What Values Does Your RPF Process Telegraph? Why We Don’t Respond to RFPs

By Michelle Malay Carter on February 17, 2008

I had the unique opportunity to offer feedback to an organization who sent us an RFP after reading one of my articles.? The organization specifically asks consultants who decline to submit an RFP why they are choosing not to submit a proposal.

I’ve said before that? despite what is written in the organization’s annual report, organizational systems and processes telegraph the values the organization actually “lives”.

I Found a Match!? Espoused Values = Values Experienced
After viewing their website, I discovered one of the leadership values of this organization is to listen humbly.? I was pleased to find this value embedded in the organization’s RFP process.? Overall, this is one of the more open and reasonable RFPs I have seen.

We generally don’t respond to RFPs for some key reasons.? For those of you involved in the RFP process, take heed.?

Be Careful What You Ask For
I understand that RFPs can be a necessary part of organizational life.? However, from a consultant’s perspective,?RFPs frequently deny us the opportunity to offer our greatest gift ? expert organizational analysis via a unique lens.?? Is that not why organization’s seek consultants – for a unique perspective?

Unfortunately, RPFs, by their very nature, require an organization to have already done their own analysis through their own lens which often leads them to frame the project much differently than we would.

Remember – attempting to take the safe route is NOT always risk free.? It may mean passing on a plate full of potential for a portion of good enough.

Faulty Diagnosis Ensures Misdirected Time, Money, and Energy
Our expertise is helping clients recognize and correct core structural design flaws within their organization which impede their productivity and effectiveness.? Many RFP are designed to address the symptoms of these design flaws which, when addressed, produce short term gains at best.

We want more for our clients and can deliver it.? You get what you ask for, but how do you know you are asking for the right things?

Personal Observation
Over the years I have found that there is an inverse relationship between the length and depth of written information required in a proposal for work and the likelihood that we will actually be awarded the work.

I’m OK.? You’re OK.? Let’s fix the system.? What has your experience been with RFPs?

Filed Under Accountability, Corporate Values, Organization Design, Personal Observation, Strategy | 5 Comments

Yes, I Can Do That! – A Friday Funny

By Michelle Malay Carter on February 14, 2008

I’m off?on vacation?for a few days so I am posting my Friday Funny on Thursday.? I could set up this entry to auto post?tomorrow, but I have?trouble getting video clips to? save properly.? I wanted to make sure it posted correctly so I could?RELAX.?

Do We Deceive Ourselves or Others?
Have you ever had a consultant or job candidate exaggerate their skills and abilities in order to land a job??

“Yea, I can do that,” they say with confidence.? Are they in denial about their limitations or just stretching the truth to land the job??

In this same vein, there are some things a mobile phone just should not do.?Laughter is good for your health.? Here’s to your health on Valentines Day.

If you were on the creative team for this skit, what would you have added?

Filed Under Personal Observation, Strategy, Talent Management | Comments Off on Yes, I Can Do That! – A Friday Funny

Talent Management Systems Design – The Best Defense is a Good Offence

By Michelle Malay Carter on February 13, 2008

In my last post, I took a stand against annual, mandatory low performing employee cuts popularized by Jack Welch at GE.? I believe this practice is rooted in an untrue, negative belief set.

Cutting the bottom 10% annually is a defensive, compensatory system for lack of understanding of work levels, human capability, and an inadequate and/or misinformed?managerial leadership framework.

Low performance will always be an issue within organizations, but below is my suggestion for taking a proactive stance by creating an environment for exceptional performance through systems design?rather than relying on a compensatory, reactionary approach.? What would I do?

Design my organization using a work levels approach, i.e. exactly one role in each level, to facilitate natural, vertical flow of communication and leadership.
Institute a two-level accountability model with managers-once-removed having specific talent management accountabilities in relation to their direct reports-once-removed.
Train my managers on appropriately matching employees to roles.
Train my managers to properly diagnose performance issues to clearly identify if performance issues are the result of:
- Employee mismatched to role – using a three factor model
- Employee mismatched to manager.
- Improper organizational design – too many or too few roles within a reporting chain.
  Unclear or conflicting accountabilities and authorities.
Equip my managers with the authority to refuse the appointment of an unacceptable candidate or to remove one.
Ensure managers have the sole authority to assign or approve all work given to direct reports.
Grant managers the authority to review, recognize and reward employees (within company boundaries).

Let’s Stop Being Unfair and Cruel
We have got to move away from the idea that the factors that influence employee performance lie within the employees themselves.? Quite frankly, much of it is outside their control.? Yes, they need to bring their full effort to work everyday but beyond that much of the influence shifts to the manager and the systems within which they are operating.? Obviously, some things are beyond anyone’s control.? Hence, assessing performance as a substitute for overall effectiveness is ludicrous and cruel.? But that’s a topic for another day.

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

Are you a manager?? Is there anything on my list that you do not have?? How does it affect your work?

Photo Credit:? Football.com

Filed Under Accountability, Corporate Values, Employee Engagement, Executive Leadership, Managerial Leadership, Organization Design, Requisite Organization, Strategy, Talent Management | 6 Comments

Where Jack Welch Got It Wrong – The Mandatory, Annual Low-Performer Cut

By Michelle Malay Carter on February 12, 2008

Don’t Hack Jack!
Our underlying beliefs and values drive our behaviors.? Jack Welch believed, ?If you?ve got 16 employees, at least two are turkeys.??? From this belief flowed the talent management systems at GE.? One of the most controversial (and unfortunately?emulated) practices was that of cutting the bottom performing 10% of employees annually.

Judy at the Employee Factor, who also questions the practice,?posted some statistics showing that these beliefs and practices are still common.

Systems telegraph values and drive behavior.??
In addition to, “two in 16 employees are turkeys,” what does the practice of cutting the bottom 10% of employees annually?telegraph and drive?? (Hint:? It’s not trust nor engagement.)

Values Telegraphed:

We don’t trust or expect our managers to hire appropriately.
We don’t trust or expect our managers?to deal with under-performing employees so we will micromanage the process.
Perform at all costs or you are gone.
Don’t set your sights on anything with a return that is longer than one year.? You may not be around the second year.
All factors that influence employee performance are within the employee’s control.? (False)

Behaviors Driven:

Managers who hire well are now penalized, as they will be forced to eliminate team members every year.? With this system, competent hiring managers?are put in the?untenable situation of?either firing good employees, or they must intentionally seek out and hire dead wood with an eye toward firing them at review time.
I will not help my teammates as they may end up higher on the list which puts me lower on the list.? I can’t risk that.
I may need to sabotage my teammates in order to make the top?nine on the list.
I may?need to do something that will get me my performance numbers in the short term but that I know is not in the long term interest of the organization.
I must fudge the numbers, pay a kickback, cover up mistakes… in order to make the top nine.

Cutting the bottom 10% annually is a defensive, compensatory system for lack of understanding of work levels, human capability and managerial leadership.?

If you believe that:? I’m OK.? You’re OK.? Let’s fix the system, you would design your organization accordingly.? We need to equip, train and support (through systems design) line managers to successfully discharge their managerial leadership duties.

We wouldn’t let our untrained neighbor perform surgery on us in our backyard with a hacksaw, a hardback?copy of “What Good Surgeons Do”,?and a pep talk.? Yet we put employees in managerial positions, offer them some platitudes,?the latest best-selling book on leadership,?and send them off to lead “our most valuable asset” in polluted environments with inadequate tools.

Jack Welch is brilliant, and I admire many things about him, this is not one of them.? I have a more positive belief set regarding human nature and our desire to do meaningful work.? All we need to do is create work-enabling systems that eliminate conflicts of interest for employees, and send them off to work.

I’m OK.? You’re OK.? Let’s fix the system.? In my next post I will discuss how I would take an offensive rather than a defensive approach to low performance.

Have you ever been the victim of a bottom 10% cut?? Have you ever been forced to cut an employee who didn’t deserve to be cut?

Time Span of Discretion- Requisite Point of Clarification

By Michelle Malay Carter on February 10, 2008

A reader question from my last post reminded me that I?should make the following point of clarification.? As useful as I find the Requisite Organization model, it is not applicable to every organization.?

Jaques? Requisite Organization meta model, which includes the concept of?time span, applies to managerial accountability hierarchies.? Although some components may be useful, it is not designed for use in its?total-systems form?within partnerships, associations, trade unions, or churches.

A Common Misunderstanding?Regarding Time Span of Discretion
Time span of discretion will provide you with a way to determine the work level of a ROLE within a hierarchy.? You CANNOT use time span of discretion to determine the work level of a single TASK or PROJECT.

For example, a client might hire me to come for one day to lead their line managers through a talent pool evaluation to assess their bench strength.? Even with the after-the-event data input, analysis, and report writing, this ends up being only a one month project.? Using the time span model (inappropriately), that would mean that someone currently capable at level one could do the work.? This is simply untrue.? This is higher level work and requires higher cognitive capability than level one.

In his book Requisite Organization, Jaques tinkered with trying to determine work levels embedded in single projects by describing work levels. But whereas time span is a scientifically validated way of measuring the complexity of a role, here is what Jaques has to say about trying to determine task complexity.?

?This procedure is a subjective descriptive process. ?I do not know of any way, as of yet, to measure objectively the complexity of a task or program. Work with colleagues has been proceeding explicitly for over 10 years now to solve this problem, but no solution is as yet in sight.? It will be a very big step forward if and when we do succeed.? (Requisite Organization, 1998)

Jaques did not see this big step in his lifetime as he passed away in 2003.

Jaques was a scientist and he pushed hard for scientific methods and measures.? It was his gift to us and management science.? However, the descriptive process to determine work level that he describes in his book, with experience and practice, can be quite useful and, IMHO, accurate.? I use it in this blog quite frequently.

Medical doctors, whose work is rooted in science whenever possible, still rely quite heavily on the descriptive process to diagnose and treat patients when scientific means and methods are unavailable or unknown – hence the term “practicing” medicine.

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

Filed Under Felt Fair Compensation, Requisite Organization, Work Levels | 2 Comments

CEO Pay – A Friday Not So Funny

By Michelle Malay Carter on February 7, 2008

If you’ve been reading all week about felt?fair compensation, then what I am about to say has already probably occurred to you.

Not All CEO Roles Are Created Equal
Not all organizations have an equal number of work levels.? As an organization becomes more complex, more work levels are necessary to carry out the strategy, and correspondingly, the level of cognitive capability required to lead the organization increases as well.?

A single, Mom and Pop corner store might hum along nicely with two levels, and correspondingly, could be run by a Mom or Pop with level two capability.? If Mom and Pop decide to open multiple stores, the complexity of the organization will increase, and this may require leadership at level three.? As a rule of thumb, single business units with multiple functions generally require level 4 or 5 leadership.

Organizations that overarch multiple business units will have 6 or 7 levels of work embedded in them.? Only the largest organizations on the globe – Walmart, GE, GM – qualify as level 8 organizations.

Level 8 Pay
Using Elliott Jaques’ felt fair pay differentials table below, you see that within a level 8 organization, the CEO role at the top should not be more than 100 times the rate of pay of the person on the floor level.?

As such, if Walmart starts employees at $10 an hour ($20,800/ year), then, in all fairness according to felt fair research, the CEO of the largest organization in the world should not make over $2.08M.??

I guess I’ve been desensitized because $2.08M seems a little low to me.? Maybe I’m just in a generous mood, but I’d be willing to give him over twice that.? $5 million would sit well with me for Walmart Chief Executive Lee Scott.? It is a big job.?

As it turns out, Mr. Scott’s??total pay for 2007 was $23.3M; eleven times the felt fair rate.

Equitable Differential Pay

Work Level	Time Span Begins At	Differential	Sample Salary
8	50 years	32X	$1.92M
7	20 years	16X	$960K
6	10 years	8X	$480K
5	5 years	4X	$240K
4	2 years	2X	$120K
3	1 year	X	$60K
2	3 months	55%	$33K
1	1 day	31%	$18.6K

Assorted Other CEO Pay Facts
The CEO of a Standard & Poor’s 500 company made on average $15.06 million in total compensation in 2006, according to a report by The Corporate Library.The Canadian Press reported in January?that Canada’s top CEOs now make 218 times as much as the average Canadian full-time worker, compared with only 104 times as much in 1998.

Something smells here,?and the wind is blowing from the boardroom direction.

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

Filed Under Accountability, Corporate Values, Executive Leadership, Felt Fair Compensation, Requisite Organization, Work Levels | 5 Comments

Felt Fair Compensation – She Said What?

By Michelle Malay Carter on February 7, 2008

Since my last two posts on felt fair pay were more technical in nature, I thought I would create a post on the subject that was more conversational.

If a friend were to ask me about felt fair pay, here is what I would say:

As it turns out, we humans have an internal sense of what fair pay is for work roles that we are familiar with.? If you ask people if they are being paid fairly for their work, they will have an opinion.? Aside from yes and no, here are some common responses to that question.

Are You Being Paid Fairly for Your Role?

“Well, for the work they are asking me to do, yes, I’m being paid fairly.? But I could do a lot more.?” Work levels translation:? I am underemployed.? I have more cognitive capability than my role calls for.? I could do higher level work, and that would merit higher pay than I am currently making.
“I’m probably being overpaid.? The demand for nurses who speak Spanish?is so high these days, that hospitals are willing to pay anything to hire us.”?Work levels translation:? I am being paid more than the complexity of my role would merit.

In order to make these statements, there has to be an internal recognition that not all work is the same.? That some roles merit higher pay than others.

The interesting part is that even when people aren’t aware of time span of discretion or work levels, they are able to “feel” them and apply that feeling toward making judgments about fair pay.?

Similar to the fact that even if I had never been introduced to the idea of temperature or a thermometer, I can feel the outdoor temperature and make judgments about the clothes I should wear that day.

Back to the Honeywell compensation study, they looked at 30 different factors that might influence one’s perception of fair pay, and time span of discretion correlated with fair pay at the +0.86 level without the participants being introduced to the concept of time span of discretion.? They didn’t have to be aware of it nor understand it to be influenced by it.

Judging Fair Pay Up and Down
To take this one step further, I will not only have an opinion about what is fair pay for my role, but I will also be able to make a judgment about whether the pay of my manager and my direct reports are being paid fairly.? The differentials chart can be found on my previous post.

Feed Back – What is Your Gut Reaction?
Are you being paid fairly for your role??

How about your manager??

Have you ever felt like your direct reports’ pay was too close to yours??

Time span of discretion can help you make an objective case for your feelings the next time you ask for a raise.

Filed Under Employee Engagement, Felt Fair Compensation, Organization Design, Requisite Organization, Strategy, Work Levels | 4 Comments

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

By Michelle Malay Carter on February 5, 2008

A 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 | Comments Off on How the Compensation Industry Machine Silenced a Circumventor – A True Story

If We Really Understood Work, Compensation Would Be a No Brainer

By Michelle Malay Carter on February 4, 2008

Excavating A 50-Year Old Groundbreaking Compensation Study
A major compensation study was conducted at Honeywell in the 1960’s.? The results of that study, which was the PhD dissertation of Roy Richardson, were published in the book, Fair Pay and Work.? Click here for a book review excerpt?with summary results?displayed along with corroborative study information.

The Results
The study looked at 30 potential variables that could influence employees’ perception of fair pay for their roles.? The study found that time span of discretion was correlated to an employee’s perception of fairness at the +0.862 level.? These results have been reproduced in approximately 20 PhD dissertations since that time.

How Time Span of Discretion is Related to Work Levels
Time span of discretion is the way to scientifically measure the work levels I love to chat about on this blog.? I usually talk about work levels in a descriptive manner so that my readers can get a feel for what I am saying; however, work levels can be measured as well as described, and measurement is done using time span of discretion.?

A Universal Measure for Work Complexity
Time span of discretion is a universal measure, and as such, it can be applied to all roles – similarly to the way we can measure the temperature of all matter, regardless of how disparate the matter appears in form.? We can measure the temperature of a rock, a bowl of chicken broth, or steam emanating from a manhole.?

We can also measure and compare the relative complexity of the roles of beekeeper, research scientist, and construction worker.? The longer the time span of a role, the more complex the work.? Two roles with equal time span are equally complex – regardless of industry or type of job.

How This is Related to Compensation
The research found that the differential pay ratios between levels of work remain constant in terms of what employees felt was fair.? In other words,?if I have a role at level three (as measured by time?span)?and my manager’s role is at level four (as measured by time span), I will perceive that it is fair that my manager be paid two times my salary.? I will feel it is fair for my direct reports at level two (as measured by time span) to be paid?55% of my salary.? The actual pay numbers will vary by market or industry but the differential will stay the same.? See the table below taken from Requisite Organization by Elliott Jaques, 1998.

Equitable Differential Pay

Work Level	Time Span Begins At	Differential	Sample Salary
7	20 years	16X	$960K
6	10 years	8X	$480K
5	5 years	4X	$240K
4	2 years	2X	$120K
3	1 year	X	$60K
2	3 months	55%	$33K
1	1 day	31%	$18.6K

The No Brainer Part
What that means is that if I can measure roles within an organization by time span, which is a relatively straightforward, 20-minute process per role, and I can find the benchmark salary within my market and industry for level three work ($60K in the table above), I can use the differentials to create fair and equitable salaries throughout the organization.?You need no longer have a full-time compensation analyst, nor do you need to?pay a compensation?consultant hundreds of thousands of dollars?to do time-consuming, extensive job evaluations on each role in your organization.

Choice Point – What are You Going to Do with This Information?
Now that I have put into question what you may have known as truth, what are you going to do?? You can choose curiosity or default to defensiveness.

Move Over Woodward and Bernstein
Stay tuned for my next post where I expose the successful plot of a major professional society to bury this information which I just excavated.

Questions?
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, Organization Design, Requisite Organization, Strategy, Talent Management, Work Levels | 3 Comments

Just Fix the System Please – A Friday Funny

By Michelle Malay Carter on January 31, 2008

I’ve been called irreverent.? Sometimes I use sarcasm to get a point across, but Despair, Inc. has found a way to turn cynicism into cash-flow with an entire line of products for people?interested in responding to the well-intentioned but?impotent motivational words and techniques that?organizations attempt.? Just fix the system please!

Below are my personal favorites.??They are?from the Demotivator Poster line?and they are available for $15.95 USD. ?

If you were to create a Demotivator poster, what would it say?