Structuring Pay for a Team LO15419

John Constantine (
Sat, 18 Oct 1997 04:01:08 -0600

Replying to LO15407 --


There is no substitute for quality; of a product, a process, a procedure,
a set of shared values. Whether it is in a "team-based" compensation
system or for an individual, the success of the overall organization is
the success of the members. Where it seems to break down is in the
well-ingrained feeling in American management that people need to be
controlled in order to maximize profit potential.

Thus, the system yields to the accounting which, instead of being a
reporting mechanism, more often than not tends to be the controlling
force, the major factor which drives the rest forward. This is surely not
the best way to "run an airline", but it is the norm.

A great deal has been written attacking and defending goal-setting and
management by results/objectives, but all seem to ignore a fundamental
concept - corporations are by definition inanimate entities. They are not
designed to be concerned with those "inside" or their desires. They are
designed for a purpose which has little to do with the niceties of team
effort and so forth; they exist to minimize the tax impact on

It is a rare and wondrous thing to have an individual make the kind of
community impact which you refer to as an extended team, the kind of
example set by Malden Mills. For those who do not know, there was a great
fire which destroyed an entire operation, putting several thousand people
out of work. The owner, a senior citizen himself, took it as his
responsibility to ensure that families did not go hungry, and to ensure
that a new mill would be built. This he did, to his everlasting credit.

This points out the possibilities which can exist, wherein the team (mill,
community, workforce) benefits by the clear vision of its leader. In this
context, the focus is not on compensation but rather on holism, on the
benefit accruing to the entire community as a result of not being
restricted to the accounting as being the raison d'etre. Resources have to
be wisely used, and wisely distributed, but it is not often wisdom which
gets much play in modern business, IMO.

Can we get to the point wherein the goal is increasing knowledge and
longevity to the benefit of all, including the inanimate corporation and
its shareholders? Then perhaps one can structure pay based on the value
inherent in a long-term employee who knows a lot, and is worth a lot more
than what he knows. Success is never a given, but I would bet that the
workers in Malden Mills feel a unique blessing has come their way and they
would be happier than most to be working at all.

If efficient systems are less costly, and more productive, it stands to
reason that the goal should be to make cooperation one of the major foci,
as opposed to competition, especially when it comes to compensation for
individuals within a team, or for multiple teams within the organization.
As such, I would not want to make accounting the prerequisite for doing,
or learning, or cooperating within the organization. It takes a good
person to do what was done at Malden Mills, a person who is equally
committed to making the business successful as he is to to those who can
do so. That kind of thinking is what can sway shareholders in this
"quarterly return" economy, and I would love to see more of it. My thanks
to Dennis for asking some very interesting questions.

Dennis Keibler wrote:

> I would like to touch two threads: "Team Building" with "GRADING SYSTEMS
> in LEARNING ORGS" if possible.
> or more specifically,
> How to structure the pay scale of a team?

[...big snip by your host...]


John Constantine Rainbird Management Consulting PO Box 23554 Santa Fe, NM 87502-3554 Rainbird@Trail.Com http:\\\~rainbird

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