Incentive Compensation: Are You Worried that You Will be Blamed For Deflating the Footballs?
January 29, 2015
With the Super Bowl just a few short days away, the Deflate Gate investigation is certainly getting even more media attention. Bill Nye The Science Guy even conducted an experiment to determine if the New England Patriots in fact deflated their footballs to gain a competitive edge during the game or if the deflation was weather related. However, new reports have surfaced and now NFL officials are looking at and questioning the Patriots looker room attendant. With these new allegations, could this actually be related to incentives or are we looking at a failed process?
This situation can be related back to the 2008 bailout, especially if incentives are the main contributor. In 2008 when the Emergency Economic Stabilization Act was passed, the federal government required companies to have complete transparency and visibility to help prevent executives to be incentivized to take “unnecessary and excessive risks”. In the case of football, this correlates to participating in activities that promote or can actively be viewed as cheating – high risk, high reward (until you get caught). However, the desire to participate in unlawful activities has to start somewhere, and is that starting point the people, processes, or product?
People trust that others are doing their job in the way that is just, that they are looking out for the best interest of both the company and themselves, and that correct process(es) are being followed. What happens when something breaks? Who is at fault - the person, the processes, or the product and/or system? No matter the industry, companies must have proper governance and rules in place to ensure that nothing “slips through the cracks”. This is why check and balances are there in the first place. It is imperative that there is complete transparency, visibility, as well as risk mitigation actions so that situations like these do not happen. The new allegations against the locker room attendant report that he had approximately 90 seconds to deflate the footballs before he had to take them to the field. Was there no processes in place that had someone else weigh the footballs before and after they get onto the field? Was there no one around to ask the question, “What are you doing with those?” before he took them into the room? For people that are in compensation roles, is your compensation process done in an outdated process and system that only increases the risk of not paying employees correctly? This then brings up the question, what really needs to change so that mistakes are avoided, the rules or the processes?
There comes a point when companies are running on a hamster wheel, trying to calculate compensation in a way that is not only ineffective, they are also losing employee engagement/morale because compensation plans are poorly planned. How can you avoid being blamed for “deflating the footballs” during the “big game”?
- Understand your business challenge(s): Where is the disconnect stemming from?
- Determine what needs to be changed: Do we need a new system that will enable us to manage both compensation and performance in an effective way? Do we need to add more steps to our processes? Or do we need to find new people that are more aligned with our overall corporate goals and objectives?
- Find a company that will help you achieve your definition of success, no matter what might need to be changed organizationally, so you don’t have to worry about deflated “footballs”.
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