The End of Compensation, Rewards, and Human Resource Management

Editor's Note: Today's post comes to us courtesy of guest contributor E. K. Torkornoo.

In spite of all the progress we’ve made over the years and decades, a troublesome fissure still persists in approaches to Compensation, Rewards, and Human Resource Management (CRHR) in many organizations. The massive divide relates to a preoccupation with means, versus the end.

THE ARMS RACE

For far too long, too many of us have been talking (and acting) about Attraction, Retention, Motivation, and Skill development (ARMS) as if they are the reason for our existence. We flaunt our ARMS in matters of strategy, policy, performance, and achievements. We parade ARMS on stage in many professional conferences, workshops, and forums. We do so in professional and academic publications. We ask our consultants and researchers to supply the latest artillery to help our troops stay well-ARMED (‘E’ for Engagement; ‘D’ for Development). We define, measure, and report how well we’re doing by proffering numbers, fancy graphics, and storylines about the state of our ARMS.

Unfortunately, ARMS and being well-ARMED are not enough for the organization. Necessary, yes; but NOT sufficient. 

THE END

Organizations exist to deliver RESULTS. RESULTS are the highest level in the hierarchy of performance. RESULTS are, generally, the ultimate state of desired outcomes for owners and shareholders. Indicative measures of results include Total Shareholder Return (TSR), profitability, share price, market share, etc. In the case of non-profit organizations, RESULT measures refer to the ultimate state of socio-economic well-being for target populations served (to the extent that the organization clearly identifies and focuses on this group separately from its internal stakeholders).

RESULTS are the real end; all else are means to an end.

In CRHR, too many organizations still have a troublesome preoccupation with old silos. Too many have rather inward-looking complacency. Too many are afflicted with the need to hunker down in their bunkers, drill into (often meaningless) numbers, do more and more about less and less, etc. Generating fancy statistics and graphics about micro organization characteristics may be nice and impressive, but do they ultimately demonstrate strong connections to RESULTS?

MANAGING CHANGE

For the many organizations that need to change, it helps to remember that:

• Grave dangers await those who succumb to the seduction of relying on ‘intuitive links’ between what they do in CRHR, and the RESULTS of their organizations;
• Functional areas like CRHR exist to support the delivery of RESULTS: not for their own sake;
• It is imperative to align everything they do in CRHR with the delivery of RESULTS;
• There are increasingly more tools for demonstrating (and testing) CRHR contribution to the delivery of RESULTS other than by waving ARMS up in the air, and chanting (as if we do not care) the tentative, tired, and troublesome refrains of old.

In too many organizations, too many efforts at change in CRHR have been relatively cosmetic. We have witnessed lots of restructuring, reinventions, re-engineering, transformations, … in CRHR that are little more than changes in functional area designations with new job titles. All the fancy new names and titles notwithstanding, they fail to deliver sustainable and deep changes in attitudes, behaviors, and contributions linked to the ultimate of delivering RESULTS.

For major improvements in CRHR, many organizations need, among other things, fundamental, far-reaching changes in:

• Strategy, models, modes, measures, metrics, men & women, and more;
• Attitudes, behaviors, and contributions demonstrably linked with the delivery of RESULTS;
• The lexis and structures of the language of CRHR;
• Sourcing and leveraging structured, multi-level hierarchies of performance that clearly distinguish among successive levels for Inputs & Attributes, Throughputs, Intermediate Outcomes, And Results;
• Differentiating between means and ends;
• Differentiating between indicators of intermediate outcomes, versus those of the organization’s ultimate RESULTS.

PLACE AND PRESENCE OF CRHR

The sustained presence of CRHR at the table in the highest corporate circles of decision-making depends on our ability to make far-reaching changes that demonstrate clear and measurable relevance and contributions to corporate RESULTS. Otherwise, CRHR functions and people get relegated to the fringes and/or buried elsewhere.

At the end of the day, the real END of Compensation, Rewards, and Human Resource Management is NOT the waving of ARMS or being well-ARMED, however measured. We need measurable positive contributions and links of CRHR to the ultimate reasons for the existence of the organization. The real END of CRHR is the delivery of target RESULTS.

E. K. Torkornoo is a Certified Compensation Professional and International Consultant who has served as Director, Manager, Consultant, and Specialist in Compensation, Total Rewards, HR, & related functions. His work spans multiple sectors, and includes regular and consulting roles with Big 4 Consulting, FTSE 100, Fortune 500, Fortune Global 2000, Forbes 100 Arab World and other organizations. E. K. has worked in North America (18 Years), Europe, The GCC (Middle East), Asia, And Africa. His background includes graduate studies at IESE (Spain), The London School of Economics (UK), and the Carlson School Of Management, University of Minnesota (USA). Currently based in Tema (Greater Accra), Ghana, E. K. Torkornoo is open to regular and consulting opportunities globally. Reach E. K. by email at [email protected],  or connect with him on LinkedIn.

Creative Commons image "business results" by limogirl5

Comments

[Margaret O'Hanlon]

E.K., great insights. So glad you stopped into the Cafe!

[E. K. Torkornoo]

Many thanks, Margaret.

[Chris Dobyns]

I only got a chance to read this today. Good treatment of the topic.

It sparked a recollection of a "funny" exchange at a meeting at a sister government agency (let's just say they're located in Langley, VA), now more than 10 years ago. I vividly recall articulating exactly what you were emphasizing, when I stated very matter-of-factly that: ". . . you all know that our employees are a means to an ends".

The resulting silence was so deafening, you would have thought I'd suggested reviving the practice witchcraft (bad) or advocating for the abolishment of the Internal Revenue Service (worse).

Maybe it's just a phenomenon in government (I suspect it's not), but it seems that losing sight of the "ends" is many times simply a function of "distractedness" or recurring organizational amnesia - which requires a periodic wake-up call from the front desk.

[Joe Thompson]

The same conversations often play out in the related sphere of employee performance management. Many times I have seen managers put in place performance goals and metrics that are tied to measuring activities, but not results. It is as if measuring how fast you rev the engine matters more than how fast you move down the road - or whether you're even driving in the right direction.

And I think you're right to raise the lexis of CRHR. Words matter. The words we use shape our thoughts and actions. So, we need a new way to discuss topics with which we've become complacent.

[E.K. TORKORNOO]

Great points, Chris and Joe. Thanks for weighing in. You are right. The end of delivering Results is often lost on many for a variety of reasons: culture, convenience (including amnesia), complacency, common usage and terminology, etc. And activities are too often confused with, or preferred over, results.

In some sectors, results are more difficult to articulate, align, and/or achieve (for example, improving "student achievement" in schools and colleges to match the demanding standards of employers who appear to want significantly more than educators want or like to take on). So whole systems easily fade or fail.

Wherever we have zero to weak links between results and rewards, the end of delivering results tends to suffer over the years from less than robust levels of articulation, action, and alignment. In contrast, in many private sectors, there are clearer definition of the end of delivering results, accompanied by often stronger actions towards alignment. And So CRHR needs stronger alignment with other functions to deliver organizational results.

Thanks once again, Chris and Joe.