.   Sure, its business and it happens all the time.   But just openly acknowledging the loss goes a long way to let employees know they are important.

More About Influence

Last modified on 2011-05-13 15:35:20 GMT. 3 comments. Top.

Influence fatigue.

That’s got to be what you call it when people are starting to get sick of the subject of influence. To say that the topic of influence has been flogged within an inch of its death is to deeply understate the volumes of smoke that have billowed out of the conversation. Rich intensity and strong opinion are the characteristics of a debate which featured magnificent posturing and little insight.

The critical question is, ‘why should you care about influence’?

As a staff function, HR has little in the way of organizational power. Any significant organizational change driven by the HR operation will rely, almost exclusively, on influence for its success. If you are unwilling to devote real time and attention to the study of influence, its acquisition and you probably aren’t going far in the profession. Influence is a fundamental skill.

Where the manager of a line function can cause real things to happen through the deployment of resources and budget, the manager of any staff function (including HR) relies on persuasion and subtle leverage to accomplish organizational ends. Wielding power is what line managers do. Influencing is what staff people do.

Any great career as a staff member involves the acquisition, development and utilization of influence as a prime strategy.

Today, organizational forms and communications media are evolving at unprecedented rates. The tools available for the professional influencer are evolving rapidly, too.. These days, careers are made and broken by tactics and techniques that didn’t exist five years ago. While it isn’t possible to measure influence perfectly, you can be certain that its measurement will play a part in the evolution of HR.

One really interesting way to think about the role of HR is that it should be responsible for the optimal arrangement of the network that is the organization. This task, which is the logical consequence of talent management, involves clearly understanding how the members of the internal network interact with the outside universe. It requires a clear understanding of the consequence of rearranging parts of the network.

Influence is what you use when you don’t have direct control over the outcome.

Influence impacts the organization on a variety of fronts. Here are some of the places where HR needs to understand and exercise influence. Each of the categories can be explored deeply.

• External Influences
  • External stakeholders (investors, community, government) are both influencers of and influenced by the organization.
  • The community of talent that supplies the organization’s Human Capital is yet another externality that can only be managed by influence. Employment Branding is a grand exercise in the use of influence to affect opinion and sentiment.
  • Customers are simultaneously influenced by a direct experience of the organization and by the brand (influence).
  • HR has a meaningful role in the ‘ecosystem’ (partners, suppliers, distribution channels). These are talent supply sources. They are also the heart and soul of the organization as enterprise.
  • A new element of influence involves the way that the HR industry is changing. Active participation in emerging groups (like HREvolution and the TRU Unconferences) creates a back channel for best practices and new ideas.
• Internal Influences
  • HR functions deliver both direct and direct influence on organizational functions. Execution of policies, compensation philosophy and the seamless delivery of benefits and payroll under gird the organization’s image as stable, generous and involved.
  • Talent Acquisition, development and management strategies are the beginnings of HR’s real deliverables. The function, whether intentional or not, aligns the networks the make the organization thrive and prosper. HR policies determine, to a large extent, how flexible the structure is.
• Your Influence
  • As an HR worker, one is often faced with problems for which one is not provided adequate authority. This is the essence of staff work. The first order of business for most HR pros is to acquire some sort of credential. In the latest HRxAnalysts Psychographics study, over 90% of the workers in HR have either an advanced degree or a certificate of some sort.
  • While credibility is one underpinning of influence, credentials only get you so far. Successful HR careerists develop reputations of discretion, integrity, follow through, creativity and self-responsibility. Influence starts with credibility and ends with reputation.
  • Along the way, sponsorship and backing are the middle ground of day to day influence. Being able to say that your executive sponsor is backing an initiative goes a long way towards getting people to move in the direction you desire
  • Work on external projects, including social media, serves to reinforce both credibility and reputation.

The subject of influence is vast. Almost anything in HR that doesn’t involve the creation of content involves the use of influence. Any successful player in the profession is a student of the subject.

That said, the measurement of influence is in its infancy. Influence is not a clout score or membership on one of our lists of influencers. But those things are telling us something.

If you take a look at the top 25 Influencer lists over the last couple of years, they have been solid indicators of a broadening level of industry influence for the people on the list. That’s not the only part of influence that matters, but it is a very interesting one.

We think that by studying the way that influence can be measured online, we’re learning more about how to use influence in our lives and organizations.

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HREvolution and Bersin Impact

Last modified on 2011-05-09 17:05:20 GMT. 5 comments. Top.

I spent the last week of April at a couple of conferences that you should be aware of.

The Bersin & Associates Impact conference, held annually in St. Petersburg, Fl is a gathering of senior HR Executives. The crowd reflects the roots of Bersin’s consultancy and is heavily peppered with Learning and Development execs. It is ground zero for the distribution of information about best practices in Talent Management. The firm is making great strides as it expands into Talent Acquisition and the broader terrain of HR beyond the training silo.

Bersin’s Impact is an on the books experience. I cannot imagine that there were any attendees who weren’t on an expense account. It’s held during the week, in the middle, so that all travel is on company time. It is a profit maker for Bersin.

HREvolution is a tribal gathering of the young, upwardly mobile HR leaders of tomorrow. While the name is slightly misleading (little revolutionary HR was in evidence), the assembled network is the embodiment of the new face of HR. The upstart attitude feels like a revolution. The content (which is the excuse for the gathering, not the reason) leaves something to be desired.

More like a class reunion (or Harley convention) for a certain type of up and comer, the HREvolution conference involves a group of people who are happy to spend their own time and money to play. It’s held on the weekend so that work is not impinged by the event. It’s not clear that the idea of a profit ever surfaced in the central planning committee.

Both conferences are examples of what the professional association of the 21st Century might look like. Both involve self-selected subsets of the overall profession. Both involve the presentation of best practices and interesting ideas. Both involve the collection and dissemination of ideas, tactics, techniques and data.

One of the most notable differences is that the people at HREvolution really, really like each other. Where the Impact crowd networks in that polished upper echelon manner, HREvolution is a gathering of people who can’t get enough of each other. The composition of the audience in each HREvolution session had as much to do with who wanted to sit with whom as the actual topic.

Hands down HREvolution is the better party. Where the Bersin bar was nearly empty at last call, the HREvolution partiers were looking for the next late night joint when the hotel bar closed. The grassroots feel of the event extended into neighboring bars and restaurants. The laughter rarely stopped at HREvolution.

The difference in emotional tone is a primary indicator of the quantity of learning that is going on. The Bersin presenters shoveled huge volumes of cost justification information down the open throats of execs who might propose change initiatives. The HREvolution attendees were hungrily lapping up anything that looked like it might offer an on-the-ground productivity improvement. I’m tempted to describe one as data-waterboarding and the other as information-waterskiing.

After two days in the Bersin data flow, it’s hard not to see other conferences as weak in content. The presenters (who were generally researchers from Bersin’s team) had a strong command of the underlying theory and data. Notes were scribbled furiously in every session I attended.

There was less note taking in evidence at HREvolution. The conference was more about knowing who to call than knowing what to say. The conversations were vastly more interactive and acted as opportunities to understand the audience members as well as the presenters.

In the front of the beautiful brochure that describes the conference and its speakers, the Impact organizers make a big point of saying that “this is not a trade show’. While there are plenty of vendors in evidence (and anyone who wants to hobnob with real decision makers ought to consider sponsorship), they are tightly managed and kept to the side. Booths are minimized in the vendor hall.

At HREvolution. you’d be hard pressed to tell who was or wasn’t a vendor. Everyone in the network is tightly aligned and integrated. There is no vendor ghetto and a given presentation was as likely to be from a consultant, a vendor or a practitioner. Those distinctions are far less important than the vibrancy of the network.

There was no paper brochure.

Eric Winegardner, Monster’s ever-present public face, provided a great deal of support for the HREvolution conference. Grassroots shows are a perfect place to build (or rebuild in this case) a brand. His approach to the conference, which included financial support, prizes and a Sunday morning breakfast, should be the textbook case study about grassroots brand development.

That sort of thing simply isn’t possible at the Bersin event where formality is as important as informality is at HREvolution.

So, one week with two extremely complementary events. If you were betting on money and deal flow, you’d head to the Bersin event. If you were building long term relationships with the next generation of leaders, you’d focus on HREvolution. Smart participants in the industry need to do both.

While each event could learn a lot from the other, it’s wonderful to have such clear extremes to choose from.