I just realized that it has been two years since I published my first PHR/SPHR prep course. Time flies! Over that time I have had dozens of students use the course to help them prepare for, and pass, the certification exam.
If you are considering the PHR/SPHR and are having trouble staying motivated, keeping on track, and juggling all the terms and theories, then this could be the answer you’re looking for. I provide lessons via email and help you to stay on top of your studies with regular updates and helpful content to tie your learning back into your day job. Because in the end, it’s not just about getting certified, it’s about being a better HR pro.
If you’re interested in getting this for yourself or someone else, I have a discount running until Friday night for 20+% off. Coupon code is “GIVETHANKS” for those who want to take advantage of this. Here’s the link to the course.
If you are less than 12 weeks from your exam date, please email me and we can speed up the materials to give you time to finish.
Thanks, everyone, for your support! I’ll be sharing more fun HR/recruiting content very soon. Enjoy your holiday!
Last week I was talking with some folks about using compensation to drive employee behavior, and it occurred to me that I have never shared anything about that topic here. While I might not be the world’s foremost expert on the topic, I do have a few basic principles that I have relied on over time. The thing that I would like to note is that these apply to organizations of virtually any size. Even small companies (I’m looking at you, Mr/Ms HR Manager of a company with less than 250 employees) can incorporate these elements into their compensation planning without too much stress.
The other caveat I want to mention up front: money is not always a motivator for everyone. We want to instantly think that we can drive performance or discourage behaviors through monetary incentives. While that may be the case at times, it’s also worth noting that we humans are unpredictable creatures. That’s why motivation discussions are based on theory, not law. We have laws of physics. We have theories of motivation. Keep that in mind. If you implement something we talk about today and it doesn’t work, feel free to change it. It’s about finding what works for your organization and your people.
Everyone Needs a Variable Element
When it comes to compensation we have two basic elements: base pay and variable pay. Base pay is what someone earns as a condition of their employment. The fun comes when we start talking about variable pay, its elements, and how to use those pieces to really drive the behaviors we’re looking for in the workplace.
The most common area we see this in is for sales professionals. Base+Commission is the longstanding model, and it’s fairly easy to understand. What’s more difficult is figuring out how that sort of structure applies to other professionals, such as engineers, accountants, clerical staff, or even HR. How can you implement that?
A Few Types of Variable Pay
So, what types of variable pay might you commonly see? Here are a few:
Each of these types can be combined and/or configured in a wide variety of ways to target specific jobs, types of workers, and even company culture. Test, measure, and revise as necessary.
How to Afford It
One of the first hurdles I always face when it comes to getting management on board with a compensation change is pretty obvious:
Can we afford it?
The good thing about incentive compensation that is tied to performance metrics like sales or profitability is yes, you can afford it. Here’s a good illustration for how that works.
Imagine that your friend has a lemonade stand valued at $5,000 that you want to purchase. You could go out and get a loan for $5,000 to buy it, but that increases your risk (what if you don’t have the cash flow to make the payments?) and jeopardizes the future operation of the business. The smarter, and less risky, way is to negotiate a purchase price that comes from periodic payments of net profits. If your net profit runs $1,000 per year, you’ll pay for the business over five years, but you are not at risk if there is a downturn in the market–it just takes longer for the final payoff.
Variable compensation tied to business performance is the same thing. You are only on the hook for paying out when the business performance is good enough to cover the increased compensation costs.
This is identical to the fixed/variable cost discussion as it pertains to economics as well. Your fixed costs (base pay) will be there always. The variable costs/compensation will only be applicable if certain conditions are met. That, my friends, is how you afford it. You structure the incentives so that the growth in revenue/sales/profit/productivity/whatever-you-choose is enough to cover the cost of the incentive compensation.
This Hinges on Performance
If you haven’t already figured it out, this setup is going to require something that might not already be in place. We have to be able to properly measure performance for our staff in order to compensate them appropriately. If you’re not willing to measure performance and hold people accountable for it, then you might as well scrap this whole incentive compensation thing before you even start.
But if you are willing, then you need to try to find some objective metrics to tie into the jobs you’re trying to create incentives for. That’s a whole other discussion for another day, but in the initial planning and setup you’ll need to determine those performance objectives, because those are the basis for who earns variable compensation, how much they earn, when they earn it, etc. This is important, because you have to be offering incentives for the right thing.
It’s easy to focus on rewarding people for following the process instead of rewarding them for actually achieving the desired results. Be careful about that common trap.
If you can shorten the distance so employees have more control and a shorter reaction time, the rewards will be more meaningful.
Money Isn’t Everything
As I wrote about a while back, there are some great things that motivate people at work other than money. Sometimes it’s easier to assume money will work in all cases, but it’s often a more complex arrangement of details that ultimately drives people to do (or not do) things at work.
Do you currently use incentive based pay? How is it working for you? What types of positions do you use it for?
Think about it. If I’m training you on how to change a bicycle tire and then I set you in front of a bus, that training wasn’t very useful. It didn’t mirror real life. It wasn’t realistic.
If I train you on how to change a bus tire indoors on a smooth surface with all of the proper tools at hand, you’ll be more likely to be successful if you have to put that skill into practice.
However, if I ultimately train you to change that tire complete with all of the environmental factors (outdoors, possibly on a road shoulder surface, angry customers staring down at your back, etc.) in the mix, there’s a greater chance of success overall.
As you might imagine, this applies in the workplace as well. In the short video below I talk about simulating real life in both training and recruiting/selection. Subscribers click through to view.
If you’d like to read the rest of the article and learn three questions to ask yourself about your training as well as a shocking statistic behind aircraft pilot training, you can do so at the Brandon Hall Group blog.
Today the focus will be on the value of a long term commitment to a career within the restaurant industry. Check out a few of the facts:
Lifelong careers in the restaurant industry are not uncommon. 70% of restaurant employees plan to stay in industry until they retire.
This is shown in the fact that the median tenure of restaurant management and business operations employees is 20 years in the industry.
A job in the restaurant industry pays off: 71% of salaried restaurant managers, 50% of salaried shift/crew supervisors and 47% of salaried chefs/cooks earned a bonus in the past year.
In a time when many are worried about long term job stability, I think it’s a powerful testament to the long term value of these professions for 7 out of 10 employees to want to remain in the industry until retirement.
In addition, when many corporate employees are facing limited (if any) bonuses, the fact that 47-71% of restaurant employees received some bonus in recognition of their efforts is pretty astounding. The one that most stuck out from my point of view is the manager group receiving more bonuses than other staff–that’s yet another inspiration for the other employees to aspire to a higher level of leadership.
In the infograpic below titled “Dedication Pays Off,” you can see these and other statistics that prove the long term value of a career within the restaurant field.
This will be a long post and possibly only of interest to those who attended or follow the HRevolution happenings. If you think this will not be interesting or applicable to you, I’d read some before you bail. :-) And this certainly won’t be the last thing I share, either. As with past years, the concepts, ideas, and questions raised at HRevolution have a way of percolating to the surface on a regular basis. Some of what I write might be obviously tied in, but other pieces will not be. I definitely want to make time to further explore some of the sessions I sat in on, from HR Improv and Half Baked HR Ideas to Creativity/Innovation and the Reality-Based Live HR Case Study and more.
When we get together for HRevolution, it’s a funny paradox. The combined social media following of the room numbers in the hundreds of thousands, and yet we don’t share nearly as much at HRev as we might at other events. Why? Because the engagement and dialogue are just that good. It’s the only explanation I can think of after seeing this phenomenon repeat itself over and over again. We’re more interested in learning, sharing ideas, and hearing the other participants share than we are in kicking out sound bytes via Twitter, Facebook, or insert-the-latest-social-media-tool-here.
So, what do we talk about? Here’s the briefest of snippets:
HR is broken.
No, it’s not.
We need to disrupt it.
Things can’t keep going the way they have.
Why aren’t other functions broken? Finance doesn’t have these discussions.
We are killing the future competitiveness of our workforce by training the creativity out of them.
And on and on. Some things funny, some things enlightening, and some things just plain amazing.
Those were a few of the comments that filtered through the event throughout the day, and those were just the ones that I actually heard–I know there were additional conversations going on about similar topics during the event.
When I get to the end of this event each year I have to stop and take a breath. This is not a lecture. This is not a seminar. This is a high energy, participatory event that makes you think. It challenges you to stop thinking “we can’t change that” and start thinking, “What if I stop/start/change that? What would happen?”
And, as usual, I heard this more than once:
This is my favorite event all year.
This event is different. It always has been and always will be. One person I was particularly excited about meeting for the first time is a long time reader of this blog: Kellee Webb. Kellee is an in-the-trenches HR pro, but she doesn’t let that stop her from innovating, growing her knowledge, and taking business challenges head on. It was an honor to meet her, and I hope to meet more of you in the future at this and other events. It is one of the highlights of getting to do this kind of work! It also shows that this isn’t some closed group or clique–this is wide open and available to anyone willing to put in a few hours to make it happen.
One of the other great things about this specific event was having some of my fellow Brandon Hall Group folks in attendance. Madeline Laurano and Rachel Cooke were able to see firsthand the great discussions, networking, and value that comes from a relatively small event like HRevolution. Trish and I have talked about the event’s nuances in the past, but it’s not quite the same as living it!
An observation about HRevolution
Other than people asking me how soon the baby is due (within a few weeks), :-) the second most discussed topic is the return to the HRevolution roots of crowdsourcing the location, the non-conference space, and the small group feel.
One of the ideas that kept fluttering around throughout the event was this: we wanted this fifth anniversary of HRevolution to be special. We wanted it to feel like a homecoming. A reunion. A celebration.
And that it did.
But it also helped me to see how far many of us have come since that first year. Many of us are in more senior roles or have stepped out of HR to run companies, be industry analysts, etc. My conclusion as to why that is the case: people who are drawn to HRevolution are not interested in the status quo. They don’t want to show up to work a year from now doing the same thing they are doing now. We still have plenty of practitioners (I’m still helping out my old company and advising others on an occasional basis just to keep me grounded, so I get a percentage of that at least!), and that makes me very excited about the future of this industry. This definitely bears more analysis, but that will have to wait for another time.
A brief synopsis of HRevolution 2014
Below you will find an incomplete, but hopefully helpful, timeline of tweets, pictures, and other memorable moments from HRevolution 2014. This isn’t an exhaustive list, but it follows my journey through the event and I’ve noted some of my observations where appropriate.
As we continue the discussion about the restaurant industry, we’ve seen some great content as far as jobs and career tracks. One of the first things people consider when looking at career options is the compensation. A few of the more common questions:
What will I make? Can I provide for my family? What about growth of pay over time?
As you can tell from the information below, the responses to those questions are definitely positive. The infographic below looks at some key areas around these questions, but the following points are especially pertinent:
The numbers are clear – there are very competitive wages available to employees of the restaurant industry. Chefs and cooks make a median base salary of $50,000, while restaurant managers make a median base salary of $47,000.
Salaries in the industry are not stagnant. Entry-level employees receive a pay raise, on average, within six months of hire. About 70% of managers and shift/crew supervisors have received a raise within the past year.
The industry goes beyond hourly pay; by mid-career, 57% of restaurant employees are salaried.
One of the stats that I’m particularly surprised by is the growth of wages over time, particularly the 70% figure for managers and supervisors. That is a prime example of the type of growth and opportunity available within the industry that might otherwise not be obvious to those unfamiliar with the restaurant field.
In the infographic titled “Do The Math” you can find some of the key areas that people want to learn about regarding restaurant career compensation.
So, what are your thoughts regarding compensation in the restaurant industry? Did anything in here surprise you?