Strategic Method Redefines GM Compensation

 

One of the most satisfying things most of us can experience is being fairly compensated for a job well done. It makes us feel like our work is valued and that someone has rewarded our achievements and accomplishments on behalf of the workplace. Yet negotiating compensation with the general manager (GM) can be a potentially fraught process if directors are unprepared.

Historically, boards have not had a systematic approach to doing this important job, causing some directors to be unaware of what goes into a successful compensation negotiation. Hurt feelings or conflict have been the result.

In order to carry out this important task in a positive, strategic and future-affirming fashion, many boards have adopted a step-by-step course of action that refines the process for both the board and GM. This compensation activity includes a GM request for proposal (RFP) timeline, questions that need to be answered regarding the strategic importance of GM compensation, and how to judge a compensation proposal. Cooperatives that have adopted this approach have found that it has helped clarify board values and given general managers a way for their work to be appraised on behalf of the co-op.

Sacie Lambertson is chair of the board for Community Mercantile in Lawrence, Kansas. When they hired their new manager two years ago, the board decided to move into the RFP process for GM compensation. She was motivated to try it because she felt that previous GM’s had not been that well paid, and that the board needed a process for changing that dynamic. Lambertson noted that the first year they implemented the RFP process they didn’t follow CDS Consulting Co-op’s suggestions to the letter. Now they do, in part because it just took some time to institutionalize the new compensation process.

Lambertson said they spent more time learning and researching than they ever had before, but that it’s been worth it because it’s helped take the discomfort out of the process. “This takes a lot of thought and board consideration. Part of the process is to get the board on board with the idea of what a general manager with their level of responsibility can command salary-wise in the marketplace,” she said. “The reality is that our GMs are not paid as much as their non-co-op counterparts.” She noted that some people in the food co-op sector have a “vague volunteerism attitude about co-ops, that people should work for the love of it. If you are doing a good job, you should be paid for it.”

Larrane Hartridge, a general manager at New Leaf Market in Tallahasee, Fla. noted that when her board adopted the RFP process it helped them understand how her work could be better valued and understood at the co-op. She has worked at New Leaf for fourteen years, steadily growing the store year after year into a multi-million dollar business. Hartridge also feels like the board’s process has positively changed her relationship with them, by clarifying what they want from her role and how it interfaces with the co-op’s overall goals. “The board has to look at more layers of accomplishment, through their policies and the store’s sales goal. Now I feel well paid to go forward and reach the co-op’s future goals. It’s been a real incentive,” she said.

Video: Setting a Process for GM Compensation

Cooperative Grocer article: Setting a Process for GM Compensation

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By |April 2nd, 2011|Categories: Connections|Tags: , , |

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