In yesterday’s Advisor, consultantsMyrna Hellerman CCP and Jim Kochanski discussed how Big Bang companies broke out of sameness; today, their take on carve-outs and promotions, plus an introduction to a unique 10-minutes-at-a-time training system for your managers and supervisors.
Hellerman and Kochanski, who are Sr. Vice Presidents at Sibson Consulting, offered their tips at WorldatWork’s Total Rewards Conference and Exhibition, held recently in San Diego.
Promotions as Performance Reward
Big Bang Companies manage promotions and the accompanying promotional increase as a key reward for high performance, says Hellerman.
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Sameness |
Big Bang |
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Promotion is an entitlement |
Promotion is a reward for individual achievement consistent with needs of the business |
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No budget |
Rate of promotion budgeted and tied to business growth and turnover—no historic precedent |
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No tracking or reporting |
Tracked and reported |
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Few standards |
Clear standards |
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Approval process unclear |
Approval process and period clear |
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Key opportunity for favoritism |
Clear standards and process reduce or eliminate favoritism |
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Constant flow of job reevaluations to qualify for promotions |
Promotion to real job the business needs filled |
Big Bang Companies Execute Better
Kochanski notes that they have found that Big Bang companies do execute better:
- Pay plans and protocols are easy to understand
- Narrow discretion makes them hard to screw up
- Plan administration is automated
- There are formal consequences for poor execution
- 5 The real intention of the plans is supported by leadership
- Pay decision transparency creates possibility of public embarrassment
- The process fits with the business need and cycle
- The parameters are updated annually for business and market conditions
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Differentiation Through Carve Outs
“Carve outs” from merit and incentive pools enable Big Bang companies to differentiate rewards for high performers.
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Merit Example |
Annual Incentive Example |
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3% budgeted for increases |
22% average payout budgeted |
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5% carve out for high performers |
2% carve out for high performers |
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2.5% average payout for average performers (75% of population) |
18% for average performers (75% of population) |
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4.5% average payout for high performers (25% of population) |
26% for high performers (25% of population) |
Differentiation Through Cross Calibration
Big Bang Companies use cross calibration to increase visibility of ratings and pay actions among peer managers. This helps to ensure truly top performers are identified and rewarded. Calibration works because it gives leaders a chance to express their intentions, it provides transparency, and it may embarrass managers who are not compensating at recommended levels.
Want to Break Away?
If you decide to break-away from sameness and make business needs and business realities drive pay decisions, here are the first steps:
- Become well informed about the business’ performance imperatives from both an external and internal perspective
- Get a few leaders on board in areas that really want stretch performance
- Use multiple pay vehicles rather than trying to use one or two vehicles for everything
- Make pay actions transparent with calibration and scorecarding
- Create a two-year roadmap of design, execution, and leadership actions
Compensation, one of what, 20 things you need to train managers and supervisors on? Training is critical, but it’s tough to fit it in. To train effectively, you need a program that’s easy for you to deliver and that requires little time from busy schedules. Also, if you’re like most companies in these tight budget days, you need a program that’s reasonable in cost.
We asked our editors what they recommend for training supervisors in a minimum amount of time with maximum effect. They came back with BLR’s unique 10-Minute HR Trainer.
Train your line managers with BLR’s 10-Minute HR Trainer. There won’t be time for classroom boredom. Try it for free.
As its name implies, this product trains managers and supervisors in critical HR skills in as little as 10 minutes for each topic. 10-Minute HR Trainer offers these features:
Trains in 50 key HR topics under all major employment laws, including manager and supervisor responsibilities, and how to legally carry out managerial actions from hiring to termination. (See a complete list of topics below.)
Uses the same teaching sequence master teachers use. Every training unit includes an overview, bullet points on key lessons, a quiz, and a handout to reinforce the lesson later.
Completely prewritten and self-contained. Each unit comes as a set of reproducible documents. Just make copies or turn them into overheads, and you’re done. (Take a look at a sample lesson below.)
Updated continually. As laws change, your training needs to do so as well. 10-Minute HR Trainer provides new lessons and updated information every 90 days, along with a monthly Training Forum newsletter, for as long as you are in the program.
Works fast. Each session is so focused that there’s not a second’s waste of time. Your managers are in and out almost before they can look at the clock, yet they remember small details even months later.
Evaluate It at No Cost for 30 Days
We’ve arranged to make 10-Minute HR Trainer available to our readers for a 30-day, in-office, no-cost trial. Review it at your own pace and try some lessons with your colleagues. If it’s not for you, return it at our expense. Click here and we’ll set you up with 10-Minute HR Trainer.
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