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September 14, 2010 / W. Stanton Smith

Authenticity and Compensation Pressures

A frustrated boss once said to me, “What’s the purpose of annual raises? Why do we spend so much time on something which in the end seldom pleases and most certainly irritates everybody?”

I had just informed him of the feedback we’d received on a salary increase program which was highly competitive; the feedback was at best characterized as “what we expected” and at worst as “another sign of the gap between how valuable you say we are and how you treat us”.

Pay as a relationship band-aid

Photo by Pip Ha Taylor

What I learned from directing the compensation programs of two major professional service firms is that most of us rely on pay to make up for unsatisfactory relationships with the boss, and/or working too many hours without recovery time year after year. Pay level has to do with market value but true recognition which satisfies comes from a boss really valuing those who report to him/her.

How did you feel?

The saying goes that I may not remember exactly what you said to me but I do remember how you made me feel. In other words managers need to reflect on how genuine their concern for their reportees really is. And this doesn’t mean being “nice”. It means acting in ways that show you really want to help them progress.

When your reportees believe that you are authentic, then a lot of pressure is taken off compensation as the “fixer” of on-the-job problems. This permits compensation to be seen more clearly as a way to recognize market value both today and over a longer period of time.

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