Compensation Strategies Blog

  • Seize the Opportunity to Secure Top TalentSeize the Opportunity to Secure Top Talent
    Over the past few months, the business community has experienced a flip in talent demand unlike anything it has ever seen before. In January, there were more jobs available than people to fill them. The scarcity of skilled, educated labor was especially pronounced. Talented people were in demand and could essentially name their price when making a career move. Then COVID happened. In a period of approximately 90 days, our country went from record employment to ...
  • Is Incentive Compensation Viable in an Uncertain Economy? (Part Two)Is Incentive Compensation Viable in an Uncertain Economy? (Part Two)
    Last week I wrote about how the COVID economy has brought business leaders face to face with the flaws in their pay strategies. That experience has left many wondering what should happen going forward—and whether incentive plans should play a larger or a smaller role in their rewards approach. I asked the question: Should you even offer incentives in an economy as uncertain as this one? The answer was “yes,” because what is needed in ...
  • Is Incentive Compensation Viable in an Uncertain Economy? (Part One)Is Incentive Compensation Viable in an Uncertain Economy? (Part One)
    Chances are, the COVID economy has brought you face to face with flaws in your pay strategy. When the lockdown hit, compensation became the enemy of cash flow and (perhaps) the cause of layoffs. Its “expensiveness” became a serious problem virtually overnight. Now you are most likely wondering what should happen going forward—and specifically whether incentive plans should play a larger or a smaller role in your rewards approach. Should you even offer incentives in an ...
  • Should you hire a Compensation consultant?Should you hire a Compensation consultant?
    Okay, first things first. I suppose it might seem odd and even a bit self-serving for someone who is a principal in a compensation design firm to offer advice about engaging a pay consultant. However, given the hundreds of companies that have engaged VisionLink over the past 20 years, the reality is I have much “real life” experience with those who were ready for a pay consultant when they hired us and those who ...
  • What is the “Job” of Compensation in a Coronavirus Economy?What is the “Job” of Compensation in a Coronavirus Economy?
    A few years ago, Clayton M. Christensen (the late Harvard Business School professor and author) introduced a concept he called the “Theory of Jobs to be Done.” This is how he explained it: “When we buy a product, we essentially ‘hire’ something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if the product does a crummy job, we ...
  • 3 Secrets to Managing Compensation in a Covid-19 Economy3 Secrets to Managing Compensation in a Covid-19 Economy
    Chances are, you’re looking at your P&L these days and noticing just how large the compensation number is. In fact, it’s likely created a pit in your stomach—probably the size of a boulder. Bottom line, all logic says you need to lower than expense, no matter what. Well, not so fast. We suggest you take a deep breath before doing anything too drastic. In truth, treating pay strictly as an expense to be downsized might ...
  • 7 Keys to Managing Your Pay Strategy in a Recession7 Keys to Managing Your Pay Strategy in a Recession
    To state the obvious, uncertainty is the only certainty for the foreseeable future. It’s an unusual time and I know we’re all hoping for the best. Unfortunately, the business forecast (not to mention “real-life”) suggests we’re headed for significant economic turbulence. So, this may be a good time to talk about how to approach your compensation strategy should a recession result from current conditions. In reality, these principles apply to any economic cycle, but they ...
  • 3 Compensation Mistakes that Kill Employee Motivation3 Compensation Mistakes that Kill Employee Motivation
    You have hired good people. You believe your business model is sound. Your strategy is solid. You think you pay a “fair” wage. You allow people flexible hours and they can work from home when necessary. They can take as many vacation days as they want as long as their work gets done and they participate in an above average benefits package, including some things your competitors don’t offer. But ...
  • Is the Year-End Incentive You’ve Promised Giving You Nightmares?Is the Year-End Incentive You’ve Promised Giving You Nightmares?
    “Tis the season” to figure out how much bonus your employees are going to earn this year, is it not? For some of you, that’s not a big deal. You have a formula and your people will be paid a benefit accordingly. However, I suspect others of you are lying awake at night trying to figure out how much you’re going to share. You don’t have a formula, your plan is ...
  • How a Long-Term Incentive Plan (LTIP) Prevents Bad ProfitsHow a Long-Term Incentive Plan (LTIP) Prevents Bad Profits
    Are all profits created equal? No, they are not. Some are good and some are bad. Years ago, in his book, The Ultimate Question, Fred Reichheld made the distinction: “Too many companies these days can’t tell the difference between good profits and bad. As a result, they are getting hooked on bad profits. Whenever a customer feels misled, mistreated, ignored, or coerced, then profits from that customer are bad. Bad profits come ...
  • The Difference Between Attracting and Recruiting Top TalentThe Difference Between Attracting and Recruiting Top Talent
    Every company wants to hire great people. But not every business has the same level of success in their attempts to do so. In fact, most organizations work hard at developing recruiting strategies for securing top talent, but see little fruit for their efforts, while a select few seem to be able to attract more quality applicants than they can possibly hire. So, what accounts for this dichotomy? Why are some organizations able ...
  • 3 Rules for Linking Pay and Performance Management3 Rules for Linking Pay and Performance Management
    Businesses in virtually all industries have initiated significant renovations of their performance management systems in recent years. Gone are the rigid employee appraisals at year end. In their place are flexible, future-facing tutoring and coaching methodologies. The focus now is on helping employees develop and succeed in the hyper-change environment all companies are experiencing. These changes have not come without growing pains, however. And one of the biggest sources of pain is ...
  • 3 Expectations CEOs Should Have of their Company’s Pay Strategy3 Expectations CEOs Should Have of their Company’s Pay Strategy
    Most chief executives have growth ambitions for their businesses that are unfulfilled. Seldom do they think their companies are achieving their full potential. This feeling is exacerbated by the pressure these leaders feel to perform well against the intense competition they face. Their frustration is heightened when the people around them don’t exhibit a shared vision of the company’s future or an equal commitment to its fulfillment. One of the primary reasons this ...
  • What Motivates Employees?What Motivates Employees?
    There is certainly no scarcity of studies you can read that attempt to explain what motivates employees. And those studies have been commissioned largely because every business leader in the world wants to know the secret to getting his or her people fired up about driving company growth. However, my observation is that often the best way to resolve some enterprise “mysteries” is to simply apply a little common sense. And when ...
  • What’s the Right Balance Between Salaries and Incentives?What’s the Right Balance Between Salaries and Incentives?
    I once had a phone conversation with a CEO of a company who ultimately became a client. He was baffled why he was not getting great performance from his top employees. “My strategy was to attract the best talent by paying salaries at the 90th percentile of the market. I assumed that by attracting great people, performance would just naturally follow. It hasn’t happened. Why not?” This chief executive’s reasoning seems ...
  • What kind of employees should you be recruiting?What kind of employees should you be recruiting?
    If you lead a business, you likely have a good sense of what your company can achieve. But you recognize that your vision cannot be realized if you’re be the only one who holds it and is passionate about it. You need people around you who are as committed to its fulfillment as you are and possess the wherewithal to make it happen. Beyond that, they must have unique abilities—skills, experience, foresight, ...
  • Why CEOs Must Assume More Responsibility for CompensationWhy CEOs Must Assume More Responsibility for Compensation
    It used to be that chief executives could delegate compensation-related issues to HR. Most of the work was formulaic and those in human resources were competent enough to conduct market pay studies, come up with reasonable bonus plans and make sure the company offered adequate benefit and retirement plans that didn’t cost too much. This level of delegation is no longer viable. “Reasonable” and “adequate” are no longer good enough. Compensation ...
  • 3 Ingredients Your Pay Offer Must Include to Recruit Top Talent3 Ingredients Your Pay Offer Must Include to Recruit Top Talent
    People who have unique abilities and understand the current state of the talent market know they are in a strong negotiating position when being wooed by potential employers. As a result, many business leaders assume they must offer a high salary and other perks to secure those people. But that’s not necessarily the case. Let’s talk about what top talent is really looking for when it comes to pay. In recruiting employees—especially high ...
  • 3 Reasons to Pay Attention to Employee Engagement3 Reasons to Pay Attention to Employee Engagement
    To “set the table” for this discussion, please allow me to share some data.  These statistics compare the results of companies that invest in their employees’ experience with those that do not.  The study shows that  businesses making that investment have an employee growth rate 1.5 times higher than those that are not.  Employee pay is also 1.5 times higher.  Their average revenue is 2.1 times higher.  Their average profit is 4.2 times higher. Their ...