Don’t be afraid of big paycheque (Editor’s notes)

Honesty best policy when it comes to compensating highly valued talent
By Todd Humber
|Canadian HR Reporter|Last Updated: 11/02/2009

When it comes to party conversation, there are three topics that are taboo — religion, politics and money. When it comes to the workplace, the first two should definitely remain taboo. But we shouldn’t be so afraid to talk about money.

The Ontario government looks, at best, awkward and perhaps even a little underhanded because of the way it’s handling pay for some of its top bureaucrats in the health-care sector. (See “Ontario government circumnavigates its own pay rules”)

There’s nothing technically wrong, and certainly nothing illegal, about what the province is doing. But it smells fishy. In a nutshell, the government has guidelines that suggest a cap on pay for these positions. That cap, apparently, is out of whack with market value.

So, in order to attract the talent it needs, the government has to go well above the salary guidelines to compete with the private sector. But instead of simply saying the people they’ve hired are worth it, and they’re paying fair value, the government found a back door.

Case in point: Deputy health minister Ron Sapsford is technically on secondment from Hamilton Health Sciences Centre. It pays him $433,000 a year, plus almost $65,000 in taxable benefits. The province then reimburses the hospital that amount of money.

But why the silly shell game? The province’s guidelines state a deputy health minister should be paid $220,000. But it’s only a guideline. Why not just step up and say Sapsford is worth it and the province is paying market value for his services? Or simply change the guidelines. The province makes the rules, after all. And, in Ontario, any public-sector workers paid more than $100,000 have their names and salaries published — which makes burying their pay in a hospital budget look like there’s smoke where there’s no fire.

The same thinking applies to the private sector. Shareholders are clamouring more than ever for “say on pay” regulations. There is nothing wrong with paying key management figures what they’re worth — and being transparent about why and how.

Some people make more money than others. And some people are compensated very well for a job well done. There’s no need for organizations to fear the big paycheque. Be open and honest about it, and the shareholders (or the voters) will pass their judgment.

Using smoke and mirrors is just going to cause suspicion.

Add Comment

  • *
  • *
  • *
  • *