Fast Five
Mouse Scroll Icon
December 2022

“Fast 5″​ with Paige Brewer, Principal, KQ Consulting

This pulse gives candid feedback from an experienced compensation consultant that I’ve known and respected for a decade or more.

Her insights can help leaders to address the concept of incentivized performance in ways that best fit their organizations. These nuggets don’t replace a formal consultation, but hopefully, they’ll be valuable food for thought. Enjoy!

1.    What are the most important effects of the pandemic on compensation models?

This varies by company and industry. The pandemic and resulting talent movement have forced companies to be more creative with their compensation philosophy, approach, and programs. The employee paradigm shifted from, “What can I do for the organization?” to “What can the organization do for me?”

Some organizations have had to invest in base salary increases, not just for new hires, but also for the resulting internal compression. And in a “Hey, I got an offer from a competitor” mode, companies have had to respond with a strong counteroffer if the position or person is critical. The frequency of this occurrence is a change from the pre-pandemic world. Companies have similarly increased their use of referral bonuses, and other bonus/incentive programs, or allowances tied to housing if employees are located in high-housing cost areas and the cost of labor is low in comparison. These variable alternatives help with keeping the fixed base salary costs down.

There has also been an interest in communicating the career growth path available to employees to build retention. I think an unfortunate part of the talent movement is that a company will tolerate lower performers for a longer period, but it has also encouraged them to invest more in top talent.

On an additional positive note, salaries and salary budgets are higher than they have been for quite some time. Most current employees have no recollection of the high salary budgets during the inflationary period in the 70s. Salaries have yet to keep pace with inflation which will take time, as it did historically. Daily living costs have increased, including gas and tolls, so with an eye to flexibility, and life during the pandemic, more employers are allowing workers to come into the office when it is required, and not just for face time.

Somewhat related to the post-pandemic world, pay equity has become, and will continue to be, a regular analysis that companies will be conducting.

2.     How do candidates, for mission-critical leadership roles, impact pay-for-performance?

Because of the on-going labor shortage and competition for top talent, certainly, the candidates for mission-critical leadership roles are the people which require an organization to think long and hard about what the right offer is to attract, motivate, reward, and retain them to move the performance needle. This has resulted in offers with more creativity, and once the candidate is on-boarded ensuring they remain engaged in the future of the company.

3.    Performance scorecards – yes, or no?

Yes, with the same caveat tied to any performance measure or KPI. They need to be relevant to and linked directly to the organization’s strategy.

The biggest challenge for most organizations is making them alive for employees.

Regular communication at all levels is key so that each employee understands what they can do daily to influence the outcome of results. A company should also consider pulse surveys or questions in their employee engagement survey that assess whether the communication is effective.

4.    What are presently the most valued roles in leisure and hospitality and why?

             I’m not sure that has changed much. The guest-, or customer-facing, roles are typically the most valued because they have the biggest impact on the guest experience. Guests have come to expect more (particularly if they are spending more), so roles that define, and bring to life, the distinctiveness of the brand are also vital.

5.    Should Boards trust compensation surveys?

Yes, provided that the survey source is valid and reflects an appropriate peer group. However, all compensation data-based decisions need to be reviewed in context with the short- and long-term business and human resources strategy.

Each organization is unique… it’s what makes compensation professionals’ lives interesting. So, looking at the data with that lens when making decisions is important. You want to make decisions that support and reflect your uniqueness.