Icing is Nice, but Frosting is Essential (Compensation is like Cupcakes)" - Dan Walter via Compensation Cafe

Icing is Nice, but Frosting is Essential (Compensation is like Cupcakes)

How is compensation like a cupcake? Is it just that people crave it,
or is it something far more fundamental? I’d like to suggest that it is
in understanding the important difference between frosting and icing.

Think about generic plans created from stale boilerplate documents.
Or, communication programs which teach little and inspire nothing beyond
high-level overviews or lengthy legal documents. Or, even sales
compensation plans promising commissions and bonuses, but don’t drill
down into the true cause and effect of the sales process. These are
examples of programs plagued by the “icing on the cake” excuse.

My wife loves cupcakes and considers herself somewhat of a
connoisseur. Throughout her cupcake journey, I have studied the cupcake
more than I care to admit.  When creating the cupcake there are the
requirements and the extras. The obvious requirement is the foundation
made up by the cake. It can be comprised of a wide variety of substances
and one or multiple layers.  The common extras are the icing
decorations that give the cake its unique character.  These are usually
flowers, designs and piping that are strategic placed and serve the
purpose of making the cupcake pretty and personalized.

However, there is confusion regarding the not-so-obvious essential,
which is the frosting.  Frosting is the layer that is part of every
bite. While frosting does look good, that’s not its true purpose. It
helps fill-in or cover-up a cupcake’s deficiencies. It moistens the dry
and sweetens the bland cake foundation.

I recently spoke to a friend about the stock options her company
offers. We spent 10 or 15 minutes discussing the plan. We talked about
how and why stock options work and some of the risk reward scenarios
that can unfold. We also discussed how her options could have value. At
the end she said, “These are great, why doesn’t my company want me to
understand them?  What’s the downside for them?” I responded, “I am sure
they want you to understand them, but sometimes that part of the
equation is seen as icing on the cake.” I realized immediately it was a
terrible metaphor.

Icing is something a cupcake can live without. Understanding the
purpose and potential of complex compensation is far more like frosting.
Without it your programs simply won’t work. A sales compensation
program must fully account for the underlying drivers of success. A
generic plan is like a carrot cupcake without the cream cheese frosting.
In other words, it looks like health food, not dessert. 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?

Spend the additional hours or money it takes to finish things up and
frost your compensation plans.  We might not always have time for the
pretty icing flowers and trim, but that does not give us an excuse to
skip the frosting. When we’re busy we sometimes make ourselves feel
better by reclassifying essentials as “icing” or “nice to have”; when
they are truly “must have.” If we approach compensation like cupcakes,
we may find that our employees line up for more, rather than complaining
about whatever they get.