Why is this area of management policy so critical?

Within every business that employs people, there exists a cohort that drives the business. We refer to this cohort as ‘rainmakers. Rainmakers may be designated as salespeople, client advisors, project managers, business unit managers, production managers, trainers, instructors or any one of a plethora of roles. Rainmakers can make or break a business. It follows that remuneration policy in relation to rainmakers is of primary importance. Unfortunately, the corporate World has managed to morph the centralized Top-Down functions of business planning on the one hand, with performance management and remuneration methodology on the other, with scant regard for the effects upon the latter.

That’s a problem because centralized controls produce a slow drift to entropy; the destructive phenomenon of ‘churn’ among the top performing cohort of rainmakers (Pareto’s Law) for example, is a common trap. A second problem in relation to centralized management control mechanisms is that remuneration policy has tended to follow the logic of Top-Down job valuation mechanisms. Job valuation has been sold to business management, ostensibly as a means of objectifying remuneration policy. The unstated rationale has three legs: power, control and keeping pay demands in check. The effect has been to weaken alignment of interest and obfuscate accountability.

The fix for this is relatively simple and likely to deliver a huge performance dividend. However, the cultural impacts will be profound. For this reason, executing a change to remuneration policy may test your leadership. The Performance Management & Incentive Remuneration Audit document will be your first point of reference.