What's Wrong With This Picture?
DISMISS GOVERNMENT and
LARGE CORPORATE MODELS
The compensation model I'm concerned about doesn't include
either the Federal Government or large Corporate models. Both are untenable,
inexcusable and unlikely to ever be changed. People that end up in government
cannot relate to entrepreneurs and vice versa. Bureaucrats rely heavily on the
success of the entrepreneur but have absolutely no concern or an interest in
what drives the entrepreneurial spirit that results in a small to mid-sized
business compensation model to begin with.
Large corporations are led by very smart, well educated
people. Publicly-held corporations tend to be governed by Boards of Directors
who create compensation models for those in the very top-tier as well as
generous remuneration 'stipends' for fellow board members. They may comply with corporate law and
government regulations but show a disdain for shareholders and more importantly,
the hard-working folks 'downstream.'
Those just part-way downstream within the large corporate
model may not be particularly fond of what they do for a living but have
resigned themselves to the task of gaming the system, navigating upstream through
a maze of challenging pay-grades structured by a sophisticated HR department.
Statistics indicate that in either of these large systems a
vast majority of the employed are not particularly happy or motivated to do
anything more than what is defined for them to do. With the stroke of the keys
in front of me then, I dismiss these for reasons that should be obvious. I have
little hope that either is going to change.
I am much more concerned about the compensation models that small
to medium-sized, privately-owned companies must create in order to retain
talent and in the end, sufficiently reward the entrepreneur who has taken the
risk to do so. This cannot happen if such an entrepreneur were to borrow from
the government or large corporate models
THE OWNERSHIP MODEL
Ownership brings with it a great many things, good, bad and
ugly. Genuine entrepreneurs have to keep going, get up after getting knocked
down, and start all over again, if necessary. They go off the rail, however, if
they begin to think that the company owes its success to them alone and the
compensation model gets all 'skewed up'...to the top of their org chart.
Don't get me wrong, it is my firm belief that entrepreneurs,
business owners and those who owners appoint as leaders should be compensated
handsomely for what they accomplish. The challenge of the day happens to go far
beyond that.
Let's assume the statistics we're aware of that suggest the
greater number of people working in these companies are feeling unappreciated,
without serious challenge and little accountability are undeniable. That means
a good number of people are restless, unhappy and unfulfilled.
The question to
ask of the person most dependent upon their productivity is;
"Do you know
who these people are?"
Every now and then employers are blind-sided when what they
believed was a happy, highly productive direct report or second-tier manager
leaves for greener pastures. What we've learned is that this happens for a
variety of reasons with money rarely being the predominant influence in the
decision.
Among several studies that have crossed my screen recently,
Laura Entis at INC.com cites one commissioned by Dale Carnegie ( @DaleCarnegie
) through MSW that reinforces the notion that compensation models call for more
emotional currency than leaders tend to think necessary. The study, as others
I've seen, reinforces the reality that 29% of employees are fully engaged, 26%
are disengaged and the big bunch in between are "putting in the minimal
amount of effort to achieve expected results."
The study goes on to indicate the real cost to business as a
result is $11 billion a year. Worse, in my estimation, is that with this in
mind, small to mid-size companies are no better off than the government or
large corporations when it comes to creating complete compensation packages. To
make matters worse, company leaders, in many cases, have no one to blame but
themselves.
COACHING TO SUSTAINED PROFITABILITY
It should be clear by now that small and mid-sized companies
have a distinct advantage over their government and large corporate competitors
when it comes to finding and retaining talent. What many leaders have so much
difficulty with though is coming to grips with how vital it is to develop their
coaching and leadership skills. I haven't met a business leader yet who
wouldn't rather work On the
business rather than In it.
That's easier said than done, especially for one who may
have started the business, has performed every function necessary and has
subconsciously overlooked the need to shift gears and simply learn to lead the
team they've assembled. Any who have, at one time or another, participated in
an effort that led to good results by a wise coach or leader knows what's it's
like to experience the compensation
of satisfaction.
As it turns out, the very best compensation models in force
today, yes, must be monetarily competitive, but to a far greater degree must be
associated with a working environment or culture wherein the leader leads. The
most successful organizations, with the most competitive compensation models,
are those that get it and do it. And, guess what? If you are the one in that
position and understand what this means, your employee engagement quotient will
soar. Your profits will be sustainable and as the word gets out, talent will
come knocking on your door rather than walking out through it.
Jim Naleid
is a Life-long Entrepreneur,
Change-Agent and Thought Leader, Managing Director of Naleid & Associates
and Regional TEC (“The Executive Committee”) Chair leading a
group of executives to become Better Leaders, Making Better Decisions with
Better Results. http://www.linkedin.com/in/jimnaleid
No comments:
Post a Comment