Is it just me or are coffee shops always cold?
I spend a lot of time in coffee shops for many reasons, not one of which is because I like coffee (I don’t). However, they are convenient places to meet clients and do business. The problem is that they always seem to be frozen.
It’s long been common for restaurants to lower the temperature to turn tables faster. If there is a parallel for coffee shops, it can not be about turning the tables. They want us there, don’t they? I guess at low room temperature, they push us to buy extra hot water that drips through the ground beans. Maybe you’re encouraging the behavior you want more of? That’s not a knock. One can argue that it is good business.
One of my clients recently shared how they were restructuring their compensation structure because part of their incentive pay was “not working anymore.” It was a good problem to have because once the monetary incentive became this standard, the incentive actually lost its meaning. So, that was basically absorbed, and a new flexible payment section is being introduced.
That is not an isolated example. In 2022 alone, I’ve had several conversations on compensation structure. Some are inflationary and tight labor market pressures. Others are related to non-financial benefits and creative ways employers can offer relevant and meaningful terms of employment. As in the previous example, a couple are targeted efforts to engineer a comp structure that rewards individual and company performance.
I want to be clear: I am not a compensation expert. Fortunately, I know a few that I can rely on when it comes to customer needs. But in these conversations I found myself in the strategic and critical thinking necessary for anyone evaluating their place in the market and the potential of their business model. Here are a few basics:
Does your compensation structure encourage the behavior you want? Often, they don’t think about what employers want and the structures that encourage that. W. Edwards Deming famously said, “Every organization is perfectly designed to achieve its desired results. That includes your comp plan. Some seek collaborative work and shared outcomes. Others seek to measure internal competition. The same comp plan doesn’t work for both. One step further: Look at the shadow behavior you don’t want. That team structure can reward someone who doesn’t row in a boat. The competition you want can be reduced to unhealthy competition.
Benefits do not benefit everyone equally. I did not do this; But I wish I did. A material component of total comp is the cost to the employer to provide certain benefits. Still, I promise that your people will get a lot of real value from the benefits you provide. I don’t know if a company can fix that, but they can consider the relevance of what they are offering to the public. The result is a growing trend toward a “cafeteria” approach that puts more choice in people’s hands.
are you listening Any company’s concerns are falling on deaf ears because they are not too extreme. The truth is that there is market volatility in the game, and even if you don’t have to follow the same thing, you will always compete. And there are things you can do to set yourself apart. With great interest, I recently read the results of the NOARK 2022 Compensation and Benefits Survey. This is one example of a strong regional resource that can help you listen.
Final thought: A few years ago, I was at a new board meeting, and I asked a question to which the answer was, “We’ve never done that.” I politely point out that while that may be a valid statement, it is hardly a good answer to the question. So is our need to evaluate our existing systems and whether they are (still) working for us the way we want them to be.
Chuck Hyde is the founder of C3 Advisors, which specializes in executive development and talent acquisition. He can be reached www.c3adv.com. The opinions expressed are those of the author.