I
just returned from a conference where “culture” was the buzzword. Over
and over industry professionals stressed that your compensation plans
must be designed to match your culture. But, what if your culture is
exactly what is killing your pay for performance?
In June, nearly a year after the crash of Asian flight 214 in San
Francisco, the NTSB will hold a hearing to determine the cause of the
deadly accident. But, we already know much from the interviews of the
co-pilot that were conducted shortly after the tragedy.
The co-pilot didn't wear sunglasses because it would have been
impolite since the pilot (his senior officer) had not chosen to wear
them. Another co-pilot didn’t feel comfortable demanding a correction
until too late, because he deferred to the other, more senior, cabin
members who said nothing. The culture in the cockpit was designed to
work when everything went right, but did not support things going wrong.
It has been said that the most dangerous thing that can be said in an
office is, “We've never done it that way.” I would argue even more
dangerous is the simple response, “OK”. Agreement when knowing something
else would be a better option seldom leads to anything good. But, the
biggest offender is silence in the face of a challenging moment. When
people are too intimidated or disinterested to speak freely, the support
you believe you have is in fact absolutely nothing.
Pay for performance depends as much on correction as it does on cheerleading. A culture that does not support ideas and change is highly unlikely to be successful over the long term.
Pay for performance requires companies to have an interactive form of communication.
People must know how and when to ask for help. And, they must know that
this is not a sign of weakness but a sign of understanding limitations
and working to improve them for the greater good of the
organization.
Pay for performance requires a genuine belief by executives that performance (not just productivity) matters.
This belief, or lack thereof, will trickle down through the entire
organization. It is either fuel that keeps the fires of performance
burning or glue that eventually stops everything from moving.
I’d love to discuss examples of how a culture got in the way of
compensation programs or even better, how a culture helped turn an
average compensation program into a potent driver of success. How does
your company culture support or deter performance?
Dan Walter is the President and CEO of Performensation
a firm committed to aligning pay with corporate strategy and culture.
Dan is working with fellow Compensation Café writers, Ann Bares and
Margaret O’Hanlon on a new ebook on communication to be released very
soon. Meet Dan in May at the upcoming GEO Conference and World at Work
Conference and in June at the Silicon Valley NASPP Conference where he
will be the Keynote speaker. Dan is a co-author of several books
including “The Decision Makers Guide to Equity Compensation”, “If I’d Only Known That”, “GEOnomics 2011” and “Equity Alternatives.” Connect with him on LinkedIn or follow him on Twitter at @Performensation and @SayOnPay.