Your team will devour and digest every morsel of information relating to compensation, making it highly visible and a critical tool in driving human behavior and fusing your organization together. Leaders must consider all the valuable tools available on the compensation landscape. The metrics you measure and the behaviors you reward in setting bonus targets, the amount of compensation “at risk” compared to the amount “guaranteed” in one’s salary, how to structure a sales incentive plan, how often to pay bonuses, and how deeply to extend incentive compensation into a work force—these are but a few of the issues good leaders constantly mull over. Fortunately, much has been written on these topics, and I will leave the tactics of relating compensation to organizational behavior and reward systems to others.
The challenge to the Fusion Leader, as always, lies in the struggle between your selfish interests and what is best for the organization. The moment your team concludes that it’s all about you is the moment you fail to earn the following of those in your charge. It’s all about the Mission and (fortunately) delivering on the Mission opens the door for personal rewards, shared by all.
I’d like to end this series of compensation posts with a point of emphasis and some advice. First, it’s important for leaders to understand that setting compensation is one of the most tangible decisions you make in terms of the kind of environment you’re creating. I would advise you to ask yourself and the people around you what compensation approach to take. You need to find the right middle place. You want to be confident that you’re not making the mistake of slipping into the power leadership structure, where it’s all about you. That’s something you want to avoid at all costs—that is, if you agree with and want to subscribe to the Fusion Leadership model.
Second, it’s okay to take care of yourself and to reap the rewards of your hard work and the wealth that’s created by a successful company. There’s nothing wrong with that, so find a compensation arrangement that’s right for you and ensures that you stay on the right side of the line, allowing Fusion Leadership to flourish.
And it will be different from company to company.
Remember the ultimate prize is the success of your organization, as that will launch your personal success. For those who want to ‘do the numbers,’ consider this guidance when pondering how much should you pay yourself (as the leader) and how much should you pay others? Identify the amount of total compensation that (assuming everyone on your team knows the numbers) just begins to communicate that you are more interested in your personal wealth than you are in your organization’s purpose. Once you calculate that amount, award yourself a compensation package that adds up to one dollar less than that amount. With this tool, you can begin to answer the question “how much should I pay myself, AND how much should I pay others?”
The way Braksick and I did it isn’t necessarily the way everybody should do it. You need to land on the place where you can look your colleagues in the eye and explain in a very confident and self-assured way why you’re setting the compensation the way you are. Your clarity on how much to pay yourself and how much to pay others cements the cornerstone in building a culture of mutual respect and ‘fusing’ teams together around a shared purpose.