CRA Inc

19 Nov 03 @ 12:16 am

Communication And Compensation Planning

Yesterday’s USAToday included an article on compensation strategies for growth companies, and while the thrust of the article was compensation planning, it also argued for the importance of communication in setting employees’ fiscal expectations:

Founders and owners of companies that have passed the threshold into equity-financed revenue growth are likely being held accountable for setting fiscal expectations and producing results on budget. In terms of communicating this process to the workforce, it’s easy to slip into a lazy pattern of sugarcoating the finances when times are bad and overestimating successes when times are good.

The better strategy is to help employees themselves see the big picture—namely, how their jobs fit into the company’s overall objectives, and the necessity of adhering to a budget to get there. Employees won’t grasp the full facts of your company’s financial situation by reading the income statement and balance sheet. Understanding comes only with a significant investment of management time in disclosures that come through company meetings and all employee communications. Those that have been there will tell you that an informed work force will commit more fully to critical company goals than one that is being kept in the dark — especially during the bad times.

We agree; read the rest here.

posted in category(s): Points of Interest