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Show me the Money compensation strategy for managers

All managers must decide how much to invest in each individual in their team. This decks proposes one strategy, given finite resources.

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Show me the Money compensation strategy for managers

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  1. COMPENSATION STRATEGIES FOR PEOPLE MANAGERS SHOW ME THE MONEY

  2. all managers must decide how much to invest in each individual on their team

  3. you can invest a fixed amount of money and/or time

  4. so, as a practical example, if you have 10 members on your team, $100,000 in comp, and 30 hours per week to support them, how will you invest?

  5. how much of your time & money do you invest in your top talent?

  6. what about your weaker members?

  7. what about everyone else?

  8. what is fair? what is right?

  9. what gets you and the firm the highest return on those investments?

  10. remember

  11. it is a fixed pie that you have to work with, so you need to make hard choices

  12. start by dividing your workforce into 4 categories

  13. and, since people fall roughly into standard deviations

  14. it’s a good bet that your team will distribute roughly as follows

  15. in your team of 10, you’ll have 1 star, 3 potentials, 5 work horses and 1 under achiever the star and potentials will add a vastly disproportionate value to your goals

  16. here is my recommended investment strategy

  17. why this distribution?

  18. RULE ONE comp your stars extremely well so that they stay, and then get out of the way so that they can achieve these guys don’t need much time. they are well trained already. all they need are goals and air cover

  19. RULE TWO Potentials have the highest return on time comp them above market, but invest a much greater relative percentage of your time so that they become stars

  20. RULE THREE Comp your Work Horses fairly and spend some time helping them understand & achieve their goals But signal that while it is OK to, "just get the job done," if they stretch themselves towards the Potential category, you'll respond with greater investments

  21. RULE FOUR Do not comp your under achievers Instead, spend a disproportionate amount of time to help them retrain and/or move out of the function where they are under performing and into another function where they can become a star

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