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# Show me the Money compensation strategy for managers

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All managers must decide how much to invest in each individual in their team. This decks proposes one strategy, given finite resources.

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• Agree. Thanks Christian!

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• Simple and direct. I think in variable compensation is where you have more posibilities to assign different amounts according perfomance.

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### Show me the Money compensation strategy for managers

1. 1. COMPENSATION STRATEGIES FOR PEOPLE MANAGERS SHOW ME THE MONEY
2. 2. all managers must decide how much to invest in each individual on their team
3. 3. you can invest a fixed amount of money and/or time MONEY TIME Compensation, promotion, benefits, etc… Coaching, mentorship, training, etc…
4. 4. so, as a practical example, if you have 10 members on your team, \$100,000 in comp, and 30 hours per week to support them, how will you invest?
5. 5. how much of your time & money do you invest in your top talent?
7. 7. what about everyone else?
8. 8. what is fair? what is right?
9. 9. what gets you and the firm the highest return on those investments?
10. 10. remember
11. 11. it is a fixed pie that you have to work with, so you need to make hard choices
12. 12. start by dividing your workforce into 4 categories
13. 13. CATEGORY OF WORKER STARS POTENTIALS WORK HORSES UNDER ACHIEVERS
14. 14. and, since people fall roughly into standard deviations
15. 15. it’s a good bet that your team will distribute roughly as follows
16. 16. CATEGORY OF WORKER % OF YOUR TEAM IN THIS CATEGORY OUTPUT AS A GROUP STARS 10% 40% POTENTIALS 30% 30% WORK HORSES 50% 20% UNDER ACHIEVERS 10% 10% in your team of 10, you’ll have 1 star, 3 potentials, 5 work horses and 1 under achiever the star and potentials will add a vastly disproportionate value to your goals
17. 17. here is my recommended investment strategy
18. 18. CATEGORY OF WORKER % OF YOUR TEAM IN THIS CATEGORY YOUR BUDGET YOUR TIME STARS 10% 50% 10% POTENTIALS 30% 30% 50% WORK HORSES 50% 20% 20% UNDER ACHIEVERS 10% 0% 20%
19. 19. why this distribution?
20. 20. RULE ONE comp your stars extremely well so that they stay, and then get out of the way so that they can achieve these guys don’t need much time. they are well trained already. all they need are goals and air cover
21. 21. RULE TWO Potentials have the highest return on time comp them above market, but invest a much greater relative percentage of your time so that they become stars
22. 22. RULE THREE Comp your Work Horses fairly and spend some time helping them understand & achieve their goals But signal that while it is OK to, "just get the job done," if they stretch themselves towards the Potential category, you'll respond with greater investments
23. 23. RULE FOUR Do not comp your under achievers Instead, spend a disproportionate amount of time to help them retrain and/or move out of the function where they are under performing and into another function where they can become a star