Usually the drive for pay for performance comes from the top of the company. “We need to have people be more productive.” “I don't want to have to pay people that much, unless they are REALLY doing a great job.” While these are valid concerns, we must be able to better define what people do that makes a company successful.

Round and round it goes, where it stops, everyone knows. Lately, I have been wondering what it will really take to change things in the world of compensation. It would seem that we have more than enough motivation to result in real changes to compensation practices that have been ineffective, or worse, seemingly forever. There seem to be enough incentives to create more successful companies and pay people in a way that allows them to have better lives. A large number of Human Resources and Compensation professionals seem engaged enough to give them the push to make materials improvements. But the hamster wheel keeps squeaking.

It’s been a hairy year and it’s time to get out the combs and brushes. Break out your good scissors and clippers. I hate to be the one to tell you, but your compensation plans have “COVID-hair.” We get it. t’s been six months since the last time you sat in the chair of a professional and had your ‘do done. It may have been that long since the last time you covered your roots with someone other than an off the shelf solution.

Anyone who has taken a class or performed a Google-search on performance goals has learned about the concept of “SMART” goals. The most common breakdown seems to be: S - Specific, M - Measurable, A - Attainable, R - Relevant, and T - Time-bound. We all seem to know this and yet many still seem to have problems creating successful pay for performance programs. I would like to propose a new D.U.M.B. approach that celebrates the spirit of insanity.

Equity is a term that has become a keystone in the world of compensation. We use it in a wide-ranging list of topics including stock-based compensation, pay transparency, gender, and race. I recently did a presentation about the topic titled “Three Buzzwords and One Truth. The buzzwords being fairness, transparency, and internal equity, the truth is the continued growth in variable (differentiated) pay.

As we move into the compensation planning season, I thought it was time for a quick reminder to focus on keeping things simple. Over-complicating the basics of pay, can make it impossible to successfully accomplish the most complex things. So many small and mid-sized companies work so hard to make base pay “perfect” that they have no time or energy to build effective short-term incentive plans or rational equity compensation plans.

Executive pay is often more like cooking than baking. You are beholden to the ingredients that are fresh at the time you perform the task. Data sets, like great veggies or herbs, are often only available in small quantities at certain times of the year. Some professionals thrive in this environment, loving the swirl of possibilities and the frequent changes that must still result in predictable success.

The reason the client needed help was due to one word…overhang. There was just too much overhang, and the company’s major shareholders said the overhang was already high as it was and adding more shares to the share reserve would only make it worse. The shareholders were right. The overhang was high and adding more shares would only make it worse.

This situation has played out hundreds of times and…

Sales compensation is both the easiest and hardest of incentive compensation. Pay must drive specific behaviors, but it needs to avoid unintentional bad behavior. It must align with success at many levels, but provide ease of alignment for each individual. It must be easy to understand, but flexible enough to adjust to critical unpredictable factors. It must be painstakingly exact, while giving everyone some wiggle room to pay as required. Everything about sales compensation design is a compromise.

Equity compensation is an area where many compensation professionals lack confidence on even the most standard of programs. ISOs, Non-Quals, PSUs, RSUs, ESPPs are pretty much the extent of most programs in the U.S. From a management perspective these programs are a bit like computer worms or viruses. They have tentacles that stretch in securities law, employment law, corporate governance, valuation, accounting issues, monetary rules, and tax concerns. A simple change of employee venue can change any, and sometimes all, of these.

Pay compression is something that creeps up on you… like wisdom teeth. It is easy to avoid with regular analysis and communication. But without this, it can be a sneaky problem. It’s not an issue for years, then all of a sudden it becomes the only thing you can think about.

Editor's Note: Classic insights from Dan Walter, via anecdote, on the power of exceeding performance expectations!

This is where many mid-stage high-growth companies find themselves on a regular basis. They have an innovative product and the core team for future success. The future is just beyond the horizon and the sunrise is just beginning to show. They have a business plan that requires a ton of new hires and a compensation philosophy or structure designed for the company they were a year ago.

The funny thing is getting that little cavity or other problem fixed quickly usually doesn’t hurt and lets you focus on better things down the road. Compensation programs can often be the same.

Your new compensation program is the car. Your roll-out communications are the first tank of gas. The rest is the story of nearly every new program in the world of compensation. Communication is often viewed as a maintenance item. In truth, it is an essential component that makes compensation…

While this seems like a pure HR issue, it is a compensation issue. Paying employees costs more than paying contractors. It’s a fact. Companies are increasingly focused on more aggressive profit margins. The concept of “gig workers” help solve this issue by allowing companies to grow without paying…

Editor's Note: Ever feel like things are a little backward pay program wise? You're not alone, friend! Dan Walter, master of the compensation metaphor, shines a light on the Classic problem we all face at one time or another - particularly those of us who work in or serve smaller, entrepreneurial organizations.

Just a few months ago the last compensation professional on earth was terminated by their corporate overlord. She sits huddled with her former colleagues at the location of the final WorldatWork conference at a Gaylord Hotel in one of those big conference cities that no one actually got a chance to see during prior events. Artificial Intelligence, or “AI” as it likes to call itself, has taken over and made these once-proud CCPs, GRPs and LMNOPs a bygone memory of different times.

For several months many of us have wondered why base pay wasn’t spiking upward out of respect for the historical strong job market. The basics premise of our economy is the strong demand and short supply results in high prices. This is true for peaches, cars, and people. With unemployment at very low levels and a job market continuing to create jobs at a rate of 210,000 per month, we should have been seeing pay rise far faster than our now sad 3% annual increase. It turns out the trickster was simple math.

Editor's Note: You thought hybrid jobs were a challenge! Welcome to the age of the duckbilled platypi. Armed with this Classic "hunting guide," Dan Walter encourages us to embrace and rise to the challenges of today's unique (and often, as a consequence, critical) roles!