From the Ask Tom mailbag:

Question:
Can you expand on the "Time Span" "compensation banding" approach? I am not familiar with this concept and do not fully understand what is meant by either term.

Response:
Time Span is a recurring theme in this blog and in our leadership program (Working Leadership Online). Time Span is the cornerstone of the management research conducted by Elliott Jaques from the early 1950's until his death in 2003. This research is documented in 26 books written during his lifetime and remains the most coherent and potent foundation for organizational design on the planet.

If you can see a goal, as a "what, by when," then you can understand Time Span. Time Span is the time element in any goal statement. All behavior is goal-directed behavior, so Time Span touches everything we do. Most importantly, for managers, Time Span helps us understand the complexity of any goal. The longer the Time Span of the goal, the higher its complexity. The shorter the Time Span of the goal, less complexity.

We can also understand the complexity of any role in the organization by examination of their longest Time Span tasks (goals). The Time Span of the longest tasks in a role are a direct indicator of the complexity of the role. By calibrating the Time Span of the tasks in the roles inside your organization, you will be able to accurately identify and rank those roles according to complexity.

Pay banding looks at the those Time Spans and recognizes fair compensation. The longer the Time Span of the tasks (goals) in a role, the higher the compensation. Pay banding is a straightforward correlation of fair compensation for increasingly longer Time Span roles. Once you have determined fair compensation based on Time Span, discussions related to the value of roles can be put to rest and we can get back to work.

An in-depth explanation, along with defined pay bands can be found in Social Power and the CEO, on pages 55-56. If you have more questions, Ask Tom.

From the Ask Tom mailbag:

Question:
I learned today that my salary, as a manager of a department, is less than the people on my department team. My boss told me that adjustments will be made during my review. What is the best way to deal with this without feeling betrayed by my employer? I have been with the company fewer years, but promoted twice and my skills far exceed those on my team.

Response:
Your situation is not unusual. Most companies have only an intuitive idea about appropriate compensation and much less of an idea when asked to explain their compensation structure. Curing a compensation structure that is out of whack is quite difficult.

This is complicated by the fact that compensation gets wrapped up in the self concept of a person's value. Not the case. Compensation must be based on the contribution of the role. The person may have higher capability and the potential to play a higher role, but it is the role that commands the compensation, not the person.

Elliott Jaques was quite specific and clear on the subject of compensation. He offers a simple basis for compensation banding with Time Span as the metric. Compensation, in Jaques model, is directly tied to the effective Time Span responsibilities in the role. And in your case, as a manager, your task assignments (goals) would necessarily have longer Time Spans associated. This would command a higher pay band than those on your team.

Your employer gets the benefit of the doubt on this one, acknowledging that an adjustment is appropriate. And it is likely to take some time to fix this systemic misunderstanding. And an even longer time for your boss to understand why.

From the Ask Tom mailbag:

Question:
As I look at Elliott Jaques model organization, I notice that it is a hierarchy. Over the years, I have heard, or been taught, or read articles about how it is important to flatten out the hierarchy, drive decision-making down to the front lines, closer to the customer. It makes sense to me, but Jaques seems to ignore these new flat organizational models.

Response:
Your observations about Elliott Jaques' high regard for hierarchy is correct. And these new organizational models really aren't new. The flat organization, for all its well intentioned "new-ness" is the way things were before there was hierarchy.

Why has hierarchy gotten such a bad rap? Likely, the adverse experience comes from poorly run organizations who blamed their tribulations on something they didn't understand.

Most people see organizational layers as reporting relationships. Who reports to whom? Who is a direct report? An indirect report? A dotted line report? This view lends itself to command and control and the pushback is predictable in today's business environment.

But Elliott saw things differently. Elliott was a scientist who spent his time observing the way organizations worked, both functional and dysfunctional. He didn't make up a bunch of warm and fuzzy theories, he just observed, in a scientific way. He gathered data, documented his findings and arrived at principles he found helpful.

Elliott observed, in functional organizations, that each layer had a Time Span orientation distinct from the next and that, if you drew a picture of those layers, from the longest Time Span goals at the top to the shortest Time Span goals at the bottom, you ended up with a picture of hierarchy. If his findings had been a circle, he would have reported it to be a circle, but his findings supported hierarchy.

As he examined each layer, he found that they solved problems differently. And the way they solved problems was directly related to the Time Span of the goals each layer was working on.

The value he found, in this hierarchy, was the capability of each successive layer to assist the next layer down with their problem solving. This capability created a value stream for problem solving and decision making throughout the organization.

Where we get screwed up with all this pushback on hierarchy is that we see hierarchy as a reporting structure. The real power of hierarchy comes from its value stream. Here is the way Elliott saw it:

Every employee is entitled to have a competent manager with the Time Span capability to bring VALUE to their problem solving and their decision making.

Thanks to Gil Herman for inviting me to spend the day with his Vistage KEY group in Chicago sharing the research of Elliott Jaques. Here is a question from yesterday's session.

Question:
How do you implement the concepts of Time Span, and the corresponding layers, in an organization where there is very little structure and very few managers. Everyone seems to be doing everything.

Response:
This is a dilemma for most Stratum I and Stratum II organizations. How do you begin to create structure where there is no structure?

This is not a question of implementation. This is a dilemma because it is a decision. Before you can implement, you have to decide, and the decision has to stick, that means commitment.

It's like being in love. When you are young, you think being in love is a feeling. Later in life, you understand that being in love is a decision. Implementing the principles of Time Span is a decision.

And here are the details of that decision. The choice is to continue to live with the chaos that comes from everyone doing everything. And the reward for free-wheeling chaos is more chaos. The organization will remain, stuck, in its own muck.

The other side of the decision is to change. Stop the chaos, organize roles, define methods, create systems. Easy to say, hard to do. But it all starts with a decision.

Some of you may have missed this comment posted last week by Michael Cardus on the five Big Mistakes in hiring.

Comment
One area that is not mentioned is the manager allowing fear and concern for their own position to sneak in. I was talking with a friend of mine who is a program director. She said "I am interviewing people for entry level positions who are more qualified than me."

Listening to her say this, I could hear the concern for her own job. The thought of hiring someone smarter, I may lose my job to the person I hired, or worse, that person, I hired, may get a promotion and become MY BOSS! YIKES.

As the job market is pushing over-qualified people to find work at a rate that they would not have accepted 3 years ago, managers have to work on their self-esteem to learn how to get their egos out of the way.

Response
This is a solid fear that runs through the mind of the manager. It creates a bias in the mind of the manager and there is no escaping it. Working on self-esteem doesn't help and it is impossible to get your ego out of the way. This is self-preservation and skews the hiring decision.

Elliott Jaques observed this in his research with organizations. Those organizations that handled this, created a role for the Manager Once Removed (the Hiring Manager's Manager). He describes this role specifically, as a member of the hiring team, to bring perspective and to qualify the candidate pool. Because of this fear, the Hiring Manager might hire too low in capability. The role of the Manager Once Removed (MOR) is to make sure all considered candidates have the Time Span capability for what is required in the role.

This is the current subject area in our Working Leadership series. We have closed our scholarships, but you can still register for this single session - Time Span and Hiring Talent.