Don’t Use Pay As Your Babysitter: How Managers Should Actually Manage Pay

May 26, 2015

From the ‘Talent Management Excellence Essentials’ magazine’s May, 2015 issue is an article on common compensation fallacies, written by Chuck Csizmar of the CMC Compensation Group.

 

Have you ever used a babysitter? This is when you have someone else assume your responsibilities while you take a break and focus on something else. The babysitter stands in for you, becomes you during the period of your absence. Someone else does your job.

 

Typically we think of babysitting when there’s actually a dependent child involved, but it’s not uncommon for ineffective managers in the workplace to use the same concept when dealing with their employees. These managers seek to use the pay that their employees receive as a surrogate for leadership – for keeping those workers complacent, retained and generally “in line.”

 

The practice of manipulating rewards presumes that the employee will chase the money, and will be happy with their lot, while at the same time will not require much in the way of supervision, periodic direction or even meaningful conversation. The thinking here is that, if I provide you with enough rewards you will act as desired in order to not jeopardize those rewards. The goal is to place the employee’s attitude and performance on automatic pilot while the manager is engaged elsewhere.

 

So far, so good. Not necessarily a problem, right? The red flag goes up the pole when you ask whether these monies are warranted by either performance or business need, or are they simply bribes?

 

What are we talking about?

 

Scenarios where pay is used in lieu of actual management are easy to spot.

 

• The Grand Giveaway: Where managers try to give away as much money as they can to as many as possible, not worrying overmuch with distinctions between individual performances. The key is to build an employee’s appreciation of their manager’s largesse.

• Title inflation: The promise of bloated and meaningless titles that distort organizational structures, for the prime purpose of rewarding employees in lieu of cash.

• Over rated performance: Play the good guy by over-rating performance during salary reviews. Culprits are often seen rewarding activity over results. So look busy!

• Assured compensation: Take the risk out of rewards. Everybody receives an annual merit raise, everyone earns a bonus. This fosters an attitude of entitlement.

• Counter-offers: “Let’s make a deal” attitude to keep resigning employees from actually leaving; a dangerous practice that increases costs and lowers morale.

 

What’s the cause of this behavior? Managers typically receive inadequate training (if any) on how to use their company’s pay programs, so many use pay as a crutch instead. Spending the company’s money effectively and efficiently isn’t on the radar screen. They use employee pay like a club to get an employee’s attention. And once they have that attention the manager is off doing something else – with the presumption that pay will substitute as supervision and motivation while the manager is absent – kind of like a babysitter.

 

Weak and ineffectual managers don’t actually manage their employees, in the sense of performance direction, leadership, setting good examples and decision-making. Instead, they want to be liked. They want to avoid conflict and they don’t want anyone to quit. They want employees to get along, and to help foster a friendly team atmosphere they try to manipulate pay in support of their efforts.

 

It’s really kind of a bribe.

 

So what is “managing” to these people? It’s not about making hard decisions. Too often it’s trying to get the most for their employees, deserved or otherwise, whether the organization gains in the process or not. The manager is focused on their own interests, and is using someone else’s money in the doing.

 

Why it doesn’t work

 

Relying on pay as a replacement for management has a short-term effective life cycle, at best.

• Employees see arbitrary equal pay treatment as de-motivating to high performers. Why bother extending yourself if you’re going to receive the same reward as the guy doing crossword puzzles?

• Employees resent favored-son treatment; the names of those who benefit for non-performance reasons will always become known. There goes your morale.

• No amount of money replaces the value of honest performance direction and feedback. Those with an interest in learning and growing appreciate the help.

• Absentee managers lose the respect of their employees, who know what’s going on. Remember that employees leave managers, not companies.

• While employees will take any money carelessly handed out, the organization will not gain because of it. So these “rewards” are ultimately wasted.

 

For managers who need a crutch to help motivate and retain their employees, to help them do their jobs, the above cautions likely won’t make a difference. Their goal is not to manage, but to get-by, to be liked by their employees and to avoid disruptions to their routine. This is not leadership, but administration.

But for those managers who wish to make a difference, who understand that managing employees is a challenging and rewarding role, abrogating responsibility through babysitting is not an option. They recognize it as the opposite of management, a damaging practice that will not enhance anyone’s long term career prospects.