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).
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).
| Rooted in the physical sciences, complexity theory speaks to the tension of paradox: order and disorder, stability and instability, and organization and disorganization. It speaks to the edge of chaos – the edge of this tension – as the space where transformation actually occurs. The trick is: we as human beings are prone to rely heavily on our limbic ‘fight or flight’ system and must be willing to dance the difficult dance of discomfort, anxiety, and ambiguity in order to succeed in allowing transformation to occur at the edge of chaos. Meg Wheatley, the Sante Fe Institute, and Patricia Shaw are three great sources for more information on complexity. Network theory is equally as fascinating and speaks to the myriad of ways in which we are all connected, whether through greater or weaker influence, whether more strongly or more loosely connected, or whether through nodes or neighbors. Remember the ‘Six Degrees of Separation from Kevin Bacon’ game where no matter what, you would find yourself no more than six degrees separated from Kevin Bacon? For example, my former hairstylist did Michelle Pfeiffer’s hair, Michelle Pfeiffer was in Wolf with Jack Nicholson, and Jack Nicholson was in A Few Good Men with Kevin Bacon; hence I am four degrees from Mr. Bacon. This party game stems from network theory and the ‘small world’ experiment tried back in the 1960s by Stanley Milgram to show that the world really isn’t as big as we make out to be. (Check out Duncan Watts' Six Degrees: The Science of a Connected Age.) In essence, we change one element of the system and many others will change because of it. It’s a world where we can only control ourselves, yet we must live with the consequences of everyone else’s decisions. |
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?
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?
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