So far in this series I’ve covered seven of the 10 measures that I found helped me build high-performing cultures in my companies by putting the SCARF model into practice:
- Private offices for all employees
- An open meeting policy
- Having an anonymous feedback mechanism
- Open book management
- A clear mission, vision and goals
- Giving employees some control over their work environments
- Making new employees a part of the team.
Let’s look at 8-10:
8) Objective pay policies
One of the most contentious areas for employees is the area of pay. It is only natural for us to feel like we are worth more than we are paid. Who doesn’t want to make more money? The real problem arises when employees feel that decisions on pay are made arbitrarily – or worse – that management is showing unjustified favoritism. To avoid these issues, I have always tried to make pay decisions based upon objective data, not subjective opinions.
Unlike many companies where raises are tied to yearly performance reviews, I decoupled pay from the review process. We tied starting pay and regular raises to third-party data showing the value each person had in the market, which made compensation conversations much less contentious. Additionally, we analyzed employee salaries every six months based upon their starting date instead of reviewing the whole company on an annual basis. Because of this, the entire company wasn’t focused on (and distracted by) finding out their pay at the same time every year. Fundamentally, people aren’t motivated by pay, but they can be demotivated if they feel that they or others in the organization are paid unfairly. This includes if they feel the CEO is over-compensated for their level of contribution!
9) No employee caste system
Fairness and status as defined by the SCARF model often form a powerful negative combination where employee perks are involved. The problem with perks in general is that they divide the workforce into classes: those who get a certain perk and those who don’t. Everyone knows that for a team to perform at the highest possible level, the team members should have a “one for all and all for one” attitude. This attitude is really hard to develop when employees are split along class divides.
No one expects the CEO to have the same office as the lowest level employee, but when the CEO feels the need to construct an executive wing, it will certainly cause some grumbling. You would think that things like separate executive eating areas and parking spots would have gone away decades ago, but they still exist in some companies. In many large companies, the ultimate perk is use of the corporate jets. I have seen CEOs put a travel ban on all the employees, while the executive team is flying around in private jets at $10,000 per hour! Most people do not want to be led by someone who seems to make a habit of separating themselves from the people they are trying to lead.
10) Promote learning and growth at every opportunity
What I have always enjoyed the most about business is the challenge of reacting to a constantly changing business environment. To meet that challenge, it is important to encourage employees to continuously improve themselves in their skills and market knowledge. During the quarterly goals process, I always require employees to include a continuous improvement goal. Supporting employees who want to go back to school, attend training sessions or expand their market knowledge can provide tremendous long-term value to a company. Employees who are growing in their skills and knowledge will be much less likely to consider changing jobs and will feel that they are increasing their status.
I hope the items in this series will help you translate the SCARF model into a concrete set of policies and management concepts that can drive a high-performance culture. CEOs who understand that the right culture is crucial to maximizing business performance are more likely to be successful.