How is compensation like a cupcake? There are some surprising similarities, says Dan Walter, President and CEO of independent consulting firm Perfomensation. His curious comparison originally appeared at Compensation Café, where he argued that the most important thing to consider is the difference between frosting and icing.
First, look at the following compensation trouble points:
- Generic plans created from stale boilerplate documents
- Ineffective communication programs
- Difficult-to understand sales bonus legalese
According to Walter, all of the above suffer from the “icing on the cake excuse.” What does that mean? For that answer, we must first distinguish between frosting and icing, says Walter.
Icing, he argues, is used to make flowers and bows and those delicate piping decorations that draw our attention. The purpose of frosting, however, is different. While it can look good, it also helps to fill-in or cover up a cupcake’s deficiencies, and moisten the cake’s bland foundation. Icing is never necessary. Frosting is a must.
The most common mistake people make is classifying important dimensions of our compensation plans as “icing.” It would be nice if everyone understood the purpose and potential of complex compensation BUT…! That’s just wrong, says Walter. If you fail to account for a program’s underlying drivers of success, you’re not leaving off the icing, you’re leaving off essential frosting.
“In our attempt to navigate the increasingly complex world of compensation, we often forget to finish our cupcake. Is it any wonder that our employees are not interested in eating it?”
So what should we do? Walter’s advice is to spend the additional hours or money it takes to “frost” your compensation plans before doling them out. “If we approach compensation like cupcakes,” he says, “we may find that our employees line up for more, rather than complaining about whatever they get.”