Innovators Will Demand a Different Pay Package

Photo Credit: Flickr.

Photo Credit: Flickr.

There are a number of workplace studies, articles and reports that claim employees are satisfied with their compensation; that they're mainly seeking ‘softer’ benefits like challenge, recognition and flexibility.

As good as that sounds for employers those that buy into the notion may find themselves on a back-foot when it comes to competing in this era that demands innovation. 

When employees say they are happy with their compensation what they really means is that they understand it.

They understand the boxes that they have to jump to, in order to earn more. They understand why the guy in the box on top gets paid more. The traditional workplace is divided into boxes in which every person fits. And each box has a predefined price tag.  Boxes make things fair.

People check the engagement survey box declaring their salary satisfaction because they deem their own fair relative to others with the same job description. It would be selfish to suggest their earnings should be higher than is set out in the well-established model.

But, an innovative organisation challenges the traditional definition of fair. 

A traditional organisation asks people to stay in a box, conform and follow the rules. An innovative organisation demands creativity, standing out, making a difference.

When an individual or team stand out by bringing an idea to life that translates to a bottom line impact, earning the same pay check as those that simply play by the rules will no longer seem fair.

Innovation starts with a rethinking of outdated notions that impact compensation:

Some people perform their job better than others. Most job descriptions allow for some compensation movement of +/- 5% as a small nod to the fact that some people simply do a better job. But, it doesn’t account for the fact that some people perform exponentially better.

‘Better’ being measured by their individual contribution to the economic bottom line. So whilst some people may share a job description they can have a vastly different impact on business results. 

Role based salary ranges are less relevant in an innovative workplace when any individual performing any job could produce the next great idea. 

Compensation is not a trajectory. Traditional compensation models are based on the premise that as long you’re alive and continue to show up for work you won’t experience a decrease in salary. This assumption of regular increases year over year rewards complacency – it doesn’t encourage the creative spark needed to remain competitive.

Go back to relating compensation to outcomes. This not only encourages people to remain at their best but provides them a tangible indicator when they’re no longer at the top of their game. It's a model that has long been adopted by the sales industry. There's no better way to be snapped out of a rut than a hit to your bottom line. 

Credentials alone are irrelevant. Blind reward for certification, diplomas and credentials seem to have increased over the past decade. If the annual performance review uncovers a new set of letters earned the coffers open up. Accreditation is a (perceived) sign of professional improvement.

Yet, many of these pieces of paper often represent a prescriptive narrowing of thinking – not recognition of open-mindedness and fresh new thinking. 

Some of the greatest innovators of our time don’t have framed credentials hanging on their office wall. They have results. Output. Real examples. That’s what you need to reward. If a training course results in greater output, fine. But ensure rewards are about the outcome, not the activity.

An innovative organisation will compensate people for their direct contribution to the bottom line.  Keeping people in a box in order to make compensation models neat and fair will only get in the way of your innovation aspirations.