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…So this morning I read two great posts at Compensation Cafe. The first one is from Margaret O’Hanlon, and it examines the impact that an employer’s views on comp can have on plan design. It’s a great piece, and you can read it here. The second post is from Jim Brennan at the Economic Research Institute. It recounts one of the author’s experiences (written as an allegory) wherein he counsels a client on how to drive performance by withholding a benefit. It’s a good (and short read), and you can check it out here.

I share these pieces because – in aggregate – they made me realize that I haven’t been anywhere near creative enough in thinking about how compensation can be used to drive performance. A while back I wrote about how one of the biggest challenges to getting employees to drive their own learning and development is that the payoff is too undefined. The highest performers in any workforce are going to be self-starters that drive their own development simply because it’s a smart time investment, but for many people there needs to be a carrot of some sorts before they will invest the amount of time and deliberate practice required to develop competency in a new work skill.

…So why not incentivize skill development via rewards? I’m not suggesting all organizations implement skill based pay structures; rather, I’m saying that if there is a work skill or competency that an organization realizes it is deficient in, creating an incentive to develop that skill may be a great way to build a bench. Promising a job or a promotion isn’t always practical… but wouldn’t a one time bonus (if it was large enough) or base pay increase accomplish the same objective? These carrots could be offered within departments or across the enterprise – dependent on how needed the K/S/A is. Organizations are already spending a fortune on training programs and learning tools as is. Why not drive their utilization by offering the right incentives? In many cases it’s going to be cheaper than going out into the market and sourcing/recruiting/onboarding an external hire with the needed skills…

…Maybe there are a ton of organizations doing things like this already. And maybe the range of KSAs this approach could be used to cultivate is limited. As with my post yesterday, this is just a morning thought stream…

As always, please share your thoughts in the comments section below.