Most of us are aware of the public outrage over big Wall Street bonuses being paid out especially in light of Wall Street’s contribution to the financial collapse last year. Given this year’s theme of “Bold” and “Courage”, I wonder what HR’s role could be in 2010 in creating the strategies and influencing the structure of executive compensation plans.
My experience is we are often called upon to provide the important work of administering executive compensation – working with external executive compensation vendors to develop compensation models, massaging (in the best sense of the word) the data so that it translates to the goals/outcomes of our businesses, presenting the output to our senior HR leadership and possibly to the Board of Directors and then administering the plans once approved.
So if we claimed “Bold” and ” Courage”, what would our role look like? Would we move beyond the important work of administration? What does true leadership look like? Can we (HR) define the big hairy audacious goals (BHAGs) for executive compensation? Are we equipped – we know the business, how it makes money and grows profitability, its strategy and its current objectives; the compensation levers; the talent we want to incent and retain; and the impact of plan design on achieving both short-term and long-term objectives? Are we willing to go head-to-head with those who would exclusively craft short-term focused executive compensation plans (usually in the name of keeping certain talent) that often do not serve the business and its long term profitability goals?
There are many more questions…and I am aware that the time for questions is quickly passing as we (HR) need to quickly get in front of this one. I am calling myself and all HR professionals to stand in the space of “Bold” and “Courage”, as we move forward on this very important business lever.
Your thoughts?
HR by The Charles 