Who are the most valued employees in your organization? You can know the answer in less than an hour with this simple exercise:
- Make a list of current employees who worked for your organization five years ago.
- Divide each employee’s wage or salary (or total cash compensation) today by their wage or salary (or total cash compensation) five years ago.
- Sort this list from high to low (based on the percentage growth in pay from five years ago to today).
- The top 10 names on this list are your organization’s most valued employees.
This exercise is a simple but powerful and irrefutable test of whether your organization “walks the walk” of your stated compensation philosophy. David Van De Voort, National Practice Leader – Pay & Performance
If you want to know what an organization values, follow the money. Your most valued employees are the employees whose compensation increased the most over five years as a percentage of where it started.
Some important questions
- Do the people at the top of this list KNOW they are your organizations’ most valued employees? Shouldn’t they know?
- Does your CEO know these names? Shouldn’t your CEO know the names of your organizations’ most valued employees?
- Any surprises? Any mysteries?
- Now look at the bottom 10 names on the list. Why are these people still employed by your organization?
Each of these names likely has a fascinating story that explains their growth in pay. These stories in aggregate hold a mirror up to your pay practices. This exercise is a simple but powerful and irrefutable test of whether your organization “walks the walk” of your stated compensation philosophy. If you find the results of this exercise valuable, you might want to consider running it periodically by SBU, location, or department. If you find the results of this exercise embarrassing, or worrying, I’d like to hear from you!
Finally, if your reaction to this exercise was, “We don’t have the data in our HRIS to do this,” then you have an HRIS problem; especially if you recently spent 16 gazillion dollars to implement a global ERP. (But that is a story for another day and another post.)