Is your current team member compensation archaically still paying for time and effort or is it rewarding results?
Compensation is a key determinant when people are looking for any kind of job. Every person dreams of getting a job that enables them to practice their career and expertise and pays well enough to enable them to meet their daily needs. The greatest challenge for most businesses and companies is how to balance between compensating team members for results achieved by a team member and finally the balance that is the profit for the company.
In order for any person to achieve results, they both need experience in that particular field and skills. Experience is what a person has learned about a particular field that they cannot learn in any institution. No one can dispute the fact that senior people are very experienced in whatever they do since they may have earned an experience of probably twenty years and above. During this period, these people have also built relationships that are very important for the success of any business.
It is however important to note that the success of any business is not entirely dependent on experience and the relationships. A business needs to have a new perspective on things in order to be able to remain relevant in the current world. The new perspective may not come from people who have been doing the same job, the same way for the last twenty years. Sadly, leadership must embrace that “senior” team members may have skills that have become quite stale and outdated. And unless they are open to embracing different ways of doing things, they may become irrelevant in a very short period of time.
“Complacency kills.”
Results, skills, time, experience and effort are all essential ingredients for any organization to succeed. The question therefore is how to compensate each team member for the contributions they bring to the table. Senior people are likely to bring experience, time and effort to the team. However, the most important thing for any organization is results. It is very hard to produce any better results when a person has been working a certain way for many years and they do not know any other way of doing things. Additionally, one may also be very unwilling to embrace new ways that could lead to greater profits, if the old way of doing things has always worked.
The greatest challenge for the organization is how to determine the compensation plan. Do you compensate team members simply because of their time and effort or their results? Both people who are young in a career and the experienced senior individuals are likely to offer their time and effort. However, the time and effort for the young is likely to translate to better results owing to the new skills they may have acquired. For senior people on the other hand, they are likely to yield the same results they have been getting for the past twenty years since they are still working the same way they always have.
Time and effort are essential for the success of an organization. However, these are not the only determinants. Results are essential for the survival of a company. Therefore, any business whether large or small has to ensure they get the best results from the team members. Any company that has been simply paying based on the time and effort contributed by the members versus results, might need to reevaluate their systems.
“Doing nothing will guarantee stagnation.”
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