The Work Wire
SHRM CEO Johnny C. Taylor, Jr. and Bob Goodwin, President at Career Club, host a lively conversation on how the latest news impacts all things work-related.
The Work Wire
The Work Wire - TDB
Are you ready to rethink how pay structures can transform the workplace? Join us for a captivating conversation with Johnny C. Taylor Jr., President and CEO of SHRM, as we unpack the compelling world of incentive-based pay. This episode opens up a window into the rising trend of pay-for-performance models, not just in sales but spreading to various other sectors. We'll take you behind the curtain of compensation structures, weighing the perks against the pitfalls, and explore how this model changes the landscape for roles from sales professionals to CEOs. We'll also touch on the findings of the Alexander Group, which reveal the growing prevalence of incentives across roles, and examine whether these changes truly motivate improved performance or are simply a cost-cutting tactic.
As we navigate through the intricacies of setting and adjusting incentive goals, you'll gain a new perspective on the ethical considerations and challenges that companies face in this domain. With insights into the importance of transparency and realistic target setting, we shed light on how unforeseen events, such as the pandemic, have forced companies to adapt their goals. We'll also address the critical role of HR in ensuring fairness and tackling unconscious bias, as well as the increasing transparency among employees about compensation. This comprehensive exploration promises to enhance your understanding of incentive-based pay and its implications for a fair and motivating workplace.
You're listening to WorkWire, sponsored by CareerClub and SHRM. Careerclub has a range of services aimed at job seekers with an empathetic approach. Whether you are a job seeker yourself, know someone who is in job search or an HR professional looking to bring a more empathetic approach to transitioning employees, check out Career Club. If you are an HR professional seeking to enhance your skills, subscribe to SHRM and explore their extensive resources, Visit SHRMorg. That's SHRMorg.
Bob Goodwin:Hey everybody, this is Bob Goodwin with Career Club, and welcome to another episode of the Work Wire where I'm joined by my good friend, the president and CEO of SHRM, johnny C Taylor Jr. Johnny, good to see you, my friend.
Johnny C. Taylor, Jr.:Good to see you, my friend.
Bob Goodwin:It's a Friday as we record this, so happy Friday to you.
Johnny C. Taylor, Jr.:Yes, yes, yes, and I need it after this long week.
Bob Goodwin:Amen. I think all of our listeners probably do too, so I'm very excited about our topic today, johnny. I think that it's one that will engage listeners and I think that we'll be seen increasingly in the workplace. The topic today is the increased use of incentive-based pay or pay for performance, and as a career salesperson, I'm really used to that.
Bob Goodwin:So, here's your goal, here's your target, here's your quota and here's the way the commission scheme goes.
Bob Goodwin:As a CEO, I know that you also have targets and they're very measurable and that's what you're held accountable to and if you hit them you're compensating a certain way.
Bob Goodwin:You don't hit them, you're not compensated in that way and it's sort of what you sign up for. There's a recent study that came out by the alexander group, I believe, that said that now fully 28 percent of roles have an incentive based component to to them. So essentially again for people listening that there's a base salary component and then there's a variable component. So, just to make the numbers easy, if the salary is $100,000, there might be another 10% or 15% that is in play for you on top of the salary to get to, you know, a target earnings of 110 or 115 000. What I thought would be super interesting to explore with you is the the good parts about this, which I think there's definitely some. But I think there's, from both the employer and the employee side, some places where this might go a little sideways or at least bear kind of understanding how to stay out of some quicksand that might have been unintentional.
Johnny C. Taylor, Jr.:I like that Interesting.
Bob Goodwin:I'm like okay, I know.
Johnny C. Taylor, Jr.:Bob's getting any come for me and us, but I love it, let's go for it, bob.
Bob Goodwin:Okay, all right. So first place I get to thinking about on this is if I'm an employer and, just to use my example, that the comp was $100,000 and maybe there's a 5% bonus, maybe not, but it's $100,000 a year job. And I come to you and say, johnny, you know what? I've got a better plan for you. Now, in fairness, we're going to take the salary down to 90, but we're going to put on top of that a 25% bonus opportunity. So let's say 30%, make the math easy for me. So now you can make $120,000. Awesome. So you're like that's cool.
Bob Goodwin:So now I want you to focus on your total earnings, not just the base salary. So before the job was $100,000, it kind of is what it is. Now I'm going to take the salary down to 90, but you can now make 120. Doesn't that sound like a great deal for you? And you're like I guess, sure. But what if the company's kind of like, yeah, you know what? But we know people aren't going to make this target and all we've essentially done is just dialed down our total compensation that we have to pay out, but we've kind of given the illusion, the mirage, of higher comp that may not be attainable.
Johnny C. Taylor, Jr.:Well now. So, bob, you and I often talk about especially when we're talking about employees assuming good intent, amen. The idea that an employer would take a number down with the full expectations expectation that you'll never meet it, I'd like to think doesn't happen a lot. That's typically not how it works. The idea is we add a bonus to get more out of you, we add a bonus to get more out of you and hopefully it therefore benefits you and you get more out of us in the form of additional compensation.
Johnny C. Taylor, Jr.:I have to say, in all of my years of practice and I dare not tell you how many decades of practice it is rarely have I seen companies implement programs where they will take the base down and add a bonus that one at all like really do you take it down and tell me to give you less money but give you a lot of upside, except in sales commission jobs, to your point, and that's because you want that person motivated to produce. You know that term. We want producers, and if I sort of give you too much money on the front end, then you are not incented and motivated to go out and hustle because you've got this guarantee In the context of corporate jobs. On the other hand with the exception of the CEO that's really interesting, and sometimes you know the C-suite we generally try to, as employers, pay people what they should be making from a market analysis standpoint. So your base salary is what your base salary is.
Bob Goodwin:Now.
Johnny C. Taylor, Jr.:I really want to make this important point about this. Ceos and we read these crazy salaries for CEOs You'd be surprised at how little base salary the average or you would, because you know the space that the CEO of these big companies. You hear about the $30 million package. Well, the reality is oftentimes their base salary is only $750,000 to a million, and I say only understanding that people out there are just shocked at it. But I'm saying only as a percentage of a $30 million package. They're only guaranteed $750, or $1 million or $1.2 million, and then everything over that they've got to earn.
Johnny C. Taylor, Jr.:I mean, they have got to hustle and I know we're going to get to talk about this and there are a lot of things of which they have no control. You could be, for example and we're going to we all see right now there's been a at least a postponement of the strike from the port authorities all over the country. But what we know is you could be in a freight business as a CEO doing an amazing job, kicking butt and things over which you have no control. A strike by someone else's employees could impact your salary and guess what. It ain't fair, but that's the deal, right. So CEOs and senior executives often carry a significant I would argue, in many instances disproportionate amount of their pay is what we call at risk. But the average employee who gets five, seven, 10% is not confronted with that. We are doing it to motivate you to be even better, so that the organization's better, and then we share in the profits with you.
Bob Goodwin:Yeah, so you and I are very aligned on assume good intent, but I like to say, if and should are the two biggest words in the English language Touche, I mean it should be a certain way, but we've got courts full of cases where things aren't the way they should be. And so, and you know, moving past CEOs and I don't disagree with anything that you said about CEO comp and at risk, but I'm thinking about the HR manager and a company has taken a philosophical compensation decision to say, well, you know, like we need to have more people incentivize it's like we're finding that time to hire it's just taking too long to put butts in seats. And so, you know, 2025, uh, you know, let's just kind of work with your example. I'm not going to take your pay down, I'm also not taking it up, so you're not going to get your three percent or five percent, you know, merit increase this year. What we're going to do instead is put a bonus opportunity out there for you to reduce the time to hire from.
Bob Goodwin:I'm making up a number from 45 days to 35 days, okay, and then the employees like, I guess, like are you going to increase the marketing support? Like what else is going to happen, because it wasn't like I wasn't working hard to begin with. What else is going to happen to help me make that number? And so for me it feels like that's good for the company because they want to drive that KPI to a better place of time to hire in this case but they also get to do it sort of like they only win. The employee could lose for some reason because they don't hit the KPI Yet the company didn't have to pay the merit increase and the only time they paid the bonus is if you hit the target. So it sort of feels a little one sided potentially to me.
Johnny C. Taylor, Jr.:Yeah, I mean there's a potential there, but I can tell you, fundamentally none of us roll out bonus plans that are not attainable. They may be a stretch, but they have to be attainable. What we know and you know, this compensation that someone deems is totally unattainable because the targets were too high, the goals were not articulated. Well, whatever, typically doesn'm not going to hit this. They asked for a reduction from 45 days to 35 days. The industry norm is 40. So they're asking me to do the impossible. Then you don't change behavior. People then either quit or they decide I'm going to take this $90,000 salary and live off of it, because the chances of me achieving the 30% bonus or what have you are slim to none. Then, therefore, the company doesn't win. The company doesn't win at all. What the company wants is you to stretch and be bonus for it, so as the company benefits, you benefit.
Johnny C. Taylor, Jr.:Philosophically, I'm not bothered by that. And why do I say that? Especially as an HR professional? You can appreciate this. We often say we want to be business leaders. Hr is the critical in a knowledge-based economy, people matter. So guess what? If I am responsible for talent acquisition, the faster I can get butts in the seat, the faster those people can do work which benefits the company and therefore I am literally a part of the business. I'm not a partner to the business, I'm a part of the business and I'm driving business results and you should be bonused for that.
Johnny C. Taylor, Jr.:The flip side is, if it doesn't work out and there literally are times that you have no control over them I talked about the 40-30 strike, for example. But what if you say I'm going to reduce the time to hire from 45 to 35? And let's say the data suggests that 35 is an attainable albeit stretched, but an attainable goal, and then all of a sudden, the economic development department of your city announces I'm sitting in Alexandria, virginia, name it Amazon's now going to put a tub quarters in our neighborhood. The competition came and when we designed the plan, we didn't know that you were now going to have to work hard to maintain the 45. Forget the 35 days. We didn't know that was coming. That doesn't mean that the company set you up. It doesn't mean that it means we actually, now more than ever, need you to work harder because we've got a new competitive threat in the market. That's what happens to CEOs.
Johnny C. Taylor, Jr.:I think that would be perfectly fine for a manager of HR, talent acquisition who's responsible for bringing in talent, because the company can't achieve its goals if you don't put people and bring people into this organization quickly and the right people. Again, fundamental to this all is the goals when set, and this is we have to trust each other, and you and I talk about that a culture where your organization, your employees, actually believe that the employee is working in their best interest and vice versa, and then say you know what? We're going to hit the bonus a lot, but there are years when we're not going to hit the bonus, and that's OK too. So that's the other big thing I'd like you to react to. The assumption that people have is every year you're going to hit the incentive target or better, and that's just not the way the the world works, right.
Bob Goodwin:OK, I OK.
Johnny C. Taylor, Jr.:So, practice.
Bob Goodwin:I know I can see no no, no, no, no, no. I mean it's like to your point. The incentives are there to actually help the company achieve its objectives. So you know, going in with the assumption that we will, but we kind of know we're not going to do that every year. You know there may be lots of externalities, like in your amazon example, which is all true, and it's happening all the time.
Bob Goodwin:From a budgeting perspective, we both know the cfo is planning on day zero to pay out less than 100 percent of the target incentives. Everybody's going to hit every number and they're going to pay the full bonus. We bonus the pool, bob.
Johnny C. Taylor, Jr.:Do what we accrue for a pool. If I tell you that I think we're going to spend $500,000 a year on bonuses, poor CFO who doesn't budget for that $500,000. Now, throughout the year it may become clear that maybe that $500,000 needs to be increased to $750,000, because the company is doing really well. Conversely, we're not doing well, so we can release some of that accrual. But I don't know that it's common practice or even, I dare say, very rarely would a CFO or CEO sit down and say let's accrue for less or Well, OK, let me give you a real world example.
Bob Goodwin:This I know from firsthand. Experience is a company has, you know, 20 salespeople. Everybody's got a million dollar goal. If you add all that up, that's $20 million, but the company's revenue goal for the year is 18. Got it. They know that not everybody's going to hit. Nobody in the history of all the salespeople have hit their goals. So they know, going in that, yes, if you add up, if you add up all of the objectives, it's in excess of, because they're leaving themselves some margin for things to not all go according to plan.
Johnny C. Taylor, Jr.:That's, that was the point I was trying to catch. Now, listen, I will tell you and this I don't know the employer, but that's pretty bad form. But that's pretty bad form. And if that is happening, if you've done all of your math and you think realistically 18, maybe 19, but the chances of hitting 20 are slim to none. But you based people's target bonus based upon 20, shame on you. That's unethical, it's not cool and you will not keep employees. When that story gets out, the people are gonna say listen, you're gaming the system and thus this conversation is once you do that, there's literally no trust and you immediately erode your employer brand. If you do that too many times Now, that doesn't mean there's not gonna be a year when you put stretch in there and stretch may be 19 to 20. It may be 18.5, but if you have a pattern and practice of putting in place unattainable goals and now people's risk is their overall compensation is not likely I'm not at risk, but it's likely at risk then guess what? You'll lose the game. That doesn't last long.
Bob Goodwin:Well, fair enough. However, in my experience across multiple companies, just from setting sales targets, that's not uncommon.
Johnny C. Taylor, Jr.:I want to say sales before you go, because I do want to say something. You've qualified Sales compensation is a very, very different monster than 90% of the other jobs that we bonus. I mean to be fair, it's unique. For example, and I think this is important there are sort of annual bonuses and then there are commissions. All of that is a part of, and typically people who are in HR and finance and legal and corporate they get. They're part of a target pool and they're looking at traditional incentive based compensation plans. Salespeople typically, you know, have aggressive targets and that's a little different. So just for our listeners who know, yes, sales, let's use the term commission for for those purposes and let's use the other thing they're all incentive plans but one is sort of a bonus system and the other one is a commission system. Is that OK, to make that distinction?
Bob Goodwin:Yeah, I'll buy that. One of the things that there are forms of targets and goals, for example, some could be very objective and measurable right, we reduce time to hire from 45 to 45 or whatever. Or it could be subjective. Like you know, johnny, one of the things that I'm looking for you this year is to be, you know, more of a mentor. I'm looking for you to be more collaborative, something that's a bit more ambiguous, something that might be a bit more subjective, I think, and we can kind of break both of those down.
Bob Goodwin:But you know, on the objectivity part of it, again, I think you know one goals could be inordinately high, and you know, and we have to explore and find out, well, what's too high. And well, we kind of blew it in 2024. We shouldn't have set the goals quite so high. Again, sorry you didn't make your goal, but we didn't have to pay you either, but we'll do better next year, I promise. Secondly, it could be moving the goalposts and we could have something like Amazon coming in back to your example and say, well, we weren't counting on that when we did the plan last October, but now here they are. So now I need to change the goal because the environment has changed. I think that on the just, even the numbers, which on their face it sounds less fair, which on their face it sounds less fair. Here's a number.
Johnny C. Taylor, Jr.:We all understand the number but do we and do employers have the right to change those numbers? Well, the answer is yes, and, frankly, that's good and bad. So I hearken back to 2020, when we had this thing called COVID. Remember when we set budgets, bonus budgets and everything called COVID? Remember when we set budgets, bonus budgets and everything oftentimes, and all of those numbers, it was in the prior year. None of us knew that the world was going to shut down, and so we set targets. A lot of businesses and employees forget this. Once we were hit in March, february, march of 2020 with it, they reset and they took some of these goals down.
Johnny C. Taylor, Jr.:A number of organizations paid bonuses when people did not meet those numbers right, so it cuts both ways. There are times when bonus numbers are, you know, there are all sorts of externalities over which you have no control, and that's the nature of the beast, and so I would say that I mean just had a hurricane that ravaged, as you know, the southeast part of the United States, and so the question is do you hold people accountable to those bonuses or do smart thinking and right thinking in my mind? Organizations say let's make the appropriate adjustment and make the appropriate adjustment and ensure that people are still incented and motivated to try to end the year strong Again. Once people, once your employees, realize that the goal is unattainable, they throw their hands up. I do want to say one other thing that's really important, because everyone says the bonus system is great when those externalities provide a tailwind, is great when those externalities provide a tailwind, but when they provide a headwind, everyone says, oh, that's so unfair.
Johnny C. Taylor, Jr.:I mean, suppose you know, using that same example, if you're in the market, you got 45 days, we wanted it 35. And then all of a sudden there's a major bankruptcy in your market. So now you can fill your jobs more quickly. Oh, you want that. That accelerates the likelihood of you achieving your bonus. And you're like, oh, that was a good thing. And you walk around like a peacock taking credit for having done the work Right, and the reality is there was something outside that helped you.
Johnny C. Taylor, Jr.:And you know and it's amazing to me when I talk to people about compensation it's imperfect by definition, it is subjective. By definition, you can quantify things, but at the end of the day, everything's subjective. So I want to go back to the example of something you used, and that was I want to be a better mentor to my employees. You actually can measure that.
Johnny C. Taylor, Jr.:Now we could debate whether or not what's the perfect way to measure it, but we have employees pulse surveys. We talk to employees, we can ask the people over whom you are the shepherd and, using that kind of language, hey, is your leader a servant leader? Give us examples of what Johnny has done that ensures that you are seen, you're valued, you're heard, and we can measure that every month, every quarter. We can measure it from the beginning of the year to the end of the year, and we can tie a bonus to something as subjective as is this guy or this woman leading you. So I just want to make sure when people say things are subjective or, yeah, everything's subjective, there are a few hard numbered things in industry, but we can measure a lot more than we do and you should hold people accountable for it.
Bob Goodwin:Okay. So you may have just answered the next question I'm going to open up here, which is some unconscious bias. Yes, okay.
Bob Goodwin:So, there may be favored people, people, groups or other, I don't know attributes that we have a preference for, for whatever reason, and maybe it's my bonus is tied to this right and it's on down to my team and through the organization. But you know, and I think the survey thing that you said you know could be part of you know, introducing some more objective data into the analysis. But we're still people dealing with people and again, you know known biases and unknown biases that we might have and how that can start to infiltrate the reward system.
Johnny C. Taylor, Jr.:Yeah, and it's real. You've identified an issue. I don't want to make light of it because it is a serious issue, but that's where you'll love this. At the work wire, the HR professional becomes so important, so critical to an organization. Ultimately, employees have to believe that their employer is fair and that they are trying to do the right thing. Will they always hit it? No, but I can tell you, at every organization that I've worked in, after all, the numbers come in from the departmental managers and they say this is what I'm going to give Johnny and this is what I'm going to give Mary and I'm going to give, et cetera. We, any sophisticated, decently not even like cutting edge HR function, will go through and they'll do all of this analysis to make sure that it's really odd that the women are getting lower bonuses on average and we tie it to performance of the individual. I'm going to now look at all of the performance ratings. Why is Johnny getting a higher bonus as a guy and he had a B rating and his female colleague had an A rating and she's getting a smaller? So that's where HR takes on a little bit more of its enforcement and not enforcement, yeah, legally, but also it's keeper of the culture responsibility.
Johnny C. Taylor, Jr.:You told me that I'd be treated fairly and I want HR to make sure that that happens in compensation, in terms and conditions of employment generally. So I'm a big, big proponent of HR not just collecting the data from the department managers but actually analyzing that data to help solve for the unconscious bias. Now you've said this. There is a real, by definition. All of us have some level of unconscious bias, everyone, and it may not be in the protected categories of race, gender, national origin. It could be I just happen to like Bob better than I like Mary, and that's what it is. I could be a female who likes a male better than I like a woman, and not in a sexual assault, I'm just saying in the sense and so her personality lends me to want to motivate her more than the next person. Those are the things we do have to solve for, because fairness has to be a fundamental premise of any compensation program.
Bob Goodwin:Yeah, and just to go back to a point that you made in a different aspect of this, having objective data to compare these things to, that's right, because in isolation they can get lost. But when we say no, but look, johnny's a B, she graded an A, but the comp doesn't align, that target isn't in line with industry norms, pulse sort of things that we can look at to dial out the subjectivity or any unintended biases that might exist Sometimes what happens is HR will come in and we'll say let's make sure Johnny is treating all of his people fairly.
Johnny C. Taylor, Jr.:He's in the HR department and his A's and I think it's really important that we focus on across the enterprise that we do a calibration. So Johnny's A performer in HR only gets a 10 percent bonus. The CFO is a tougher grader and therefore her eight performers only get 8%. Well, amazingly so, even within her group it may look like there's no bias, but there's bias across the enterprise. It's really important that you look enterprise wide if you want to create fundamental fairness. People talk, now more than ever. You know, in our generation you didn't talk about your salary at working to your compensation, how these kids do, and they talk across the enterprise. So it's really important those of you who are listening out there that you ensure that there is fairness across the enterprise, not just within departments.
Bob Goodwin:Well, and that's what's encouraging to just see how much more prevalent people analytics are, yes, and that we have the data and the tools to do this, where before it might have been a bit harder. I just want to just, for a couple of minutes, explore the things where it can go sideways because of the employee, sideways because of the employee. So, for example, if you tell me that again we'll just keep using the same example of time to hire is the main thing, but I kind of go crazy on budget for marketing expenses or for whatever reason, there's some reason I can gain the system. Or 80% of my bonus is tied to this one measure. I kind of forget the other 20% because you've kind of told me this is the thing you really really, really care about and I start to ignore things.
Bob Goodwin:It could be that, man, it's flipping November. I'm not going to make my full bonus, I know it. So I'm just going to kind of sit on this until January when the clock resets and I've got an opportunity again to re-earn it. So I want to make sure that there's no dynamic here. This is all the bad employer and the good employee. People are people and we sometimes do things that maybe we're not everybody's proud of but might be a little harder to see, and so I just want to make sure that we also kind of take just a couple of minutes to look at. You know, employees aren't necessarily lily white in this all the way either.
Johnny C. Taylor, Jr.:Right? No, I mean, the bottom line is we all gain everything. I mean, life is just a big game in some ways, and especially on comp. I can't tell you the number of salespeople who, once they so, let's say, you've got a $50,000 target bonus and it's capped and you're in October and you've met your number You've seen people say, well, let me move this sale into, let me slow pedal it so that it starts in January. I don't think that's bad. It's understanding the rules of the game, and organizations who design these programs have to understand that. That's the way it works.
Announcement:Again.
Johnny C. Taylor, Jr.:I assume, good intent. It's not even that you're being a bad player, just smart. Now what I would do is go back to HR and say, okay, maybe we should uncap it, maybe we should provide some additional incentive for people who closed in the last quarter. So the first three quarters are this way. I mean, there are all sorts of nuances, ways to tweak a system so that you can take most of the gaming opportunity out. But at the end of the day, as you pointed out, just like there's some not great players on the employer side who will game it, there are some employees who are not, you know, totally clean. They don't have, you know, clean hands either.
Bob Goodwin:And we've even got you know on return to office, johnny, you know, with presenteeism and coffee batching. I mean, that's actually a form of this, that's what you told me to badge.
Johnny C. Taylor, Jr.:I mean, that's actually a form of this.
Bob Goodwin:I'm showing up. That's what you told me to do. I'm here, so I swipe my badge.
Johnny C. Taylor, Jr.:But you know what you don't. You assume most people don't play those games and, as I tell my organization, as opposed to as opposed to walking around assuming all of you are bad players or trying to get over in the company, what I do is keep my eyes open, my ears open. I listen and talk a lot and when I find someone who is not living our culture, which is gaming the culture, we get rid of them. It's that simple and it's not because we're trying to be rough. But I'm not going to overcorrect and now try to literally make the rest of the organization pay for what are the acts of a minority. That's not what we're going to do. So that's where HR comes, in his sense of listening and learning and trying to figure out. We know the people who are playing fairly and we know the people who aren't. Similarly, the employees and applicants know the companies that game the system as well, and ultimately, people choose to work with you and they just won't do it for long.
Bob Goodwin:So, as we start to wrap this one up, what occurs to me is, particularly for companies that like hey, this kind of trend towards more incentive-based compensation, which I'm a fan of.
Johnny C. Taylor, Jr.:I'm a fan of that, so let me start with that.
Bob Goodwin:As am I, people that are maybe getting deeper into that pond and looking beyond theC suite or beyond salespeople, for how can we bring more people into this incentive-based type of a compensation environment?
Bob Goodwin:Just to go in with eyes open and again, this will always, I think, for you and me come back to assume good intent on right on everybody's part, but to be smart and to at least sort of think through hey, if we put this out here as an incentive, is there any unintended behavior we might be encouraging, whether it's short-termism like I'm only going to focus on the short-term and not the long-term for the, the company, or just any other behaviors that. That, to me, is the big watch out is, if you're telling me you want to pay me to do more of this, is that going to somehow come at the expense of some other good that I hadn't completely thought through?
Johnny C. Taylor, Jr.:Yeah, and that's, that's, that's the way and that should be the guiding principle of our work. And then I would just lay on top of that constantly adjust it. It's a plan, right, you do it one year and you'll learn from it. The next year you tweak it a little bit, not too much, because people look for stability in their compensation plans, but just modest tweaking, as we both learned. If you at the end of the year say, gosh, it wasn't fully, fully, 100%, as fair as it could have been to the employees, then the next year one acknowledge it, talk about it transparently with your employees and say, therefore, we're adjusting for this reason. So I've found the biggest thing is to do everything that you've said, but also be transparent with employees about their compensation and how you are trying to respond to what, by definition, is subjective.
Bob Goodwin:Yeah, anything else on this topic, johnny, before we wrap this one up.
Johnny C. Taylor, Jr.:Yeah, the only thing I'd say is is that it is the hardest thing to do, frankly, it is to pay people properly, because none of us are paid what we are worth, by definition, people properly, because none of us are paid what we are worth by definition, right, no one is. You can be paid handsomely, but we all think we should be paid a little bit more. So it's, by definition, hard to quantify, but good employers are doing their best. But let me tell you, increasingly and I want to talk about this on another work wire is it's becoming tougher and tougher for employers to keep up with the demands, the wage demands, of employees, because it's not the employer who increasingly doesn't want to pay you, it's the consumer who is increasingly unwilling to pay a higher price for the product or the service.
Johnny C. Taylor, Jr.:So the employer is actually right in the middle. You make five bucks an hour. You want to make six? Hell, I'd pay you 10. The customer says I'm not going right in the middle. You make five bucks an hour. You want to make six? Hell, I'd pay you 10. The customer says I'm not going to take the increase. So that is something to keep in mind that when it comes to compensation, there's a squeeze going on as the economy tightens and consumers are unwilling to fund these new compensation plans.
Bob Goodwin:And then the other constituent who's part of this is the shareholders, unwilling to eat margin to absorb the increase.
Johnny C. Taylor, Jr.:All of them up, that's right, awesome, johnny.
Bob Goodwin:If we picked easy topics, this wouldn't be any fun.
Johnny C. Taylor, Jr.:That's right.
Bob Goodwin:Thanks so much for your time today. Listeners, thank you so much for taking a few minutes to spend some time with Johnny Taylor and I today on the WorkWire. If you've got a moment on Apple Spotify, wherever you consume your podcast, just leave us a rating, a review, and if you've got any suggestions for topics for us, you're welcome to email me at Bob at Career Club. Johnny, thanks so much, and another amazing episode on the WorkWire.
Johnny C. Taylor, Jr.:Thanks for the work, bob. All right, have a great weekend, my friend. Thank you, you too.
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