“How Much Do You Make?”

“How much do you make?”

The question froze me momentarily, as it would for a majority of American corporate workers.  Many companies have a policy against discussing personal salaries with other workers.  At most of the rest, it’s at the very least taboo.

Yet, despite arguments against motivation being tied to compensation, it’s on the minds of most employees.  Comparing oneself against others doing the same job (let’s ignore the quality issue for a moment) is natural.  Let’s not deny it.

From an HR perspective, salary comparison is a touchy subject.  The reality is that for organizations with strong “promote-from-within” cultures, the organization holds all the cards, and competitive salaries tend to wither with every promotion someone receives.  After all, the company knows how much you make, and so, they typically offer you only a percentage of the competitive outside rate when you get promoted.  We all know that if they were to offer the same position to an outside candidate, that individual would likely walk away with considerably more than the internal candidate.

Ultimately, that’s but one downside to a “promote-from-within” organizational culture (there are positive aspects, as well, though).  The point is, as long as you strictly adhere to this cultural policy, comparisons can be relatively controlled.  But as soon as you open the door to outside talent (which you should and MUST do in this increasingly competitive talent environment), you’ve opened a comparative Pandora’s Box.  You’ve introduced inequity and increasing distrust (and often deflection and deception on behalf of the organization) between employees and between employees and management.

Add to that the difficulty organizations have in creating and maintaining truly equitable and effective pay-for-performance systems, and you have a boiling cess pool about to erupt in your organization.

Top that off with executive salaries that are neither tied to organizational performance nor based on merit nor fairly controlled with other cost reduction measures, and you’ve just transformed yourself into an employer of last resort.

Madison, Wisconsin was just ranked by Policom Corporation the ninth strongest metropolitan economy in the country.  The corporations of this vibrant midwestern college town should be booming, and talent should be flocking to their doors.  And at many of the biotechs and innovation start-ups, this is happening.  They’re attracting top talent.  But at many of the largest companies, including Fortune 500 corporations, human capital mismanagement, flawed pay-for-performance systems, and inequitable salary comparisons have undermined these organizations abilities to get top talent.

The worst part of this conundrum is that because of the larger U.S. economy, the quantity of applicants for open positions remains high.  It’s the quality of applicants, and resulting new hires, that’s dropping off.  This handful of major companies, which tend to all be in the financial services industry, have soiled their reputations, and word on the street is to avoid this company at all costs.  Yet, either leaders are unaware of their reputation as a dirge of top talent, or they simply don’t care.  Either way, the situation is breeding mediocrity for organizations on the brink of financial disaster.

In the end, I told my colleague what I made.  She told me.  Yep, she was making significantly more, and yep, she was an external hire.  But she knew what that meant for her next promotion….and she sighed and opened the job board.  She’s looking elsewhere.  And I’ve already left.

The Buck Stops Here…Or Does it?

Leadership’s a tricky thing, and not always all that fun.  Just ask Mark Zuckerberg.  Jamie Dimon might agree, as would Scott Thompson.  All three execs have found themselves embroiled in controversy in the past several weeks.

In the past year, we’ve seen accountability bubble steadily upward after various incidents involving the U.S. military member actions in Afghanistan.  A few years ago, it was the abuse scandal of prisoners at Abu Ghraib.  Always, a rallying call for leaders’ heads is heard.  Sometimes the leaders are punished, other times not.

Who really is to blame when scandals hit organizations?  Well, clearly it depends on the circumstance, but more often than not, I’d argue the leaders are ultimately accountable.  Here’s why…

It’s all about culture.  And culture is all about leadership.

Think about it.  It’s the leaders of any organization who set the direction and feel of an organization.  Sometimes that’s a loose, innovative, free-wheeling culture, and sometimes it’s a hierarchical, authoritarian, “by-the-book” set of standards and norms.  Jack Welch ran GE in a very formalized fashion, whereas Tony Hsieh has a cubicle amongst all the other cubicles at Zappos.  Both organizations (under their respective leaders) are models of successful, profitable machines in their own right.

The ethics and personal values of the individual leader set the tone for the entire organization.  Simply setting policy doesn’t necessarily the culture.  And merely tweeting as CEO doesn’t change the culture.  But when an executive lives, breathes, and preaches a set of values, and ultimately holds subordinate leaders accountable for those same values, culture begins to shift and solidify.

So, do the values of the leader then mitigate any chance of impropriety within the ranks?  Of course not.  Unfortunately, people at all levels will make mistakes, act irresponsibly or without morales, and, in extreme cases, commit atrocities.  And the individual need to be punished to the fullest extent of the law.  The leader, however, does bear some responsibility, in my opinion.

Of course, to take that perspective to the extreme, very few individuals would ever accept leadership roles.  To do so would be akin to career suicide.  Or would it?

You see, perfection within the ranks is not the hallmark of strong leadership.  Mistakes will happen.  Wrongs will occur.  But despite that, leaders who can demonstrate, when such situations rear their ugly heads, that they did everything to promote and champion a positive environment of ethical and morale professionalism will prevail.

The military commanders in Afghanistan should be held accountable for the atrocities committed by their troops on the ground.  But that accountability should come in the form of an investigation into whether or not the culture they individually promoted contributed to the atrocities, or if the atrocities occurred in spite of the culture they championed.  In the former, prosecute the leaders as though they themselves perpetrated a crime.  But in the latter, commend the leaders for the positive and uplifting example of ethical leadership they instilled in the majority of their soldiers and/or employees.

Not everyone follows a leader, but as long as the leader is leading with positive and ethical intentions, that’s all that we can ask.  Where they’re not…..well, that’s a different story entirely.

The Complexity and Simplicity of Social Media

Life is complex.  Arguments can be (and have been) made that it’s becoming more, not less, complicated.  Technology, instead of merely simplifying the ways we do things, has actually just sped up the pace of getting things done.  From research to communication to decision making, the world is moving at unparallelled speeds.

Think now to the role middle managers have historically played in organizations.  For decades, their role has been one of message distribution, the living filters of corporate communications, the gatekeepers of valued information in the workplace.  The role hasn’t changed.  But the ways middle managers must play their roles has changed dramatically.  Adapt or die, middle management is facing a risk of extinction if it fails to let go of traditional role definitions.

Let me give you an example…

For several years, I worked closely with the sales force of a large and successful corporation.  The sales managers were the key conduit to getting messages to and from the company’s independent network of sales people.  And the company thrived.  Then came the perfect storm – increased market competition (and a slow response to the increased rivals by the company), technological innovations that produced greater consumer expectations, and the birth of social media.

Let’s just say the company was ill-prepared to deal with this conflux of situations.  And because of these game-changing conditions, the role of the sales manager was diminished.  Now, the company has tried desperately to carve out a new role for these managers, a sort of strategic partner with the sales folk.  The problem is that the sales folk: 1) know more about their products, industry, and sales practices than the managers do, and 2) allowing communication to flow through the managers causes, simply put, a bottleneck easily replaced by more relevant use of social media.  Quite honestly, the company now has the means of communicating more quickly, effectively, and directly with their sales force than ever before.  And to rid the company of the sales manager would save literally millions of dollars a year.

So, why would anyone object to such a move?  Well, that’s a more complex answer than you might expect.  Between organizational cultural hindrances, stubborn top leaders who understand no way but the “old” way of doing things, and political maneuvering by the sales managers themselves, the company is content to allow extreme inefficiencies to remain.

The irony to all of this is that sales people themselves see and understand the pointlessness of these managers.  Yet, nothing happens, and not because it’s a poorly understood situation.  Rather, until senior leaders view social media as more than just a “cute” means for employee engagement, they will fall short of understanding its true utility.

Social media is here to stay.  It’s not a flash in the pan.  Those companies who grasp the leading edge will be propelled into the future.  Those who miss the leading edge will be sliced and diced by the victors.

Which will you be?