One of the more challenging components around migrating to a fully purpose driven organization is the compensation of the people involved. In other words, how to make sure that the compensation structure does not create non-aligned incentives whilst still honoring each others contribution.

In a traditional environment behavior and decision are incentivised by compensation based on positions (in combination with a variable target driven component) without any direct connection to the servicing of the purpose. Meaning both could diverge overtime.

The alternative is to compensate behavior and decisions based on their relative contribution to the purpose at any one moment. This means that the person as such is no longer at the core of the compensation structure but the combination of roles one actually fulfills. And how well one has fulfilled these roles from a purpose perspective.

Good news is that getting to a common view of the relative contribution to the purpose of people working together (up to a group size of approximately 20) is really simple: everybody ‘knows’ exactly what the actual contribution of all of the group members (incl. ones own) is.

This doesn’t means it is easy. Why? Because we are not skilled in sharing what we sense our relative contribution has been. And not skilled in subsequently openly discussing the outcome within the group. If the purpose is clear to all and the proces is facilitated properly a fulfilling consensus will emerge soon.

Not only will the outcome result in a fairer distribution of resources available for compensation but also reward behavior and decisions that actually bring the reason for working together forward: an effective realization of the common purpose.

The simple grid below is all that is needed to support this exercise:

The sensing of the relative contribution can if desired be informed by having it preceded by storytelling sessions around all that has happened in the previous period (and maybe in rolling overview of the roles and projects involved).

Please do not hesitate to comment on the above. It is still in development and as said before one of the most challenging part of moving to a new purpose driven way of working together. For more information please contact Red Turtle or Breathe.