Monday, October 09, 2006

Making Policy: Linking Core Values to Compensation Part-1: Communication

Compensation experts say time and time again that "what you measure and compensate is what you get for behavior" and yet it is amazing how many companies fail to motivate the behaviors they want through their compensation system and then complain that people are not acting the way that they should. Many companies have "core values" that are no more than mere words on a page somewhere deep in an employee manual that never gets read. Even that is far beyond what most law firms have, since I have neither seen or heard of a law firm that touts of having a set of common values (other than vague references to integrity, quality, etc). The true test, of course, is to ask an employee to recite them. Our goal at Exemplar is to find a way to integrate these values into the evaluation and compensation system so that the values really do become common values. What seems to be the age old challenge is that the most important things are perhaps the hardest to measure.

This particular blog is about Communication, which is one of the 8 core values at Exemplar. Why did I start with this one? Because it is less common to have communication as a core value and I also believe it is among the hardest value of them all to measure (and very important). Why? Well, let's start with the fact that most people don't even know what the heck it really means. How do I know this? Well, we put in our job ads that we are seeking people with excellent communication skills. Hundreds upon hundreds of resumes come pouring in with candidates who claim that have such skills. After interviewing them it is clear that most people think "excellent communication" means that they know how to talk and complete a sentence. In fact, I don't think I have ever met a person who thought they did not have great communication skills, yet I also don't think I have ever met a person that did not know a long list of people who have terrible communication skills. This tells me that we all seem to be suffering from a crisis of self-awareness. One thing is for sure: Miscommunication is costly to an organization and often unnecessary, and no organization has ever failed because it over-communicated. Therefore, it seems to be a worthy mission to explore how communication can be measured and rewarded in an organization. Here is where your input comes in. I would love to hear your thoughts on the following questions:

1) Since most people are not self-aware of how well (or poorly) they communicate, the feedback needs to come from the people with whom you work. If the system is to be effective, the feedback itself needs to be constructive. If you were designing this system, how would you collect and deliver the feedback? Should you "rate" a person on a scale based on several adjectives that describe good communicators? Should it be open form to allow for examples and explanation?

2) Firm Yet Flexible: A system for promoting good communication needs to be firm enough to offer guidance on what excellence in communication means within the organization, but also needs to be flexible enough to accommodate various communication styles and cultural norms in communication. Since the people giving the feedback will not be communication experts trained to make evaluations against set standards (some of them will themselves receive poor feedback in their communication review), should everyone be involved in this process?

3) You all know and have worked with someone who was a terrible communicator. How much easier would your life be if that person communicated better? How important do you think good communication is in an organization? If you could find a way to evaluate and promote good communication through an evaluation system, would you do it?

I appreciate your comments and look forward to the discussion. Feel free to post them below or email your thoughts to me and I will either post them with a response or keep them private if you wish:


Jim Belshaw said...

I find this a complicated issue.

At a personal level communications involves the sender, the message (content, form) and the receiver. Further, it is a dynamic interactive process.

At organisational level we have downwards, upwards, sideways internal communication all involving individuals using a variety of transmission mechanisms set within the frame created by organisational policies and processes. Then there is inwards and outwards communications with the external world.

My experience has been that organisations try to respond to communications problems with policies and procedures. If the real problem is poor personal communications skills, then the policies and procedures are likely to fail.Conversely, if you try to improve personal skills and the application of those skills and (as you suggest) the organisational culture is antipathetical to this, you will again fail.

To finish with a question back to you. Do you need to provide people with training to improve their communications skills?

Christopher Marston said...

Hi Jim,

Thanks for your response. Perhaps it is far too complicated an issue for a blog post, right? But to be reponsive, I agree with you that at a mirco level it is complicated because there could be problems with the communicator AND/OR the receiver I can recall the circular arguments with my ex-girlfriend where I would suggest that she could have done a better job communicating a message and where she insists in return that no "reasonable" person would interpret her communication that way.

On the other hand, I disagree with you at the macro level. We all know what poor communication looks like when we see it (remember, our core value is communication, not reception of other's communications -- for that I am afraid there is no hope!). If we zoom out, there are generally accepted standards of communication (tact, etiquette, timing, etc) and it is possible for a 180 degree or 360 degree review to uncover a communication problem with an attorney. If that is happening, there is a compelling case for an organization to take responsibility for working with that individual to improve their communication (in the workplace, perception is reality, right?). Doing so has the following benefits:

1) It is better for the clients, and the client is king is a service insutry! Attorneys got into a service business to serve, so they should be willing to work on any aspect of themselves that can improve service to the client.

2) It is better for your people. After all, how much time and energy is wasted dealing with people who communicate like crap? If we allow poor communicators to drive our "good people" batty, then we are really punishing the good ones and supporting the bad ones. As a matter of policy, wouldn't it be better to take a stand for good communication? I believe that if hiring is done properly, there will be fewer poor communicators and that it can be dealt with individually rather than through rules and policy.

3) It is better for the individual. At Exemplar, we want to take an interest in both the personal and professional lives of our people. To help our people improve communication where necessary, we are helping them in a way that carries into every aspect of their life. Clearly, there exist people who simply don't want to work on their commuinication and do not want people to point it out, but I would happily send them along to the competition so that they can drive out the good people over there (so they can apply to Exemplar).

To answer your final question, I am not suggesting "communication training", but I do think that we need to have an open culture where communication skills are evaluated and, if there is a widely held perception that someone needs improvement, we need to be able to work with the individual to make them aware and help them to improve. I believe that will go a long way to making communication a living value. After all, self-awareness is key to improvement. I'll bet that most people that come across as "jerks" have no idea that they do. The gift of self-awareness is worth its weight in gold!

Jim Belshaw said...

Chris, you have raised some points here that I need to think about.

Teasing this out a little.

I agree with you about the importance of self-awareness and share your frustration here. I absolutely agree with what you are trying to do with Exemplar in, among other things, creating an open communications firm. I also agree that both enforced firm values and policies an procedures are important.

Going beyond this, I suppose that I would make two points.

First,because communications is so important, it helps to have a structural model that you can apply.

Secondly, to the degree that communications is skilled based, then there an argument for training. Attitude problems may need to be addressed in aother way.

Finally, to the degree that commnications skills are a key requirement that you want - there are others - then this should influence selection and promotion criteria. But can you get the people you want?

My experience has been that when you are doing something new, that is outside the normal professioanl norms,then you actually have to train people in the new approaches to get the culture right.

Hope that all this helps.

Christopher Marston said...

Thanks Jim:

Jim and I have continued our conversation over email and he offered several points to which I responded and we agreed to share them with everyone:

CM Wrote: I agree with you that most appraisal systems are poorly done and I also agree that relative rankings are not great. I do think rankings can be useful to gauge perceptions, but I do not believe that relative rankings need to be disclosed because Excellence is a core value, and therefore excellence is always the standard, not how your colleagues are doing! To respond to your specific points:

JB Wrote:
1. Does not involve pay. As soon as you bring this in, the appraisal twists. Remuneration should be dealt with in a separate system.

CM wrote: I agree that it should not be discussed, but Exemplar fully intends on having performance on our core values impact ones compensation. Without the connection, there is no way to motivate the behaviour or, better, signal just how seriously we take our core values. They simply cannot be compromised.

JB response. I have absolutely no problem with the idea of core values affecting compensation. I do have a problem with the words “motivate behaviour” in the context of professional remuneration. Reasons:

o With exceptions such as sales staff and merchant bankers where remuneration traditionally depends directly or indirectly on commissions, all the evidence is that pay is really a hygiene issue, That is, pay issues demotivate but rarely motivate beyond a short term effect.

o Now there is a definitional issue here. Linking pay – and this includes bonuses and special “treats” (something that I have used to good effect) – to core values is critical in enforcing those values. The first thing I do when I go into a professional services firm is to look at performance measurement and remuneration since this tells me the way staff will behave regardless of what the firm says. My problem arises when I go beyond this and look at pay as a specific motivational device.

JB Wrote:
2. Focuses on performance improvement.

CM: Agreed

3. Is regular, consistently applied, but kept as simple as possible.

CM: Agreed

4. Involves a two way appraisal using the previous appraisal as a base.

CM: Agreed

5. Takes varying staff needs into account

CM: I like this one too

6. Is action oriented

CM Most definately

7. Has the firm values built into it.

CM: Absolutely

(Thanks for the input Jim. I think we made some good headway!)