Some of you have asked me about my choice of images for my  website. "What's with the stained glass?" you’ve asked. I thought we were talking about  aligning strategy, performance & rewards. Great question and the simplest  answer is: complexity. The paradox of order and disorder - one of the hallmarks of complexity theory, as I discuss in a previous post - comes into play when I speak of alignment in what Joshua Cooper Ramo refers to as the new 'revolutionary era.’  In a nutshell, old ways of thinking simply don’t cut it anymore.  Alignment means something very different today than it did not that long ago.

When I talk about alignment today, I think fluidity and  movement. I think non-linear. I think creativity. I think agile. And, paradoxically, I think deep infrastructure. I think strong lines. I think core.  The stained glass images represent this paradox for me. The images are a creative representation of my thinking on how alignment lives and moves in the 21st century, and while alignment remains pivotal to organization success, we must be willing to break away from some of the linear thinking of the past.  Towers Watson said it well when they stated in a 2012 report, "Companies are running 21st century businesses with 20th century practices and programs."

Performance & Rewards is an area in which old thinking abounds. Fixed salary grades, stagnant job descriptions, and annual performance reviews built on static objectives are just a few examples of antiquated programs developed in a time where hierarchy was revered and organization was analogized to a machine. I understand why they still exist; in past lives I've helped create and maintain plans that include these very elements! There are legalities and financial constraints that we simply can't ignore. However, the go-to solution is new wine in old wineskin. Folks, the wineskin is seriously leaking.

The key is the willingness to lean into this new idea of alignment in our ‘VUCA’ world (i.e., volatile, uncertain, complex, and ambiguous) as opposed to attempting to control it.  It’s not for the faint of heart!  Hence the necessity to build up your organization’s core – core mission, core competencies, core processes (communication being at the top of the list), core structure, core value proposition – while remaining agile and responsive to the broader environment.

There are ways we can begin to incorporate new thinking - a new way of aligning people, performance & rewards to the business strategy - into the way we do business and empower our talent. I have mentioned changing the dialog in previous posts, and this is a great opportunity to practice. One place to start is 'both/and' thinking. For example, we need to evaluate performance and maintain a feedback loop AND we have changing objectives throughout the year.   We have a finite pool of rewards dollars AND our headcount continues to increase. 

Rather than battling over which to address - which is often a welcome yet dysfunctional distraction from the issues at hand - we own that both are the reality and we start the conversation there.  Get people in a room together who don’t normally get in a room together.  Highlight the tensions and discuss them with openness and curiosity.    In this way, you begin to strengthen your organization's core and build capacity for new ways of thinking and communicating.  In essence, you create your own story of the stained glass.

We are winding down our first blog series, grounded in Dr. Edward Lawler’s book, Pay and Organization Development. We have reached Reason #9: Pay is a Systemic Factor. If I were to pick a 'favorite’ of Dr. Lawler’s top 10 list, this would be it.

I am very excited about the direction Organization Development and Change is heading; that is, toward more of a complexity paradigm and post-modern networked reality, and away from a purely open system model. To me complexity and networks make more sense than simply a factor of inputs, transformations, outputs, and feedback (yes, I’m oversimplifying).

Consider there is much more to both of these, yet for now the point is: what does complexity and network theory have to do with Compensation and Organization Development (OD)?  A lot, if you ask me.  If someone half way around the world can link themselves to Kevin Bacon in six degrees or less, how much more connected are people in one singular organization or industry?  And if you change the job title, the job duties, the function one oversees, or an organization chart, you've likely affected many employees you wouldn't have even considered, including their compensation, career trajectory, and classification.

Case in Point: Employee Services happened to mention in a meeting I was in that they were working with OD and the Logistics Administration (LA) department to dramatically change the organization structure.  They wanted to increase responsibility for a certain subset of Logistics Administrators, moving them to a more customer service-oriented role.  LA wanted to create a better career path for its employees - fair enough - and had thought they found a way to do it by just shifting a few things around.  My colleague believed he had another satisfied customer; his smile suggested, "Where's the ribbon so I can tie it up in a bow?"

Cut to the Chase: Fortunately for all of us my colleague did mention the changes underway, because what they thought was a simple modification to some job descriptions and boxes on an org chart became a potential Fair Labor Standards Act (FLSA) nightmare.    What surfaced was not only that the new positions would be Non-Exempt, but the old positions should have been all along.  The job duties had previously been described as Exempt (read: inflated), and the truth was suddenly coming out since it now served them to position the new Customer Service Administrator job as 'higher level.'  I told my colleague he needed to 'untie the bow' and work through step-by-step with OD, LA, and Compensation what needed to occur to first and foremost ensure legal compliance, and simultaneously meet the business needs.  We then had to discuss the implication of the Product Administrators, a separate group seemingly unrelated yet for years had mirrored the LA group structure, pay levels, and FLSA classifications.  Pandora's box was quickly opening.

Pay is systemic.  We change one thing in an organization, even if it seems completely benign or is noneconomical, and it can change many others - from individual pay levels to titles to office space to culture.  As Lawler (1981, p. 8) states, "pay systems in organizations are closely linked to the following major aspects of organizations: superior-subordinate relationships, job design, organizational structure, organizational climate, management training and development, information and control systems, performance appraisal, and management philosophy or style."  I am guessing readers can add to this list.  In a nutshell, both Compensation and OD are well served and highly encouraged to come together to discuss change efforts at their onset so that the more complete story is told, and the fundamental issues are addressed using a planful, robust methodology that takes this complexity and network of connections into consideration.

What examples do you have that illustrate the systemic nature of pay?