All managers must decide how much to invest in each individual in their team. This decks proposes one strategy, given finite resources.

1. COMPENSATION
STRATEGIES FOR
PEOPLE MANAGERS
SHOW
ME THE
MONEY

2. all managers must decide
how much to invest in each
individual on their team

3. you can invest a fixed amount of
money and/or time
MONEY TIME
Compensation,
promotion, benefits,
etc…
Coaching, mentorship,
training, etc…

4. so, as a practical example, if you
have 10 members on your team,
$100,000 in comp, and 30 hours
per week to support them, how
will you invest?

5. how much of your time & money
do you invest in your top talent?

6. what about your weaker
members?

7. what about everyone else?

8. what is fair? what is right?

9. what gets you and the firm the
highest return on those
investments?

10. remember

11. it is a fixed pie that you have to
work with, so you need to make
hard choices

12. start by dividing your workforce
into 4 categories

13. CATEGORY OF WORKER
STARS
POTENTIALS
WORK HORSES
UNDER ACHIEVERS

14. and, since people fall roughly
into standard deviations

15. it’s a good bet that your team will
distribute roughly as follows

16. CATEGORY OF
WORKER
% OF YOUR TEAM IN THIS
CATEGORY
OUTPUT AS A GROUP
STARS 10% 40%
POTENTIALS 30% 30%
WORK HORSES 50% 20%
UNDER ACHIEVERS 10% 10%
in your team of 10, you’ll have 1 star, 3
potentials, 5 work horses and 1 under
achiever
the star and potentials will add a vastly
disproportionate value to your goals

17. here is my recommended
investment strategy

18. CATEGORY OF
WORKER
% OF YOUR TEAM
IN THIS CATEGORY
YOUR
BUDGET
YOUR
TIME
STARS 10% 50% 10%
POTENTIALS 30% 30% 50%
WORK HORSES 50% 20% 20%
UNDER ACHIEVERS 10% 0% 20%

19. why this distribution?

20. RULE ONE
comp your stars extremely well so
that they stay, and then get out of the
way so that they can achieve
these guys don’t need much time.
they are well trained already. all they
need are goals and air cover

21. RULE TWO
Potentials have the highest return
on time
comp them above market, but
invest a much greater relative
percentage of your time so that
they become stars

22. RULE THREE
Comp your Work Horses fairly and
spend some time helping them
understand & achieve their goals
But signal that while it is OK to, "just
get the job done," if they stretch
themselves towards the Potential
category, you'll respond with greater
investments

23. RULE FOUR
Do not comp your under achievers
Instead, spend a disproportionate
amount of time to help them retrain
and/or move out of the function
where they are under performing and
into another function where they can
become a star

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Please note that all content & opinions
expressed in this deck are my own and
don’t necessarily represent the position of
my current, or any previous, employers

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