Can Compensation Affect Team Building?
Giancarlo Stanton of the Miami Marlins recently signed a 13-year, $325 million contract, to play right field. I stopped being a baseball fan when the players went on strike in 1994 but from what I can remember there are nine players on field at a time. The pitcher and catcher handle the ball the most and the right fielder gets the least amount of action. When compared to basketball, hockey and football, baseball players have the least amount of activity while playing, so I do not understand how the player who has the least amount of impact on a game in a sport with the least amount of effort is paid so well.
This led me to thinking about a bonus system where I had once worked. The process for filling vacant positions was to post the position internally for two weeks before looking outside. The posting provided the salary range and a bonus percentage of the individuals salary. The employee could receive up to that dollar amount each year based on their yearly performance review.
The bonus system was structured so that individuals who had higher paying positions where paid a larger bonus percentage of their salary. So if an employee had a salary of $30,000 they would have a bonus percentage of 10 percent compared to an employee with a salary of $100,000 and a 20 percent bonus percentage. I assume this was devised to attract and keep a higher level of talent, but that is why they are paid a higher salary. All the employees work together to make the company profitable so I think this was an unfair system. Ten percent of $100,000 is larger than ten percent of $30,000 without having to also increase the percentage.
This kind of compensation structure can create an environment of resentment. Most people realize that talent affects how much they will be paid in salary and there is usually more time required with the higher paying positions. When someone takes a position that meets their skill set and desired life/work balance they still contribute to the companies bottom line. Assuming someone with a lower paying position is less likely to make valuable contributions and compensate based on that assumption does not award those who achieve. If they do not perform to required expectations then they should be replaced.
It would seem logical to me the amount of time and effort needed to assimilate a new employee into a company that it would be beneficial for employers to make compensation a priority in retaining all levels of the team. A quarterback's effectiveness goes up when there are good receivers to catch the ball. The boss can have a lot of good ideas but without someone to make them a reality they are just ideas.