Salary Structures — Comp + Coffee: Ep. 25

When it comes to comp’s role in recruiting and retaining top talent, it often boils down to one thing: salary.

In this episode of Comp + Coffee, we’re joined by Kim Taylor, CCP/GRP at Payfactors. Kim joins the hosts to talk about salary structures.

They’ll cover the basics of what salary structures are and why they’re put in place — but this wouldn’t be Comp & Coffee without a twist on the topic.

As always, if you like what you hear, be sure to subscribe. And don’t forget to give us a 5-star rating!

 

For a full transcription of the episode, see below.

 

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Shawn: Welcome to another Comp + Coffe. We’re live.

Kaite: You are particularly chipper today, Shawn LaVana.

Shawn: It’s a beautiful day to be alive Kaite. It’s always a beautiful day to be alive. I’m Shawn LaVana here with Katie Rosa.

Kaite: Hello.

Shawn: We’re joined always by Bill.

Bill: Hello, Shawn.

Shawn: Welcome to the show again, Bill.

Bill: Thank you.

Shawn: I have to do this every time. I don’t know why.

Bill: That’s what you do, Shawn.

Shawn: And we are joined by a special guest today, Kim Taylor.

Kim: Hi. Thanks for having me.

Kaite: Hi, Kim.

Shawn: Kim works with us here at Payfactor. She’s our resident Comp expert, one of the many but, the leader of Comp experts.

Kim: No pressure.

Shawn: CCP. What’s the other designation?

Kim: GRP.

Shawn: GRP as well. Remuneration.

Kaite: Wait. Hold up. What’s GRP?

Kim: Global Remuneration Professional.

Kaite: I feel like I don’t see that one often.

Kim: Not too often, no.

Kaite: Exclusive. That’s right.

Shawn: She is an expert among experts.

Kaite: Look at that.

Kim: I travel in lofty circles.

Shawn: We have a meeting, you don’t know about it. We’re here today to talk about what could potentially be a run of the mill topic, salary structures. But as always here at Comp + Coffee, we’ll put our take on it. But I do want to open up with this. We received, as we love to, email us, please, coffee@payfactors.com or review us on your favorite podcasting app. We receive feedback and we love it. We got a recent piece that I wanted to tee up with you, Bill, from a woman named Lydia.

Kaite: Shout out to Lydia because hopefully, she’s listening. She listens enough to email in.

Shawn: Thank you for giving us that feedback…

Bill: Hello, Lydia.

Shawn: …Lydia we appreciate it. Lydia says she’s been listening to Comp + Coffee and while it’s not as entertaining as Comedians in Cars Getting Coffee it does make Comp interesting. So, Bill, how are your improv classes going?

Bill: Fine.

Shawn: I can tell.

Bill: Lydia, what is up with that?

Kaite: Really the the key principle of improv is yes end?

Shawn: It’s a tall order. It’s a tall order. You have to make it interesting and be funny on top of it. So Bill’s going to bring the funnies. He started up some improv classes.

Bill: Wish you could see the red ball on my nose.

Shawn: Yeah, he’s going out for Second City here next year. We wish you good luck in your trial and we should hear a podcast about it.

Bill: It was nice doing Comp.

Shawn: Have to have goals. Have to have goals. I applaud you for that.

Kaite: That’s, like, very much like a career pit, huh?

Bill: A little bit. I wonder what the salary structure for somebody at Second City is [crosstalk 00:02:59]

Kaite: Look at that segway.

Shawn: Well, thanks for bringing us back into the day-to-day, Bill.

Bill: Yeah, I try.

Shawn: Let’s start out with the basics though, and that’s why we’re here today. I think a lot of our audience might have a pretty good information on this. But, we have a lot of people that are new to Comp that are learning it. But, we will put our twist on this. So let’s start out with that though. Kim, Bill what are salary ranges? What are salary structures? Why do we need them?

Kim: Well, at its most basic, a salary structure is a set of ranges that outlines the competitive range of pay for your company jobs. There’s a minimum. There’s a maximum. And ideally you’re going to pay your employees inside of that set of ranges. Kind of the next level look at it is your salary structure is the intersection of the external market value of your jobs and the internal valuation. So it’s a mechanism to balance the internal and external equity.

Bill: I think the part people often forget is that internal equity part is what the salary structures are designed to control, enable, whatever verb you wanna use there. Because you pick jobs internally that are of comparable value to the organization and put them at the same level in a structure so that you could have your mid-level accountants and your mid-level marketing people and your mid-level engineers. [crosstalk 00:04:37]

Kaite: That was gonna be one of my questions. Can you have people from different departments within the same…it’s not a department thing it’s a level within the organization.

Bill: Correct, although sometimes… And Kim will probably jump in here. But sometimes you have different structures for different departments or different parts of the organization. Often, you know, IT or engineering in particularly in a software [crosstalk 00:05:04] kind of company and a technology company will have a different structure.

Kaite: Is it because those are hot jobs?

Bill: Correct. They’re hot jobs and they tend to be higher-paying, faster moving.

Kim: Yeah, anytime you need to handle a set of pay different from the rest of your organization, it’s appropriate to consider carving them out into their own separate structure. You might have an executive structure for example or a lot of universities will have a structure for their professors.

Kaite: Okay. All right. Interesting.

Shawn: Yeah, this gets a little bit out what we’ve talked about before and one of the issues with pay equity. Generally, as you start to see these rules and laws being passed is one of the grey areas that was anticipated, I guess is the best way to put it. Here in Massachusetts was that “Okay, is a business analyst, a comp analyst, an IT analyst. Do they all need to be equal?” And basically how the way it’s working through is no to the extent that you’re saying Kim right? Like, it’s cool to have different ranges for each of those as long as within those you’re paying equally.

Kim: Exactly. And your structure can serve as a proxy for that when you’re doing an equity analysis. You can assume that jobs that are graded together are probably roughly comparable in terms of skill, scope of responsibility and you can look to those jobs for your equity review.

Shawn: That’s one of the risk I’m guessing. What’s the risk of not having structures?

Kim: Well, I guess the biggest risk is that you potentially run into employees being paid on a completely ad hoc basis. You will have…you know your line managers might be hiring people and just making up their rates however they feel is appropriate. And you don’t have any sort of consistency across hiring managers across departments. That’s probably the biggest risk that I see.

Shawn: And isn’t that almost in every company’s evolution, though? Like when a company starts to a certain size, that probably happens, right? So, what point do you see these come into play?

Kim: Yeah, I guess really once you get to the point where the HR team no longer wants to be involved in every single hiring decision, every single offer letter, that’s when you start thinking about putting a structure into place so that your managers have the tools that they need to make the decisions themselves.

Shawn: So you’re at that point or beyond it, how do you start to think about establishing structures?

Kim: I think the first thing you need to know is what jobs you have in your organization. You need to have a good list of all the positions, what did they do? Why do they exist and how do they compare to each other? That’s probably the starting point. And you’d be surprised at how many people really don’t have a good handle on the jobs in their companies especially when you reach that kind of growth phase. You tend to think initially you think more about employees and less about jobs. And so to start out with you structure you need to get away from the employee idea and think more about the roles that you have in your organization.

Shawn: And probably keep those jobs updated as well. To your point, like, if something’s moving fast the job description [crosstalk 00:08:01]

Kaite: I was just about to ask about job descriptions and, like, the role they play.

Kim: Yep, you definitely need to have your jobs documented so that you can group those jobs together, like Bill said, based on their internal relationships. Having job descriptions that are current and thorough is going to help you do that accurately.

Shawn: And staying on top of that regularly I’m guessing.

Kim: Absolutely.

Kaite: How regularly?

Bill: I was gonna say that’s probably one of the biggest barriers to doing it too is to getting structures in place and getting them right is having your job descriptions up-to-date because that’s sort of a big challenge within most organizations. It’s, like, keeping up with that because it’s not…I don’t know, it’s not front of mind for most companies. It’s, like, “Oh, you know, Katie, we need to update your job description just because.”

Shawn: It’ll never happen. One of the things we say here a lot though not necessarily here but here at Payfactors, not here at Comp + Cofee, we talk about market pricing, right, or benchmarking against the market. When you’re setting your structures up and you have your jobs and your duties, is that the best practice? Do you do price against the market or can you do it against something else?

Kim: Well, here at Payfactors and probably just by virtue of who we are and what we do most of our clients do build market-focused structures. And so the first step there is to market price your jobs against the external labor market so that you have a sense of what the competitive market value is. If you’re at a company that’s a little bit more internally focused you can build your structure based off of job evaluation commonly done through a point system. That’s not something we work with a ton here, again, just by nature of who we are.

Shawn: Where do you see that more often? Is that in things where… I would think universities?

Kim: That’s probably a good example. I see it a lot of times in companies with a lot of jobs that really just don’t benchmark well, companies that have a lot of very unique roles that don’t commonly exist in other organizations.

Kaite: Getting us on a tangent here. But, like, what kind of organizations have roles that are super unique like that?

Kim: Sometimes you’ll see it in research organizations. I’ve seen it in some professional service type organizations.

Kaite: Got it.

Shawn: Cool. So that makes sense and it makes sense, organizations that might do it slightly differently. How does this play into figuring out a com philosophy after that? So, you set ranges, you have these structures set. How does it start to influence… As your business matures, as your Comp structure matures, how does it start to influence your philosophy?

Kim: Well, really you need to have your philosophy set before you start building the structure. You need to know who your competitive labor market is. You need to define that relevant recruiting market. You need to have a sense of what you’re targeting in terms of percentile, where you think your market is, are you going to match the market or lead versus lag? And you need to have a sense of how you tend to move people in your company because that’s going to drive the structure of your structure, I guess for the lack of a better phrase.

Shawn: Structures and structures?

Kim: Mm-hmm.

Shawn: I like the structure you have there, so, I put structure on top of it?

Kim: Exactly.

Shawn: Excellent.

Bill: Although the pay market thing is one of my, you know, hot button issues. It’s, like, pay markets can be different for different job families or different parts of the organization or even different jobs or will get to different people.

Shawn: Makes sense.

Bill: And then that I think can create a challenge in building a salary structure because you don’t know… You could say these jobs are at the same level in the structure but as the markets move they may separate from each other and that will create problems next year or the year after as two jobs that were related are no longer as closely related.

Shawn: So, you’re hitting on something that’s key though. So let me ask you further about that. One of the things that I continually hear in compensation is that while everybody there who wants to be in my structure is in my structure. But, then we have this outlier group, I mean not even outlier, right? We have this other 50% that don’t fall in there because we made these decisions otherwise. So how do you handle that with these? Like how do you handle high performers? How do you handle people that have different market structures, right, or map against different market effects?

Bill: I mean I think in many things in compensation in HR you deal with exceptions as exceptions. You take them out… I think Kim will have a more sophisticated answer. But, I was laughing as she was talking about how do you have a minimum and a max and you almost always have somebody below the minimum or above the max or both. You know, the structure is somewhere between guideline and rule. You know, it’s not hard and fast.

Kaite: What do you do when you have someone… How do you handle those like special cases then, when you have someone either below minimum or about max?

Bill: I mean, there are different ways to do it. I mean, you know, in reality, somebody who is below the minimum may be at the wrong level. They may be in a job title that is higher than what they’re doing or for some other reason they are mislabeled, mischaracterized or, you know, that can be the easier one to fix presuming you have budget because you can always move somebody’s salary up. The harder version of your question is the other half is what do you do when somebody is over? And, again, they could be mischaracterized or mismapped or, you know, otherwise not in the right place in your structure. But if they are truly over the max of their band you have to figure out whether you let the band catch up and that person doesn’t get a raise. There is an argument for that and saying like you’re already above your range but, if you have a person that’s highly paid presumably they’re a good employee and are good at delivering what they’re supposed to do and you want to be careful not to disincentivize that person by saying, “Oh everyone else got a raise and you don’t because you’re overpaid for what you do.” Like, that’s a pretty likely way to get somebody unmotivated.

Kaite: I’d say it’s a tough conversation to have.

Shawn: Less than the conversation you’re trying to have.

Bill: I don’t know if Kim would add anything or…

Kim: Yeah, I would definitely agree with that. The first step, I think, is to figure out why they’re outliers. What happened to cause them to be above the max or below the minimum? And while it’s… I never offered that as a strategy. I would never suggest to a client that they deliberately put somebody below the minimum or above the maximum, it’s going to happen. And sometimes that’s just the way it is and sometimes you change pay to account for it and sometimes you don’t. It’s really a case by case basis.

Shawn: So here comes the interesting Comp + Coffee’s spin. Salary structure.

Bill: Stir, if you will.

Kim: Oh.

Kaite: Look, that was what I was gonna say.

Shawn: Look at that.

Bill: [inaudible 00:15:20]

Shawn: Send me a live trial. Coming next week. The stir in the mix. The mix in the stir?

Kaite: No, it’s a stir. Stirring the coffee.

Bill: Stirring up the coffee.

Kaite: Sorry.

Shawn: I need to take classe, too.

Kaite: You need to drink more coffee, apparently.

Shawn: So these are very typical in compensation, right? We do these for all the reasons we just cited. What if we didn’t? Can we move… I’m asking this naively probably. Can’t we move toward a place where we start to view individuals as a market of one or a structure of one relatively speaking, right? There’s the equality part that’s laws in some state. Let’s talk about that. But relatively speaking, can that be the case?

Bill: Well, I think you did, double or triple jump there, you know, to get from salary bands to individuals. To keep it simple for podcast purposes, there’s, you know, you could go and do it on a job by job basis where every job has its own band or it’s own grade or its own structure. And then you could also do it on the individual basis. And I think we’re seeing some companies starting to do each of those things. I think it’s a lot of work on the compensation people to manage. But I think that the people that are doing it are doing it… I don’t know if defensively is the right word. But they’re doing it sort of in reaction to what’s going on in their relevant labor markets. And that you have individual jobs that are moving out of sync with each other. Kind of like what I was saying before where you put two jobs together that have different pay markets and then as salaries change in the pay markets those pay markets can spread. So you’ve put things in a band so that you’re implying they’re connected to each other and then they peel apart. And so now you have to fix it or you could just start with every job being in a different band so each job can move independent of the others. But, then you lose your internal equity or, you know, you have lost control over that and then it raises the question was that the right thing to be doing in the first place, having internal equity across jobs?

Shawn: Right. So, in other words… A couple of different things that we should pull the string on here. But, one of the first that you said that I’d like to talk about more would be or is the concept of more work on composition people by doing that. But, the question I’d ask then is if we’re trying to do our best to map, to attracting and retaining the right people for organizations, isn’t that how you start to approach that as opposed to saying you’re just like everybody else? We say you’re a unique butterfly because you’re gonna help us out a lot?

Bill: I think it is, and I think it’s what it’s sort of communicating at least implicitly is that external equity or external fairness is more important than internal or, you know, that there is some bigger focus. And if you think about it, I guess, recruiting, when you recruit, you’re recruiting from the outside market. And when you’re retaining you’re keeping people from going back to the outside market. And recruiting and retention both externally focused at least from a compensation basis. And can I jump to jobs?

Kaite: You should jump wherever you want, Bill. [crosstalk 00:19:13]

Bill: It’s not my podcast.

Kaite: You’re the boss.

Bill: I got a comedy interview.

Shawn: Listen, I got one foot out the door [inaudible 00:19:21] [crosstalk 00:19:22]

Kaite: You’ve got a rehearsal in 20 minutes.

Bill: People are getting tired of this. So, at the job level. Sorry, we just talked about the job level. At the employee level, you know, how many people in the comp world have struggled with this issue of you have 10 developers but all 10 of them have very discrete skills. They’re very different. You know, you have a Java developer, you have, you know, worked with COBOL developers which half the people in the podcast don’t even gonna know what that is.

Shawn: [inaudible 00:19:51] a great time.

Bill: Exactly. But you know in the world of salary surveys and, you know, having to have job titles that are trying to basically aggregate your employees into cohorts of similar things. You say this group of 10 people are all developers but they’re not all doing the same thing and their skills may be valued differently within the organization as well as outside the organization. And so should you be saying all developers are equal or equivalent or should you be looking at the skills of the individual person that y ou know, has the title developer? And is the title really just a way of making it easier to aggregate data for salary survey purposes rather than for the practical day to day application within your company of figuring out what’s the right pay for this person?

Shawn: Yes , so, you can have data that’s deep enough within a survey so that you can get that market data. But in reality, to your point, maybe if you have two engineers with the same skills but one of them focuses on front end UI development, right? There’s fewer of them for example. And one’s more infrastructure or [crosstalk 00:21:16] internal architecture. Well, yeah, right. Like maybe more common, same skills, same experience, all things equal but, the market values those specific things more as opposed to lumping them together and saying, “You’re both engineers.” It would say, “Your skills are more prized externally and internally.” But…

Bill: Right. But if you just imagine, like, how much work is it to do that? You know, it’s a lot. And I think, you know, historically it’s been hard to collect that data, you know, and analyze it and come up with enough data points that say, you know, this external or whatever it was is like front end developer is worth X in the marketplace and the back end developers worth Y. It’s, like, you need to get enough data points of other companies that are reporting data at that level of granularity.

Shawn: But is this one of those areas that we’re hamstrung a little bit by what we’ve always done, right?

Bill: Yeah.

Shawn: In reality couldn’t technology help us get to that point?

Bill: Welcome to HR. You know, it’s, like, always hamstrung by what we’ve always done. I think that the market is being tested and being pulled in different directions to try and see what is possible.

Kaite: Is what you are just describing with the two developers, that scenario, is that, like, the blue sky perfect way of doing it and or are companies actually approaching it that way? Maybe that’s a better question for you, I’m not sure, you Kim.

Shawn: If I can add context to it. That was one of the other strings they wanted to pull on. So [crosstalk 00:22:56.408] taking us there which is I’ve heard of companies that are…you were talking about companies like this, Bill, that are taking this approach for a couple of different reasons. The one that I can think of I know was doing something similar was doing it because they want to be an employer of choice. They transcend multiple industries, right? So it’sa tech company but they participate in different industries. They’re gonna need different types of people even if they have the same title and many different skills and characteristics. But, also they’re into hugely competitive markets, right? So, they want to make sure that they don’t lose really key talent and most of their people I would bet they would argue a key talent because they’ve gotten them there. two external factors right now. Maybe this rounds it out. Kaite, that was one of the other thoughts I [crossstalk 00:23:40]

Kaite: I guess that’s kind of what I was thinking about too. Is this something that, like, you just said that was…that example as a tech company, is it something that like these I don’t know the right way to categorize them, like, high-profile you know…the companies working within hot markets are doing and no one else is or…

Bill: I think it’s clearly a reaction to that concept and you get… You know, all of these things we’ve talked about are all sort of related and they’re on a continuum from you know the hardcore well-established salary structure to you know pricing by the person versus the job versus the band. Ad that one way of thinking about it is that what comp people who use salary structures now think of as the exceptions, the outliers or the people that you have to make special consideration for. Those are sort of the first…That’s you’re dipping your toe into the idea of pricing by the person. You know, why is that person an outlier or that person is an outlier because we have to keep her happy or that person’s an outlier because that whatever that guy does is really hot and all of our competitors want to hire that person so we have to do something different or you know this particular kind of developer is rare and highly valued. So…
..
Kaite: We need to pay them accordingly.

Bill: And so if you think about that, what you’re saying when you say all those things is that person isn’t really in the band on our salary structure. That person’s in their own band or in their own…They have to be treated separately. And you could say the same thing about the job. Like our developers are being poached by one of our competitors, therefore, we have to move the band. It’s sort of how acute is the pain and where…like where do you see thata reaction is needed or some sort of action to prevent losing your good people or, again, being able to bring people in. If you’re trying to hire those people you have the same problem and you look at your salary structure you go, “I can’t offer this person more than $72,000 a year but they’re currently making $100,000. Like, what do I do?” You say, “Well, maybe my salary structure and this person or this job are not correctly aligned.”

Kaite: Got it. Kim, when you’re talking to other folks in compensation is there a… Like, do you recommend one way of doing this versus the other or is it just unique to that individual’s organization or that individual’s job?

Kim: I really think it’s unique to that organization and what they’re trying to solve. Not every company needs to compete as aggressively as some others do. To Bill’s point, it is a lot of work to price at the job level or the employee level not just for HR and for compensation but throughout the organization. Because an approach like that is gonna require you to really feel confident that you know your employees’ skills and their proficiencies in those skills. So you’re really gonna have to push on the managers to get that information.

Kaite: Probably easier to do at a smaller organization than versus an organization with thousands and thousands of employees.

Kim:Or an organization that’s really just committed to being a leader in compensation that’s really committed to being a place to work. I think you really need that buy-in from management to go through an approach like that. In some companies, it’s just easier to build a salary structure and you’re not targeting those high flyers, you’re not trying to get those outliers, you just need steady workforces.

Shawn: Well, there’s a percentage of jobs in any organization that we know we can put into structures because we have a plan for their churn or the replacement, they’re not as valued as highly or uniquely as the others. Don’t we miss out on that opportunity to map as many as possible individually or to view every individual as their own market? Because in my mind then that makes it easier to showcase that Comp actually has this direct effect on the right people for the company, right? If we’re looking at them and saying, “I am doing everything in my power to make sure that that person comes here, stays here because I know that they’re going to provide a unique value to the business.” Are we missing out on that when we take a two broad approach with structures?

Bill: I think that’s possible but, I also think like in every other aspect of business you have to prioritize and pick and choose your battles, you know. And to Kim’s point and probably my earlier point, if you can’t, like, market price and figure out the value of every job to your company each individual or each individual employee to your company because of resources, do you just, like, throw up your hands and go, “No, we can’t do it.” Or do you look at your…

Shawn: Do the best you can.

Kim: …you look at your roster and go, “Who are the people that are most critical within the organization or what are the roles?” And focus on those. And I think this ties into, you know, it took a long time to get to it in this podcast, an idea for a future podcast, which is how often we as comp people or HR people focus on sort of the middle of the pack, the average versus the outliers that are really affecting change? When you look at turnover in your organization then you say, “Oh, we had 5% turnover this year. That’s great. You know hit my KPI.” But, if that 5% is you know, if you’re Google, and it’s all of your search engine developers, that’s horrible. If it’s the admin staff or something like easily replaced kinds of jobs then maybe that’s a great outcome. But, like, who are you losing not what’s the average or what is your turnover rate among your whatever top 10% of must keep roles.

I guess also, I’ve never seen this metric but where you have turnover at important jobs in your organization, do you track whether you traded up or traded down. I mean, I’m sure that would be a little offensive if it cut out but it’s like when you lose people and you replace them with somebody that’s even better helping the organization a lot of small company entrepreneurs will tell you you should weed out the bottom of your organization because you can always replace them with better people.

Shawn: Right. I mean Jack Welch’s approach, right?

Bill: Right.

Kaite: What was at 20%?

Bill: I think I’ve heard different numbers 10, 20, 25.

Shawn: That was the percentage.

Bill: Right.

Shawn: But what you’re talking about is basically like in baseball they call it VORP, the value of a replacement player. Is this person more or less valuable than what somebody might be otherwise? Then what the market might be otherwise generally?

Bill: Right. You know there’s all kinds of cost associated with that. You know it’s like the downtime [crosstalk 00:30:50]

Shawn: Loss productivity.

Bill: But but, again, it’s a much more strategic view of turnover or you know sort of the overall compensation and employment vision for a company than just our turnover was 5%.

Shawn: How do you know who to target that are your top performers? Like, if you’re in a company of 10,000 people where you don’t uniquely know each individual, how do you know who to target?

Kim: Well, I think you have to rely on your managers to hopefully be doing the performance appraisals on a regular basis and doing a thorough and accurate job with them.

Kaite: What about if…

Bill: I’m sorry. There’s a little top-down issue here too where you’re CEO and your c suite executives have a vision for where the company is going and then the managers need to take that into account when they answer Kim’s question of who do you need, like who’s critical? So that you’re keeping the people that are critical for the future plans for the company versus the status quo of the company.

Kaite: I think you answered what I was gonna ask. I was gonna ask, like, what if Dev only hires…Software developer roles are harder to hire for so we’re only hiring, like, the top performers and you have a whole team of high performers. But, I think approaching it the top-down approach like you just said might be the answer.

Bill: Right. And, you know, if you have a team of 20 superstars, losing one of the 20 superstars is not nearly as painful as losing one of one superstar. Like, presumably the others in the team can fill in.

Kaite: Yeah, they can pick up the slack.

Bill: And also let’s not forget that those 19 people will have networks of people that are like them, that should help you get, you know, new superstars in the fold.

Shawn: A players hire A players.

Kim: Can I ask a question just following up on what you said there?

Bill: Yes.

Kaite: If you’re going to have your c suite trickle down to the rest of the organization, their vision of the company and defining who’s most critical for the future growth then doesn’t that sort of imply that you’re saying that some other functions are less critical? How do you have that conversation with your employees in a diplomatic way that doesn’t demotivate them?

Kaite: Hey Kim, you’re not really critical.

Kaite: How do I say, “Well, you know what, Bill, I have to pay your employees at market because they’re just at market no higher because they’re just not as critical.” How do you soften that message?

Bill: I think you focus on the other half of it. It’s like who in your sphere of the organization is absolutely critical or, you know, some people will come in and go stack rank your employees which when you have a small team is really hard to do. But the point is, like, if we can only throw money at one person or two people or 10% or whatever it is, like, who would they be? And I don’t think it’s that your employees are not critical, it’s that your employees are not at a level where if one of them leaves we as a company arr in trouble. Like, that’s what you’re looking for.

Kim: I like that.

Bill: To quote my research friends I’m not sure it’s settled science but…

Kaite: That’s a good way of thinking about it.

Shawn: Comedian friends.

Bill: I am a comedian, friends.

Kaite: You are a circle of one?

Shawn: All right. Well, I think that probably does it for today’s episode. Hopefully, it was educational, maybe a little funny. We’ll work on that. We’re working on it.

Kaite: Probably not so funny.

Shawn: Stay with us Lydia. Stay with us. Hang in there.

Bill: Funny to us.

Shawn: We’ll get there.

Kaite: Yeah, we are funny to ourselves.

Shawn: Hey, listen, Jerry Seinfeld knows nothing about compensation.

Bill: I think he knows millions of things about compensation.

Shawn: Not more broadly speaking though, Bill.

Bill: That’s true.

Shawn: Just the zone.

Bill: We should get him on.

Shawn: Oh, yeah, let me make a call.

Kaite: You said you have comedian friends. So let’s… Put your money where your mouth is, Bill.

Shawn: This is going nowhere fast. All right. Thank you, everybody, for listening. If you like these kind of conversations come on out to CompCon in San Francisco October, 21st and 22nd. You can learn more at compcon.com, otherwise, we’ll see you around. Thanks, everybody.

Bill: Thanks.

[00:35:37]

[music]

[00:36:09]