Workscape Institute

[On May 27th, J.P. Donlon, the Editor-in-Chief of Chief Executive Magazine, interviewed Workscape CEO Tim Clifford in a live video webcast to a pre-selected audience. This video is one of a collection of excerpts made available on YouTube.]

In this clip, Workscape CEO Tim Clifford shares his views on common compensation errors and how “getting it right” can have a great impact on keeping your top performers focused and engaged. Tim encourages managers to step away from the all-too-common “peanut butter approach,” whereby rewards are spread evenly across the organization with high performers receiving only a slightly greater share than their peers. The “peanut butter approach” is easier because it avoids the difficult decisions of who to truly reward, but without differentiating pay it’s very difficult to create a top performing culture.

The creation of a powerful compensation system that effectively motives talent takes two characteristics:

1. Courage
2. Interpersonal skill

Courage is necessary in order to shift the rewards up the scale in order to give a smaller population a greater distribution of the overall bonus pool. Clifford notes that the greatest assets to a company are the leading employees who possess:

• Critical skill sets;
• Superior intellectual investment, and;
• Discretionary energy that benefits the entire organization.

Tim explains that in spreading out the allocations, one size does not fit all, and that those who perform in a superior fashion need to be rewarded in a superior way as a means to drive higher company performance. This pay-for-performance approach will also help to retain top performers, which has further positive implications for the business.

The second characteristic - interpersonal skill - is necessary because once the merit-based reward-system in place, difficult conversations and situations may arise. Management training is crucial in order to effectively address and communicate with employees. All levels of management must be trained to implement and uphold the levels of performance the business demands, as well as provide employees with the tools necessary to succeed.