Ep. 18: Compensation – The ONLY Way to World-Class (4 of 4)
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Speaker 1:the with nine twenty two cross calculations over twenty seven years on a monthly basis, and then systematizing the operational success patterns of the ninetieth percentile. Our intent is to get beyond the brag and the boast and simply share insights from our experience without manipulation or coercion to sell anything except helpful ideas. These messages range from intimate recordings from the Awakened Forest to concerts, national conferences, and broadcasts.
Speaker 2:It's another beautiful morning in the Awakened Forest, and we will proceed with our profound and extensive examination of compensation. Again, life is very much a mathematical equation. It has to do with inputs, determining the quality of the outputs, cause and effect, and really merit when you get down to it. Because again, all life is compensation. And if we have a desire that's not being fulfilled, or something we want to attain, we have to take a look at our inputs, and that is compensation.
Speaker 2:Again, receiving something of value for rendering something a good or service normally. Now one of the things that CEOs have to deal with, and of course I've trained thousands of CEOs over the years, they come in all different varieties, some strong, some not so strong, some relatively weak often. And the fear barrier is what gets in the way so often when implementing a performance based or a merit based compensation system. Because people feel everyone's going to quit, or we're going to lose good people, or it's going to change the holiness of the mission, where we'll be more motivated by money than mission. And the truth is they are phantom fears.
Speaker 2:Everyone is not going to quit. You're not going to lose your good people. Yes, you will have nervous people, but they normally need to be nervous. In fact, your high performers, your high achievers are going to be turned on by this super pay system that you're going to introduce. And surprisingly, you will bring this element of health into an organization because when an organization is based in a very fair way, in a rich way, a way that actually rewards for people accomplishing things, again overcoming the obstacles or the resistance, yes, you're going to have a healthier workforce because it's earned, and that's the point.
Speaker 2:Our path to happiness comes through that valley of pain. So, with this said, most of the work when implementing a compensation system doesn't come so much from creating the actual methodologies, but rather from overcoming the emotions associated with changing the way people are paid. So, so much of this battle is emotional. Why? Because so many of the methodologies have already been created.
Speaker 2:At MultiView, we have tons of them. We have them for, obviously, health care. We've done them in music. We've done them for brokerage houses. Through my career, I've done them for factories, retail, country clubs, restaurants, even agriculture.
Speaker 2:So there's lots of different ways, and there'll be similarities, and there will be things that are very specific to different business sectors. But so many of them have been worked out. Now the multi view ones do tend to be a little bit exotic. They tend to be fairly simple and straightforward, but they are different and unusual. It looks like we have a load of rock coming in for the church.
Speaker 2:Of course, you know, everybody builds a church, don't they? So the CEO has overcome, again, the emotions or the fear, you might say, that everyone's going to quit. And therefore, the CEO, and I'm really speaking to that specific position in the org chart. Why? Because that person has the authority to change the processes and systems.
Speaker 2:Right? And so the CEO needs to have some backbone. That is, you've sold yourself, and this is why I've spent so much time with the with and that's why I've spent so much time with the philosophical explanations behind the comp system, that you have these deep roots that when the winds of negativity or the winds of doubt or the different frazzled personalities come your way, that you can withstand it because you know that changing the comp system into a richer, fair system has directional correctness. And that's such an important concept to have. And when you really think about this and why it's so just, it's because you're really addressing one of the major frustrations or problems in most human organizations, and that's the lack of accountability.
Speaker 2:Right? When people don't do their job, when they don't own their lives, when they blame others and they live in this world of victimhood and things don't get done, well, it comes back to lack of accountability. Whereas high accountability cultures, those that understand Six Sigma standardization, that understand world class, all have wired accountability in many different layers in the organization. So it's in the comm system. It's in buddy systems.
Speaker 2:It's in all kinds of things. And, again, we're trying to induce a state really of self regulation. This position state of self regulation where people need very little supervision or management, that they can tell if they're out of standard, they're doing too much of this or too little of this. That's what you want to achieve. You want a workforce that's full of mature people and not children.
Speaker 2:So the CEO has to get completely sold out, bought in to this idea before you roll out the comp system. And, of course, we've talked about working with the winners, those people that you wanna pilot and that you pilot with the winner because you want to have your champions in place. Now when a CEO is putting in a system, one of the things that I think is absolutely needed is this idea of trust or being trusted or being trustworthy. I have not had great difficulty in implementing compensation systems, and this is with many, many companies. Why?
Speaker 2:I suspect that I can be trusted on some level. People know that I'm not a liar, that I don't exaggerate things, that I shoot straight. And normally, I will sit in the position state of the employee or the worker. I will do that job so that I have some basis of authority, or you might say, where you've gained trust. It's just like when I got into the hospice world and home health.
Speaker 2:Well, I was an accountant. I was a CPA. I was a system analyst programmer. I'd never done this before. And so I felt it lacked integrity if I didn't go out and actually make visits with the clinicians, you know, with the nurses, with the CNAs, with the social workers, with the physician.
Speaker 2:Whatever the clinical discipline was. Why? Because I just felt I had to know what they were doing. If I was going to introduce ideas about productivity or increasing quality, I had to know something about it. Just like if you're making automobiles in Detroit.
Speaker 2:Well, you better know how much that bumper costs or how a car is put together before you tell the workers how to do it, how to do their job that they do every day. When you have this superficial glance at their work and proclaim yourself as the expert. That just doesn't hold water. People want to be led from the front, and I think the compensation system is a great way to do that. For example, to me, the CEO and the leadership team are some of the first people that need to change their pay.
Speaker 2:And you wouldn't believe the kickback I get about that. Oh, it's easy to make decisions about the plebs, you know, the peons, the worker. Oh yeah, let's change their system. Oh, that would be great. And then you might go up to the immediate manager, oh, ask us to actually have to bet on ourselves and our performance.
Speaker 2:Why? You can't do that. So I say you start from the top. So this idea of being trusted, get in the trenches with the troops. And I know with large enterprises, there are many activities, are many jobs and duties within every organization, And it would be completely impractical to do that work for a month.
Speaker 2:But let me just say this, do your best. Do your best to learn what people do. Talk to them, especially when you're going around the office and circulating among your staff. I try to do that every day at our home office. Obviously I can't do it with our data center.
Speaker 2:In Florida, or some of the different locations, there's physical impracticality, you might say. But do your best wherever you're at, and it will be communicated. It will be felt really from all your different locations and sites even if you can't always be there physically. So the CEO has to be clear on this. You have to realize that you're increasing accountability and that you have to be trusted.
Speaker 2:And one of the things you're going to notice with your leadership teams, those, again, that you're soliciting ideas, is that they will try to override non standard behavior performance over time. Right? They'll soften it and say, Well, that's too harsh. Why? Because they're uncomfortable, because they're nervous, because they're not confident in themselves and how far they can push human beings.
Speaker 2:I always say on the side of pushing people too hard. You can always decrease your expectations. Whereas if people get used to easy work and then you ask them to do more, much, much harder. So on the side of pushing people too much. But you need to have mechanisms where every service failure or complaint, or anything that is non standard, but especially these complaints and service failures, have to be communicated to the CEO when it happens.
Speaker 2:We want the CEO to feel the pain of the broken vow, of the broken promise. And this provides what? Great motivation for the CEO to make those structural moves. Now one of the things that you'll find yourself having to look at, since we can't just add more salary, and that's where a lot of people go, well, I don't see where this works. And that's how a lot of people just don't understand, and they presume that it's always about adding the carrot, adding more into a new comp system.
Speaker 2:But again, this negative aspect of compensation, this disincentive has to be emphasized, and that's why I overemphasize it in a teaching setting like this, is there has to be some negative aspect, and you have to make room for that. Well, how do you make room for changing people's compensation or pay? Well, a lot of people are gonna have to be rebased. If they're salaried, they'll have to take less salary. If they're hourly, they'll have to take less hourly.
Speaker 2:And of course, this will all be filled in by these dish will all be filled in by these additional ways that people are paid. Standards pay, where a portion of everything that you make is based on doing the standards of the organization with no stretch, with no goals. This is just doing your job pay. That might be 20%. You also might have happiness pay, and that might be another 20 or 10% because you need a workforce with good attitudes.
Speaker 2:Right? Happiness pay. We want to foster happiness. We all want to be happy. When we think of our kids, we say we would like them to be happy.
Speaker 2:Do we not? And so why not pay people for being happy? With an elegant system that rewards them for that, and especially penalizes them when they come in with a crappy attitude and pull everyone down, because you can lose exceptional employees with one disgruntled personality walking in the halls, pulling everyone down. So much of the job of a manager or a CEO or leader is to create this healthy culture, this healthy work atmosphere that inspires. Happiness does a pretty good job of that, and people know when they're not happy.
Speaker 2:So this rebasing has to really be done, again, to make space for these other ways that people get paid. So we have our happiness pay that we just discussed. We have our standards pay. We have the minimal base. And then you have individual pay that can shoot out exponentially.
Speaker 2:Like in our organization, well, we may have people at a certain base, let's say it's 50,060 thousand dollars well, they may make a quarter million dollars based on all the extra pay they get for their individual performance. And a lot of people, when they first come in at that, it's just like, God, I don't know if I can do that or whatever. But that provides such motivation for the talented. And, of course, it does the opposite. It drives the weak, the unconfident away because unconfident people are never going to be able to render a confident experience.
Speaker 2:You want someone that knows the business, knows themselves, best on themselves, best on the organization, and thus has the confidence to lead people through those very things that they had to learn through experience. And the great thing is that it's earned. So therefore, it has this deep level of satisfaction and all these things that we've talked about. So getting past the fear bearers. Everyone will quit.
Speaker 2:We have never seen that. Let me say that one more time. We have never seen that in the approximately thirty years of Multiview Incorporated. They will not. But that fear, that phantom fear, holds organizations in check, even though it's not the true.
Speaker 2:And this is where so many human beings are illogical. We think that we're rational people, that we put all the facts that are known together and then step back and, you know, make a sophisticated motion to move in this direction because obviously it's logical, it's rational. Human beings don't do that. The fear thing, the whether it's a physical fear, whether it is just an emotional thing, whether it's a societal expectation, these are all fears. And the thing about it, this fear thing, is recognize that your competitors are not going to go in this direction.
Speaker 2:Thus, the herd is slow. The huddled masses are always gonna be hanging back watching the outlier, watching the real leader in that business sector move forward and then scratch their heads. Well, how they do that? And they go, oh, they have a different comp system is a big part of it. And they'll go, well, that's good for them.
Speaker 2:And, you know, they'll squirm around and do whatever. They won't go forward. I can assure you of that. And that should give the courageous CEO some comfort that the herd is not going to follow you until you inflict enough pain on them to motivate them to get some courage. And one thing you're gonna find, leaders and CEOs, is that with a great or even a good compensation system, the impossible will become possible.
Speaker 2:But with an average system, if you're paying salary and hourly, there's no dings for people not doing standard, you're only gonna get an average result or performance. That is just the way the world works. We're back to the mathematical equation of your the quality of your inputs with your outputs. So you're never gonna get there. Again, after twenty seven years of measuring hundreds and hundreds of data elements from approximately a thousand some organizations on a monthly basis, we have never seen anybody ever get to the ninetieth percentile without using creative performance or results based comp systems.
Speaker 2:Of course, a leader asks you introduce the comp system, you've got to get past the BPUs. And what are the BPUs? These are the business prevention units. It might be HR, it might be finance, it might be compliance, it might be a spectacular leader of one site. But you've got to get past these people because they're going to say, We've never done it like this before.
Speaker 2:It can't be done. It's likely illegal. So you've got to get around to this. And also, you'll always find in most organizations specific positions where you find a difficulty applying whatever methods you've come up with. And my advice is this: don't get bogged down with any specific position, area, or department.
Speaker 2:Sometimes I'll go around a department or area completely. I mean, they could be doing great, or the hassle factor would be too much, take too much of our focus away. And it's better to get the things you can get accomplished, accomplished. This gives you a sense of movement, of momentum, and then you can go back with your problem children or those puzzles that you haven't worked out with. Sometimes they'll just say, hey, you just stay being paid the way you are right now.
Speaker 2:Sometimes you'll find the AP clerk that is doing a spectacular job, but just is of such a nervous nature that they just want that measly hourly rate, even though they could make more in a new system. I suspect probably just the selling job needs to be altered a little bit to gain acceptance. But you always have the option to move around your problem areas, so don't get bogged down by any specific position, area, or department. The big work in the comp system is really selling the system, and that has so much to do with the rollout of the system. Yes.
Speaker 2:We can get all our methodologies, the math all worked out, our plans. But, again, you have to get the ideas of why this is a good direction, why it has directional correctness into the minds of, obviously, your leaders because they're gonna replicate at that 70% level as well as in the workforce in general. So it has to be inspiring. So therefore, brand it. Name your compensation system, and if you can tie it back to your colors, some of the iconic themes or beliefs of the organization.
Speaker 2:But it has to be motivational. Everything you do in life, again, is done for marketing intent. I made that statement. I'm not going to go into the deep philosophical explanation behind that. But you're selling the compensation system.
Speaker 2:You want people in the factory next to yours or your competitors talking in the lunchroom and around the vending machine about the comp system that you have in place and people that make more, and it's a fair system. And they've got this happy, healthy culture. So mega, big, better, or spiritual in nature, if that's what you're trying to do, but just realize that you're using this to benignly manipulate the workforce to have, again, a healthier outlook about the job and about work. Now I do get the question quite often, can we implement this compensation system in pieces or incrementally? And of course, yes, you could do this.
Speaker 2:And in some cases that's the preferable thing to do. In most cases I try to put the whole thing in at once with these pilots going on, because these pilots of course build belief and these people do outrageously well, and you pilot with the winner, and you have good success. But sometimes when people talk about incrementalism, it has to be, well, geez, we're losing 10% right now. We want to get to 20% profit, but that's a 30% swing. Can we set our standards that just break even now?
Speaker 2:And then later on, we change the standards, the profit standard that is, to 10% and then 20%. And to me, when you change these standards, you confuse people. So that type of incrementalism, I don't allow. Put the pedal down to the floor and go. If you're losing 10% in your organization right now and you're gonna do a turnaround to to 20%, 20% is the new profit standard.
Speaker 2:Anything below that is unacceptable. And so you put the pedal down all the way so that you don't confuse people with ever changing standards. But putting the compensation system in pieces, that is in different business segments, just like I put it in home health before I ever put it into a hospice, yes, that's completely doable. And then you move it over to the inpatient unit. And of course, you wanna get indirects and leadership on board even before that, if possible, so they can lead from the front.
Speaker 2:So we've talked about, again, coming up with your measurements, your methodologies for paying people, that's going take about 25% of your time. The remaining three fourths of your time is going to be rolling it out and selling the idea. And you can put this many ways that you are evolving the organization into a school or a monastery where spiritually oriented people come. And hospice work, that works great. But again, if you're doing anything with customer service, which almost every human organization that's serving other human beings has to have customer service, well that can be your spiritual element, this noble endeavor or journey that you're on.
Speaker 2:So the school, monastery, again, like to look at MultiView as a ministry. And we point out that even that hourly and salary pay methods are the most greedy methods because they severely limit employees earning potential. Now think about that. A lot of people don't point that out. If you're getting a salary or you're getting an hourly amount, guess where all the big wins, the payouts, the huge payouts, where do they go?
Speaker 2:They go to the upper echelon normally. Oh, there might be the incidental bonus here or there to portray generosity towards the workforce. But with hourly and salary systems, most of it's going to the top, to the shareholders, to the owners. So point out that salary and hourly are in fact greedy systems. And that we're gonna put in this system, and it's gonna be simple.
Speaker 2:It's gonna be simple city where anyone can look at this compensation system and in moments get it. Oh, if I do this, this is what I get. Oh, if I don't do the standards of the organization, this is what happens. Okay. Because complicated breaks.
Speaker 2:Again, your higher consciousness, your your higher intellectual and sophisticated systems are elegant because they are so simple and well thought out. But you want people to look at that comp system and say, I can win in this new system. And look here, they're gonna be the best payer. And I can see where slackers and slack dogs are not going to survive in this culture. The pay system will take them out.
Speaker 2:And leadership is what? Trusted. Andrew has told me that if there's any mistakes or if there's something unfair in the system, he's going to go to the back and print checks and make it right. And I've done that before. I remember one time I had a miscalculation and everyone got their paycheck and it's like, Oh, this is not good.
Speaker 2:I said, Folks, I'm gonna fix this. And I just go back into the accounting area and I come out with a bunch of checks and say, Here, here's the difference. And you can laugh about that, but that was extremely effective. Maybe you want to make a mistake on purpose. But they knew Andrew was not a liar and that I would make it right.
Speaker 2:And so that's always part of my pitch. We're gonna change the system. Please don't be scared. If we screw up, if we miscalculate, we're gonna go in the back room and cut checks. And that served me well.
Speaker 2:And of course when you're rolling out, you're selling it to everyone, you select your winner, you pilot with the winner, and you implement without delay. The importance of speed here can't be underestimated because if word gets out in the entire workforce, and this is why we're pretty tight lipped about it in the formation stage, If it if word gets out about this prematurely, people start to get nervous. Why? You're dealing with this survivalistic instinct or impulse in people that my nuts are going to be taken away and I may not have enough nuts for my family, for my needs. And this is all unnecessary if we are clear thinking, we have accurate thinking, and we just dive in without delay.
Speaker 2:Sometimes you will lose good people if you extend this too much. Let me just say this: You want your unconfident and weak or untalented people to be nervous. They need to be, these blessed subtractions. But you gotta have your winners. And if I detect, again, any nervousness with a superstar, I'm going to go have a one on one conversation with them, usually in a private place like your office or their office, and, we will go over it until I see that ease comes back into their face, their eyes light back up, and, yeah, we can do this, and this is going to be great.
Speaker 2:There also is this aspect of introducing in the comp system is the use of precise language. Yes. You're gonna brand your system, super pay, mega pay, blue pay. You're going to do these languaging maneuvers. But you also have to watch out for just common things that people say like, this is gonna be a pay cut, isn't it?
Speaker 2:Because so many pay systems or alterations of comp systems end up negative, or at least that's where the human herd goes. So never let anyone, especially your managers or any frontline staff that you catch, say it's a pay cut. No, we're doing this because we want to be the best paying employment option there is. Or someone says, Yeah, this is going to be a pay cut. You might say, Well, you know, I felt the way you did when I first heard about it with this new compensation system, but then I got to thinking about it, and look at this, this, and this.
Speaker 2:And normally you'll win people over with this. You want people to say that we're creating the best compensation system in our area, a fair system, and one that pays better than all the other employment alternatives. Now some of the best times to put in a new compensation system is if you haven't given raises in a few years. Maybe it's been kind of sucky. Yeah, we haven't been getting the sales or the increased revenue that we need, or we might even be going back.
Speaker 2:Well, that's the best time to be in a comp system. I think I've mentioned this in prior messages. If I'm hired to turn around an organization, and I'm a professional at turning around organizations, Any COs out there that that need a sidekick, a nice guy, but one that will shoot straight with very, very practical insights. Just know that this is part of what I do. I like this, and anytime an organization is on life support, they're out of money, they can't make payroll.
Speaker 2:Well, the first place that you go is changing the compensation system. That gets rid of your sub performers, because usually there's slack in the system, there's inefficiencies obviously, otherwise they wouldn't be in this wretched state that they are. But you drive out the underperformers, which what saves payroll. You motivate or help motivate your talented people, and they start to really accomplish things. We simplify the business, which further helps with clarity and results.
Speaker 2:And in a surprisingly short period of time, you find yourself back in wonderland. Again, just a few examples. I remember one we went in, or I remember one we went in and they were dying. Well, in a couple years, we'd put away $34,000,000 in the bank. I've got multiple ones where we put way over a 100,000,000.
Speaker 2:Of course, it depends on the size of your business. But still, these are fairly respectable amounts of money, because I always believe in reserves, and people are paid well along the way. But your comp system is key to turning around a company. So if you haven't given raises in a number of years, now's the perfect time to do this. And I mentioned that people know that I'll go into the backroom and cut checks if we make a mistake.
Speaker 2:That's an important piece of language to have. But it's also important to have this one, is that we will always, always, always be changing the comp system, because comp systems have to change over time, because we have to adapt, just like the natural world does, to the ever changing conditions. So you don't want to set up an expectation in the minds of employees that it's one and done, that will never change the comp system again. That's a fantasy. And it's a lie, because you couldn't do that even how badly you you wanted it.
Speaker 2:That's just not the way nature and life work. So we will change the system. We will make mistakes, but we will make it right. And let me add this point, any and all compensation systems will be gamed. Whatever methodologies we would put in place, people are gonna figure out how to maximize it for their own personal benefit.
Speaker 2:I remember I put in a system with about 30 physicians, and physicians are pretty bright humans. Well, they worked out that comp system right away, and that org, of course, always points out the defects or the flaws, because every system's gonna have some flaws. Is that not right? And so you make the subtle changes to correct it or whoever in the workforce, they're going to work out ways of doing this. Like anytime you have a system that's based on volume, scratch that and stop it with the physicians.
Speaker 2:So any and all compensation systems will be gained by people, and people will work out the ways to get the most for their situation. And that's just what human beings do because we all seek what? Gain. And people aren't doing anything really wrong in that. I mean, they are.
Speaker 2:If they know, this is not quite in the spirit of what the company was trying to do, I think we not do this. A lot of people, especially those of lower consciousness, are going to, quote, bend the rules or manipulate it, of course, not thinking of those higher ideals. I'd like to circle back to this idea of trust. Trust is so important. It's the key to a smooth transition.
Speaker 2:And we've discussed a little bit of how to gain trust by going around to doing some position observation, getting around with your staff, actually working on the front lines. But in our health care setting, or at least in the multi view world, people, they pay a lot of money to come to our training programs, and they're tough trainings, and a lot of times, and in most of them, you have to score perfectly on your repeated testing, and there's like 300 questions, There's philosophical questions, there's mathematical questions, whatever the job dictates. But one of the first things people do as they come around the mountain, this was before it burnt down, and now we're having to rebuild it after the forest fires. But one of the first things we had them do was go down into the studio, into the control room where all these famous artists have worked on music through the years, and we have the camera set up, and we say teach any aspect of a clinical visit for thirty seconds. One, two, three, go.
Speaker 2:And this is with CEOs, with CFOs, obviously clinical leaders, leaders of HR, whatever supporting or indirect area. And at first they stumble around. Some have it, but see, that's the mark of a true professional, is they know the business. In home care operations, hospice, home health, private duty, all of this, well visits are important. It is the basic widget behind everything we do.
Speaker 2:And right there we kind of smoke out whether people know this. Most of them lack confidence to be truthful. And then we watch all their videos as a group, and we laugh at people's stumbles. But an incredible amount of learning happens in this, because that video gets us to our true self, our objective self, rather than the perceived self. And by learning the visit, and what is the value of learning the visit or this customer or client interaction?
Speaker 2:What is the value? It's that we know the business and thus have some authority of which to lead. Okay, that's a healthcare example. But all of your businesses have interactions with clients. All of you are working on quality.
Speaker 2:And you can set up similar things through your testing processes so that you know that people understand the material from an intellectual basis. Basis, but then where they actually practice it through public speaking, through acting it out, through observing their videos. This is a form of accountability. But right there, if people see that the CFO knows the visit structure, the CEO knows the visit structure cold, they're going to be trusted. Thus, the implementation of this emotionally charged comp system is smoothed out to a great extent.
Speaker 2:Let's talk about creating the system. And I usually start out by making a list of the results that I want. Okay. Normally we want growth, sales, admissions. In hospice land, want increased length of stay.
Speaker 2:All businesses, we want to operate without service failures, screw ups, complaints. We want to have high quality awards. We want to have zero defects in our documentation, zero defects in our products and services. We want to have a certain profit standard, 14%, 20%, 25%, whatever number you can do. Again, don't just don't on having it too low or you're gonna have a very difficult time increasing it later.
Speaker 2:Again, on the side of a very high profit standard. We want to have business sectors that don't lose money if we have problem children or there's an inpatient unit or we have the factory or store in this location that is not producing the way it needs to. We want to have all areas and departments operating as an integrated coherent whole where everybody is supporting each other. And we want to have cross training in all key positions so that if we lose somebody, we have redundancy in place and we can keep going even if that person is not there. So in creating the system, make the list of the results.
Speaker 2:Okay, that wires up. Okay, how do we get people to do this? How do we get that performance or results? Start simple. This is the next point.
Speaker 2:Start simple and keep it simple. Humans have a tendency to always try to overthink things, to overcomplicate things. Usually this comes out of lack of self confidence or insecurity. But you make it as simple as possible, where people could look at the system and understand it without having to refer to the fine print. We want to make it as immediate as possible.
Speaker 2:Yes, delayed compensation, just like delayed pain, does not teach very well because we want people to link cause and effect, right? So the frequency of compensation is critical. We preferably do it every single pay cycle. Whereas if it's quarterly or semi annually or annually, you can forget about it. People are going, well, what what did I do to give rise to this result?
Speaker 2:Oh. And deferred pain, that's totally unhealthy. It's the equivalent of putting your hand on a hot stove and going, I'm feeling okay. Oh my god, I've had it on there for a long time. My hand is burnt up.
Speaker 2:You know that pain, that signal that something is not right in the organism is absolutely necessary. So the frequency of your comp system or your payouts, You want it as frequent as possible. And you want it to be, what, immediate. You want to make it where people can look at it and say, I can win in this system. I think that's a key element.
Speaker 2:We want to make it as rich as possible. And then the most difficult thing is, of course, is creating owners in the business rather than renters, because owners just respect and treat every asset of the business differently, right? They don't trash it. They respect it, but this ownership mentality is such a big thing, where that owner sees the big picture as well as the small details. Owners act with authority about the operation of the business because if they see the business going in the wrong direction or an employee going in the wrong direction, they'll usually take some type of corrective action to point it out, to maybe have that one on one with that person with a bad attitude or that's not upholding the standards of culture or performance in the organization.
Speaker 2:That's what an owner does. Owners are relentless as well. They're thinking about the business so much of their time. Owners are normally not clock watchers. You know, they just know they're fixated on getting something done.
Speaker 2:They're going to get the room built out, they're going to get ex produced, and they really are not going to quit until that's done rather than, well it's 05:00, boom, when you might be in a very good work groove at 05:00 where you're really making massive strides forward. That clock just can't come into the equation. It's better to follow the positive flow, the juice of the moment and push through. And that's so much about life, is that life happens. There's just not this on and off switch so much, especially in creative endeavors or any time you're doing real advancement, it's going to happen in unsuspected times.
Speaker 2:And it's just the energy is there to win. And the best thing to do is to go ahead and push through, regardless of the clock. And of course the owner is always thinking about how to increase value of the company. Now let's go over some specific attributes or features in a comp system. And there's a number of them here.
Speaker 2:The first one is I think your compensation system should teach. And we've already alluded to that many times. Again, you want people to look at their paycheck and say, Hey, that worked out or that didn't work out and link cause and effect with what they're receiving. The comp system must be frequent enough to easily link this behavior to results. Three.
Speaker 2:There must be an element of pain in the comp system if performance or behavior is not to standard. Four. The system must be easy to understand. The system must be predictable and not random. People don't like random.
Speaker 2:In fact, random really doesn't exist. People want something they can account of, and that's the system or the methodologies behind it. Six, the system can never be late in paying people. Never be late. And a lot of organizations, the CFOs, the controllers will say, well, we were busy.
Speaker 2:We had a lot going on. There's no excuse. Did you stay late? Did you stay till midnight or one or two in the morning to get those checks done? That's your job because you're gonna demotivate your workforce.
Speaker 2:Seven, the system must be easy to administer. This is where I kinda lean into my programming system analyst background. It's all structural. And how can our machines, our data tracking systems, our EMR in health care, or our different monitoring mechanisms be sensitized to detect nonstandard performance as well as to reward great performance and results. But the system has to be easy to administer because if it's hard to do, it will probably stop over time or you'll end it or you'll tire of it.
Speaker 2:But humans have this tendency to improve things, to overcomplicate. They improve things until they don't work anymore. So it's back to keeping it easy, easy to administer in this case. It has to be a fair system, as I pointed out earlier. We want to create a system of mutual reliance where the actions of operations, obviously that impacts the entire organization, but we equally want the finance department, compliance, HR to be doing their work.
Speaker 2:If they're not, they need to be feeling some pain if this is truly a system or an organism. It's based on the natural processes of life. Point 10: it should protect the company with cross training. We've got to build in these layers of redundancy where if someone's out, someone else can step in and do the job. Point 11, the upside must be compelling in a comp system, right?
Speaker 2:We all want to have more money. We all want to do better. We've got dreams. We've got things we want to fund. So the upside of any successful comp system should be compelling.
Speaker 1:We hope you are having the best day of your life. If you need something further, just visit one of the Multiview Incorporated websites or contact us through social media. Smoke signals, carrier pigeons, telepathy have not proven reliable. All calls are answered within three rings by a competent real person. Thank you for listening.
