What is the difference between a position and a role within an organization? Intuitively, you may have arrived at a correct conclusion. A position is characterized by specific duties you need someone to carry out. A role is defined more by outcomes; it's a stewardship you need someone to assume for certain key results. Positions are filled. Roles are fulfilled.
Premier talent wants to know what role it will play, not what position you're trying to fill.
An organization’s compensation philosophy and associated plans must reinforce the role an individual has within an organization and what’s expected of that person in that role. Ideally, compensation attaches a financial component to the stewardship a company wants its people to assume in fulfilling ownership’s vision of the future company. It should reinforce the role an individual plays in the vision, business plan and strategy of the enterprise.
With that in mind, what I will call "the role principle" requires a company to address four fundamental questions if it wants to attract premier talent:
- What outcomes need to be achieved if the company’s growth goals are going to be fulfilled? A business that can’t define the results it’s looking for is not yet in a position to define clear organizational roles--or to design a compensation strategy that codifies the link between the two. Negative unintended consequences occur when a company isn’t clear about what it wants its people to achieve, and therefore what it is willing to reward.
- What talent is needed to produce those outcomes? This is more than identifying ideal hiring standards for people who are recruited, so great talent is brought into the organization. That’s a given. High performing companies these days are identifying the specific skill sets needed to get the job of growing the business done. They are subsequently inventorying the skills that exist within their current talent pool and identifying gaps. Hence the next question.
- What is the gap between the talent we have and the talent we need? Companies need to develop recruiting strategies based on skill gaps, not position gaps. Excellent companies understand the difference and organize their performance efforts around the unique abilities of their key people. They want those individuals working in their area of greatest potential contribution and ferreting off non-strategic tasks to other people or outside organizations. This is how performance is maximized in a business.
- What value proposition will attract and retain that kind of talent? This question can really only be answered if you have successfully dealt with the other three first. Compensation that is going to solve the right problems without creating new ones needs to attract the right people who will in turn perform the right way. As a result, the value proposition the company offers needs to act as a kind of inbound marketing tool that naturally attracts talent that is compelled by the future of the business and how they will participate in it through the financial partnership being offered.
Roles gain greater clarity when the right financial metrics are introduced. The reverse is also true. If an employee sits in meetings where leadership talks about the growth goals of the company, and how each employee needs to contribute, but then gets paid in a way that has no relationship to those goals, there will always be conflict. This would seem intuitive yet businesses make this mistake all the time.
On the other hand, in organizations that are enjoying consistent, sustained performance, you will always see key roles filled by premier talent. Those same organizations build a compensation structure that reinforces those roles and supports the business model and strategy of the company. There is no conflict between pay, roles, expectations, and results. Instead, you will find continuity.
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