Having just returned from an inspiring tour of wineries in Sonoma, I’m going to put the usual “sheet” aside for now and reflect on how designing a great compensation plan is like making a great wine.
Robert Mondavi once said, “Making good wine is a skill; making fine wine is an art.” The same can be said about compensation plans – the truly great ones are like works of art.
So let’s see how the two share similar characteristics.
In general, the best wines come from the best quality grapes. Soil, grapes and climate all play a role in determining the production of a great wine, and the French call this unique set of circumstances “terroir.”
Similarly, to design a great compensation plan, you must begin by capturing the cultural “terroir” of your organization; what your company stands for, your mission and the definition of excellent performance to unearth the basic design elements of your compensation program.
Even when starting with the very best grapes, if there are faults in the production process it can lead to a wine that is undrinkable.
Like a great wine, if there are flaws in the design process of your compensation plan, it can render the program to be ineffective and even worse, demotivating. Much like trying to change the nature and essence of the grapes in the wine, over manipulation or forcing an outcome will not benefit your organization or its employees.
A good wine should display not only the signature characteristics of its variety but also a complex personality of its own. Getting the right balance of flavor between all of its components produces a whole that is greater than the sum of its parts.
If you’re merely using design factors from other firms or standard industry compensation packages, your program may just not reflect your company’s core values. Complex elements need to be custom tailored and specifically blended to reinforce your unique offerings.
This is much harder to define. Endless nurturing, attention, love, time, and philosophical focus all need to come together to produce a valuable, great tasting wine (and no, it does not need to be expensive to provide a wonderful tasting experience).
Like wine, valuable compensation plans are more art than science. They incorporate multiple aspects and objectives, blending them just right and mixing in a dose of creativity to achieve success. And, like the great winemakers of today, we need to incorporate established methods as well as new customizable technologies to facilitate the management of these programs.
Finally, as Robert Mondavi said, “Whatever you do, pour yourself into it.”
Like Mondavi, let’s pour ourselves into designing great compensation plans!