Comp Policies? They’re for the Other Managers, Not Me

And to make matters worse, compensation policy-making and enforcing has gotten harder, says Greene, CEO of Reward $ystems Inc., in Glenview IL. Greene’s remarks came at the recent 2011 World at Work Conference in San Diego.

Why is policy making tougher today?

• People are more mobile, and they’re onsite and offsite
• Critical skill shortages exist even while unemployment is high
• Organizations are staffing at lean levels
• Job descriptions are not all inclusive
• People alter their jobs “in place”
• Work-life balance has become more prominent

What is the impact?

• Managers are trying to manage on the fly
• Employees are negotiating their situations on a transactional basis
• Employees are more likely to be comparing themselves to others
• Diverse workforces want and expect different things from their organizations
• Rewards strategies have become more complex

What are policies? asks Greene. It varies from organization to organization. They may be rules ( rigid prescriptions, similar to laws), guidelines (requiring interpretation), or merely aspirations and good intentions (rarely realized).

In any case, policies tend to grow from corporate philosophies. Greene offers two compensation guide charts to illustrate the difference between philosophies and policies. (Philosophies, he says, guide through principles, while policies tend to be more rule-like.)

Finally, a simple but comprehensive guide to wage and hour. Correctly apply the FLSA, remain the go-to expert with BLR’s comprehensive guide. Save hours of research time.  Go here for information or to order Wage & Hour Compliance: Practical Solutions for HR

Guide Chart as a Philosophy

Place in range → Performance Rating ↓	Lower Third Of Range	Middle Third Of Range	Upper Third Of Range
Outstanding (10%)	$$$$	$$$	$$
Exceeds Standards (30%)	$$$	$$	$
Fully Meets Standards (55-60%)	$$	$	None
Does Not Fully Meet (0-5%)	None	None	None

Guide Chart as a Policy

Place in range → Performance Rating ↓	Lower Third Of Range	Middle Third Of Range	Upper Third Of Range
Outstanding (10%)	7% BPI 6% CA	5% BPI 6% CA	3% BPI 6% CA
Exceeds Standards (30%)	5% BPI 3% CA	3% BPI 3% CA	1%BPI 3% CA
Fully Meets Standards (55-60%)	3% BPI 0% CA	2% BPI 0% CA	1% BPI 0% CA
Does Not Fully Meet  (0-5%)	0% BPI 0% CA	0% BPI 0% CA	0% BPI 0% CA

Wage and hour lawsuits are expensive—and easily prevented. Here’s how to protect against crippling judgments. Go here for information or to order Wage & Hour Compliance: Practical Solutions for HR

Another reason that policy-making dealing with the diversity brought on by globalization:

• Organizations have spread operations across national borders (went to the world)
• People have come from all over to seek employment (the world came to them)
• National/ethnic culture will have a profound impact on how policies will be viewed and how they will work

Cultural Issues

We need to be knowledgeable about differences in perspective when we operate globally, says Greene. He suggests paying attention to the “three Rs” of cross-cultural issues:

• Recognize differences
• Respect differing perspectives
• Reconcile the issues caused by cultural differences

The Trompenaars model is very useful for considering cultural differences, Greene says:

• Individualistic vs. Collectivist (Is everyone treated the same?)
• Universalistic vs. particularistic. (Do rules apply uniformly or are they impacted by who is involved or by the circumstances?)
• Low vs. high acceptance of power distance. (Is authority deferred to, with little or no willingness to deviate on part of managers?)

For example, says Green, look at how performance is rewarded:

• What factors are used to measure performance? Are they focused on individuals or the group/unit?
• Do managers communicate appraisals directly and honestly?
• What circumstances impact whether the employee is held accountable for the results?
• Are award pools distributed in egalitarian manner or based on individual contributions?
• How much local discretion is given in defining, measuring and rewarding performance?

In tomorrow’s Advisor, Greene on the intriguing question of “i-deals” — that is, special deals for individual employees — plus an introduction to a trusted program for eliminating wage and hour mistakes and miscues.