How the Compensation Industry Machine Silenced a Circumventor – A True Story

By Michelle Malay Carter on February 5, 2008 

money.jpgA Quashed Circumvention of the Compensation Industry Machine
In the late sixties and early seventies, the compensation industry was abuzz with the groundbreaking Honeywell study I talked about in my last post that found that time span of discretion was correlated with felt fair pay at the +0.86 level.

Defensiveness Rather than Curiosity
Instead of meeting the research with curiosity, the industry jumped to defensiveness as they realized discerning fair and equitable pay?for workers would no longer take weeks and months and hundreds of thousands of dollars.

One Good Threat Deserves Another
Their industry duly threatened, they decided to do some threatening of their own.? One of the gentlemen involved in the research at Honeywell took the Executive Director position at the American Compensation Association in the years after the study.? We?ll call him Frank.

When Frank began his new role, he spent three years trying to convince the board to sponsor an independent study of time span and fair pay.? According to Elliott Jaques (the researcher behind the discovery of time span and a friend and colleague of Frank), Frank was told by the ACA board that if he pursued this idea of time span of discretion any further, he would be fired.

That was that, and the compensation industry machine has managed to successfully quash the information for 50 years.

Time span takes the mystery out of fair pay. ?No longer does the consultant need to go behind the curtain to pull levers and make smoke appear to conjure another salary figure.

Couldn?t happen you say?
I’m a fan of the Fair Tax proposal that is making some grassroots headway in the US.? Unfortunately, I have my concerns about whether the US Tax Machine, those whose careers are based upon creating and interpreting our convoluted tax code and preparing and processing tax returns, is just too powerful and well entrenched to be overcome.

We all know from the Beta/VHS folklore that the best solution does not always prevail.

Invest in Your Managers!
There is a way to gather straightforward, scientific, consistent, reliable, and valid fair-pay information from your very own line managers.? Once they have an accurate and consistent framework for thinking about and talking about work, they are quite capable of discerning work levels and from that rolls fair pay.

What would you rather invest in? Building the leadership capabilities of your line managers or the gross sales of Towers Perrin?

I?m OK. You?re OK. Let?s fix the system.

The subject of time span of discretion usually stirs up controversy. ?What did it stir up in you?

Filed Under Executive Leadership, Felt Fair Compensation, Managerial Leadership, Organization Design, Requisite Organization, Strategy, Talent Management, Work Levels

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