Jeffrey Pfeffer
We know that educational credentials help predict salary. We know that gender and race help predict salary, even though they shouldn’t. We know that years of service, or seniority, helps predict salary, and there’s some evidence to suggest that years of service is one of the more important predictors of salary.
Gender, race, years of service, and educational credentials all have nothing to do with performance. … [ Read more ]
Content: Quotation | Author: Jeffrey Pfeffer | Source: McKinsey Quarterly | Subjects: Compensation, Human Resources, Organizational Behavior
How To Hone Your Compensation Strategy
Answering these questions will help you determine what’s working, what isn’t and explore options for a successful compensation strategy.
Content: Article | Author: Kent Plunkett | Source: Chief Executive | Subjects: Compensation, Human Resources
Money Isn’t Everything: The Dos and Don’ts of Motivating Employees
Dangling bonuses to checked-out employees might only be a Band-Aid solution. Brian Hall shares four research-based incentive strategies—and three perils to avoid—for leaders trying to engage the post-pandemic workforce.
Content: Article | Authors: Avery Forman, Brian Hall | Source: Harvard Business School (HBS) Working Knowledge | Subjects: Compensation, Human Resources, Motivation
How a “Pay-to-Quit” Strategy Can Reveal Your Most Motivated Employees
Companies often have a hard time determining how motivated or committed their employees are, because employees know it goes against their own interests to declare themselves unmotivated or uncommitted. The solution to this problem is for companies to put incentives in place that encourage employees to reveal how they actually feel. In this article, the author, a behavioral economist, describes an incentive plan that has … [ Read more ]
Content: Article | Author: Uri Gneezy | Source: Harvard Business Review | Subjects: Compensation, Human Resources, Organizational Behavior
Pay for Performance: When Does It Fail?
The consensus in social psychology is that monetary incentives for performance have a detrimental impact on individual performance. Yes, under certain specific and limited conditions, rewards can reduce performance. Yet pay for performance schemes are ubiquitous. How can we resolve this divergence between theoretical recommendations and observed practices? Nirmalya Kumar and Madan Pillutla recommend solving the problem by designing smarter incentives that avoid these detrimental … [ Read more ]
Content: Article | Authors: Madan Pillutla, Nirmalya Kumar | Source: Management and Business Review (MBR) | Subjects: Compensation, Human Resources, Motivation, Organizational Behavior
Nirmalya Kumar, Madan Pillutla
In order to understand the undermining effects of rewards, we must consider how the recipients are likely to interpret them. Specifically, the effects of a reward depend on how it affects the recipient’s perceptions of autonomy and competence. When monetary incentives interfere with an individual’s sense of autonomy or competence, they tend to decrease intrinsic motivation.
Content: Quotation | Authors: Madan Pillutla, Nirmalya Kumar | Source: Management and Business Review (MBR) | Subjects: Compensation, Human Resources, Motivation, Organizational Behavior
Ulrich Pidun, Sebastian Stange
In most firms, incentives are tied to company or business unit performance. The consequences of large investment decisions typically take too long to materialize to have an impact on an executive’s bonus or promotion. This can lead to moral hazard, especially when managers expect to move on after a couple of years in a position.
We recommend tying personal targets and incentives to the success of … [ Read more ]
Content: Quotation | Authors: Sebastian Stange, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Accountability, Compensation, Human Resources, Organizational Behavior
Sally Helgesen, Fred Kofman
The exclusive focus on monetary rewards inevitably leaves organizations fighting a fierce but losing struggle to balance individual and team results. Rewarding high performers serves the imperatives of accountability and excellence but can undermine alignment and cooperation among team members. Yet basing pay on team results in order to incentivize collaboration often ends up inadvertently rewarding subpar individual performance and penalizing individual excellence. Neither approach … [ Read more ]
Content: Quotation | Authors: Fred Kofman, Sally Helgesen | Source: strategy+business | Subjects: Compensation, Human Resources, Motivation, Organizational Behavior, Teamwork
Selina Lo
In my company, there is a rule that all new managers need to know: that it’s not a given that their people [under them] will be paid less than they are. That’s part of becoming a manager—that you really have to enjoy enabling people. I want people who are good managers to be managers. I don’t want people to become managers just because they feel … [ Read more ]
Content: Quotation | Author: Selina Lo | Source: strategy+business | Subjects: Compensation, Human Resources, Management
Gender Pay Gap: Valuing Women’s Work
A new study published in Nature Human Behaviour sheds light on the role of within-job pay differences in the gender pay gap.
Content: Article | Authors: Halil Sabanci, Marta Elvira, Paula Apascaritei | Source: IESE Insight | Subjects: Compensation, Diversity, Human Resources, Organizational Behavior, Women in Business
Meka Asonye
You get the behavior that your comp plan designs for. In the early days, I prefer to keep comp plans simple with two metrics, max. I also love plans that have a component focused on the entire customer lifecycle. For example, comping teams on bookings and retention can be a powerful way to ensure teams pursue the right users who will be longtime customers.
Content: Quotation | Source: First Round Review | Subjects: Compensation, Customer Related, Human Resources
12 New Approaches To Compensation
In an unprecedented time for attracting and retaining talent, CEOs and CHROs are getting creative—from three-day workweeks at full-time status to paid mental-health days to raised wages. Here’s what a dozen leaders told us they are doing differently.
Content: Article | Author: Dale Buss | Source: Chief Executive | Subjects: Compensation, Human Resources
Don Otvos
You always want to compensate your reps based on what they can actually control. You want to tie as much of people’s compensation as you can to things like “meetings set” or “demos given” — actual activities. When you’re at a startup, it’s hard to figure out what your quotas should be — there’s usually no precedent, so you throw a number out there, and … [ Read more ]
Content: Quotation | Author: Don Otvos | Source: First Round Review | Subjects: Compensation, Human Resources, Marketing / Sales
How to Identify — and Fix — Pay Inequality at Your Company
Companies who say they care about inclusion and belonging can start by paying employees fairly. To start, initiate a pay equity audit in which you compare the pay of employees doing “like for like” work (accounting for reasonable differentials, such as work experience, credentials and job performance) and investigate the causes of any pay differences that cannot be justified. Next, determine how you’ll remediate … [ Read more ]
Content: Article | Author: Amii Barnard-Bahn | Source: Harvard Business Review | Subjects: Compensation, Diversity, Human Resources
What if You Knew All Your Co-Workers’ Salaries?
Here’s how to do salary transparency right.
Content: Quotation | Author: Etelka Lehoczky | Source: Inc. Magazine | Subjects: Compensation, Human Resources, Organizational Behavior
Adam Bryant, David Reimer
A company’s most powerful cultural signals aren’t communicated by talking points. They’re determined by who gets promoted and who receives outsized rewards. Yet compensation and bonus frameworks in most organizations are still based almost solely upon financial results. In an effort to rule out subjectivity, such plans emphasize — and often focus exclusively on — achieving numerical targets. This oversimplified focus on the what of … [ Read more ]
Content: Quotation | Authors: Adam Bryant, David Reimer | Source: strategy+business | Subjects: Compensation, Human Resources, Organizational Behavior
Incentives for a Strong Leadership Culture
Three key pay and performance metrics can help define and influence an organization’s values.
Content: Article | Authors: Adam Bryant, David Reimer | Source: strategy+business | Subjects: Compensation, Human Resources
Bethanye McKinney Blount
Compensation is culture, period. It’s how you pay your people and it’s where the rubber hits the road. It’s the metric you can’t cheat. It’s naive to think that you’re just going to give people money and they’re not going to feel everything that’s attached to it. Pay is incredibly personal and emotionally charged. It directly affects how we live our lives and how we … [ Read more ]
Content: Quotation | Author: Bethanye McKinney Blount | Source: First Round Review | Subjects: Compensation, Culture, Human Resources, Organizational Behavior
Bethanye McKinney Blount
When you start talking about pay transparency, the first thing everyone thinks is “I’m going to know how much everybody makes.” I think a better way to frame it is “I’m going to understand why I’m paid what I’m paid and how I can increase my comp.” It’s about making sure employees understand their current reality and see a career development path in front of … [ Read more ]
Content: Quotation | Author: Bethanye McKinney Blount | Source: First Round Review | Subjects: Compensation, Human Resources
Research: Better-Managed Companies Pay Employees More Equally
Companies that implement more structured management practices pay their employees more equally. We found that companies that reported more structured management practices according to the Management and Organizational Practices Survey (MOPS) paid their employees more equally, as measured by the difference between pay for workers at the 90th (top) and 10th (bottom) percentiles within each firm.
Content: Article | Authors: Cristina Tello-Trillo, Melanie Wallskog, Nicholas Bloom, Scott Ohlmacher | Source: Harvard Business Review | Subjects: Compensation, Human Resources