When we have the opportunity to talk with executives and managers about their compensation programs, it can be surprising how many don’t understand the complete picture. While they are usually well-versed in the plan mechanics, such as metrics and targets, they are often in the dark when it comes to the broader rationale behind the overall pay structure.
This suggests that senior leadership may not spend enough time in direct one-on-one communication with executives and managers explaining not only what they are paid, but why the plan is structured the way it is. We believe that by shortchanging these critical conversations, the company is missing a tremendous opportunity to reinforce the organization’s strategy and priorities that are embedded in the pay programs, and the role that each executive and manager plays.
- Prioritizing the conversation by setting time aside to do it right and allowing time for two-way conversation.
- Knowing enough about the person to anticipate her/his point of view and possible questions.
- Crafting a big-picture story that the senior manager can recognize and understand.