In 1999 eBay’s website went down for 22 hours under the heavy transaction load. This was made worse as that eBay did not have its own in-house team to fix the site. eBay CEO Meg Whitman identified the best person for the job, Maynard Webb, then Gateway’s technical boss. Once she decided that he was the best she agreed to pay him an annual salary of $450,000 plus 500,000 options. Whitman was getting only $195,000 at the time. eBay’s infrastructure now handles many times the number of transactions is did in 1999 and has gone many years without a serious outage.
The Principle of fork it over is simply this:
If You Pay Peanuts, You Only Get Monkeys.
As stated above you should aim to hire the very best people, because average or even good people are not good enough in today’s competitive business environment. The crux of this idea, simply put, is that to attract and to keep the best talent, you must be willing to pay top dollar. Do not scrimp here.
I am not talking about paying the top talent a little more than the average employee. Just as the top athletes are paid many times the average athletes, you must do the same. But remember you are not paying them this money only because you like them; you are paying this kind of money because you are expecting them to create substantial value of the firm. Fortunately, most studies show that top performers do deliver value at a much greater level than others.
However, while financial compensation is important, do not think that it is the only thing that makes your organization attractive for top talent. Typically, financial compensation will just keep you in the ballpark. Generally, it is the other more intangible things in which top talent is interested. For example, higher achiever must be given the opportunity to increase their skills. Therefore, a strong continuing education program is needed. In addition, talented and creative people typically do not respond well to direct supervision, so your organizational systems must be designed to accommodate different means of managerial control. Further, the entire organizational culture must be supportive. Few of these things can be done overnight. As leadership expert and best-selling author Warren Bennis states, “Talented people need appreciation.” It can be as simple as a pat on the back. As a result, the process of making your business attractive to the best employees must start now, because attracting the talented is one thing, keeping them is another.
Our company pays whatever it takes to prevent losing our high performers to other companies.
In that same McKinsey War on Talent survey only 6% strongly agree with this above statement. Ed Michael’s in his book War for Talent, say that, “Top performing companies are two to four times more likely than the rest to pay what it takes to prevent losing top performers.” So if you pay your top talent well, you will be in fine company. How much are you currently paying yours?
While paying whatever it takes is a bit extreme, the idea is still valid. This means two things to the successful organization. First, you should begin to consider seriously looking at the compensation of your high performers, because virtually nobody else is doing it. Remember to have uncommon success you need to act uncommonly. Second, it means that 94% of the businesses out there have talented high performers that are unprotected and ripe for the plucking.