The Overture Group is an executive search firm with an additional specialty in compensation consulting. We recently heard a presentation by Bob Lindeman and Mark Reilly, both managing directors of that firm. They reminded us that compensation is (or should be) a strategic issue, not a simple, tactical, what-are-we-gonna-pay-this-person issue. And our strategy should consider
Compensation is an equity issue.
In American business, an individual’s compensation package, particularly among managers and sales people, frequently includes an incentive component. An example might be a manager who is paid a base salary of $75,000, but is able to earn an additional $25,000 if he or she is able to achieve certain goals or outcomes. The proposition is,
Do we live to work or work to live?
Americans work hard . . . at least they work longer hours than their counterparts in the world’s largest economies. On average, an adult fulltime worker in this country works 47 hours a week. If you filter out hourly workers and consider only salaried workers, that number rises to 49 hours. Four in ten of
Unlimited paid vacation? Are you kiddin’ me?
Some companies, both here and abroad, are experimenting with unlimited vacation, or “discretionary time off” as it is known in HR circles. And we’re talking about paid time off, not unpaid leaves of absence. Sounds crazy, doesn’t it? What’s to prevent someone from heading for the beach and never coming back? How are we supposed
WIIFM? Huh?
As human beings, we are all creatures of motivated self-interest. That’s right, we are all egocentric. Sounds pretty cynical, doesn’t it? But it’s not. It’s just the way we’re wired and the way we make decisions. Should I do this or that? Should I pick A or B? Should I turn left or right, or
“Compensation is an equity issue. People want to know that they are being compensated fairly compared to others doing similar work within the company, and to others doing similar work in other companies. After that, it’s a non-issue.”
It really is that simple, yet we continually find ways to complicate the situation. For example, let’s say we’ve got two employees, Bob and John. Bob has been with the company for 20 years, John for only 18 months. They both do the same work and do it equally well. In many cases, Bob would
