Stewardship Chapter 11
Compensation and Performance Evaluation: Overturning The Class System
The Devine Right of Kings
The challenge is to create pay practices that support the heart of stewardship (accountability and commitment to the well-being of the whole).
Five ways our pay practices are incongruent with creating a service- and market-driven institution:
Pay Reinforces Class Distinctions
The problem is that we have such different rules for paying our leaders than we do for paying everyone else.
The pay strategy for those at the top is to find a way to pay them as much as possible.
The mindset for designing special pay for executives exists in whatever segment of society we look.
Stewardship requires the redistribution of wealth
Class Differences in What We Measure
Overhead costs for centralized groups are not widely shared and are not known in the same way as costs for lower levels.
Performance Not For Sale
Pay also institutionalizes our belief in patriarchy by the connection we make between money and behavior.
Pay and productivity are strangers to each other.
Productivity and feelings of ownership and responsibility cannot be purchased.
The act of paying more does not create high performance.
The Risk of Promising Pay for Performance
When we try to use money to induce behavior, it backfires.
Pay becomes a tool for communicating and enabling patriarchy, dominance, and dependency.
Rank Individualism
The importance of individuals versus teams will vary with the nature of the task and the organization.
The impact of rank-and-pay schemes is that the top 15 percent or so like the system, the other 85 percent feel like they have lost.
Patriarchy is designed to keep people in isolation from each other as a means of maintaining social control.
Confusing Supervisory Evaluations with Performance
We are as likely to be rating and paying people for compliance as we are for performance.
We need to create pay systems at every level that are tied to real organizational outcomes, not supervisory perceptions.
Pay for Empire
Hay system- method of using job descriptions to make rational the different pay levels within an organization.
Reward Systems That Support Stewardship
We all get paid for outcomes of concrete value to the organization.
An equitable distribution of wealth is needed.
These three elements are central to a pay strategy that helps institutionalize stewardship:
Pay Groups for Real Outcomes
Think of pay as a way of communicating and affirming purpose.
The process starts when we begin to pay teams or units for real outcomes delivered primarily in the form of variable pay, namely, salary increases and bonuses.
Our emphasis on the team does not exclude recognizing individuals.
Balance the Wealth
Partnership and empowerment cannot be built or coexist in the long run by separating the managing and the doing of the work.
The search is for systems that express the idea that wealth is created at every level of the organization and that we should pay people as much as possible rather than as little as possible.
Let each level work under a system that:
Gainsharing has individuals and teams benefit directly form economic improvements they deliver.
Pay for skills is a system where you get salary increases or a higher hourly wage the more different tasks or jobs you can do in a unit.
The stance on stock options is a powerful statement about who we believe truly delivers the profit.
At worst, employee stock ownership carries the illusion of partnership with no substance; at best, stock ownership underscores the organization's intent to treat employees as owners in a thousand other ways.
End Secrecy
Let all employees know what pay systems exist for different levels of the organization.
Creating a pay system aligned with the intent of having people at all levels be responsible for the success of the organization may not be a welcome strategy.
Most of us would rather make the system we have be more generous than search for outcome-based but higher-risk alternatives.
It seems best to have people redesign their own pay systems, using clear guidelines that require the new system to honor the well-being of the whole organization and to bring equity and an end to the class system.
The End of Caretaking
If we choose partnership we have to live with the risks of being an owner. The price we pay for claiming ownership is we lose the safety and reassurance that tomorrow will be provided for us.
Anyone who says they work just for the money has given up the hope that anything more is possible.
Block P. Stewardship: Choosing service over self interest.