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A recent INC. article, titled "Why Google Quietly Uses the Power-Law Rule to Pay Its Superstar Employees 'Unfairly,'" details a troubling trend affecting businesses of all shapes and sizes: Many leaders are undervaluing their best people and are unaware of it.
While the concept of “equal and fair” has good intentions when it comes to rewarding employees, it can have equally bad results. Many (if not most) companies determine compensation and rewards based on job titles as much as performance. That’s a mistake. Every organization has top performers, and those top performers must be identified and rewarded accordingly. Forget about job titles. Figure out what your top performers mean to your bottom line, your culture and any other important measure you use for your company. If you have a senior manager who’s doing a pretty good job, and a lower-level employee who is doing a great job that is essential to your business’ success, which one deserves the bigger compensation?
This isn’t not the way business leaders normally think about compensation — and that’s the problem.
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