When I began my career I was relatively frustrated with my pay. My earnings were significantly below what I expected them to be out of school given my education, skills, and1. Which – to give you a sense of the lack of perspective – mostly boiled down to internships.work experience. 1
Eventually I took these feelings of frustration to a constructive place; developing something of a chip on my shoulder, I resolved to outwork everyone else. More importantly (and specifically), I identified the skill sets that had the most compensable value in my functional space and began working to master them.
Later, I came to understand that performance and skill set are only a few of the components required to maximize compensable value. More often than not, where you work matters as much as how good you are at your job when it comes to maximizing earnings (and further still earning extraordinarily high wages requires one to be at least a little lucky).
Earnings – like many things in life – are impacted by a number of different variables. We can control some of these variables… and we must accept that others still are far beyond our sphere of influence.
…With that said, up until now much of the process of valuating talent has been largely subjective. Whether an organization’s job valuation process is skills based or job based – internal or external – there is a moderate degree of guess work involved in determining what level of pay is “fair”.
…But perhaps this won’t be the case for much longer.
Josh Bersin over at Forbes – and Ann Bares over at the Compensation Cafe – recently wrote some great articles around the increasing use of big data (and metrics) in Human Resources. This shift towards quantifying the value of talent at the individual contributor level could fundamentally change the way organizations compensate for work performed going forward.
I don’t really know if this shift will end up being a good thing or not. Data is often noisy, and making decisions based on bad information is sometimes even worse than making them on gut feel; at least gut feel decisions are made with the contextual knowledge that they are based on the (fallible) interpretation of imperfect information. When people make heavily data based decisions, however, they often stand by them with a rigid certainty that can carry with it destructive consequences if those conclusions turn out to be wrong.
So we have to get this right.
…But how incredible would it be if every organization can (in the near future) say that one day’s wages equal one day’s work for their entire employee population?
The potential productivity gains yielded from aligning pay with substantive, quantifiable performance across the workforce are endless.
As always, please share your thoughts in the comments section below.
If you have questions about something you’ve read here (or simply want to connect) you can reach me at any of the following addresses:
SomethingDifferentHR@gmail.com OR firstname.lastname@example.org