Going to Pay Your ERG Leads? Awesome! Here Are Some Things to Consider.
We launched a poll on LinkedIn the other day asking people if they thought Employee Resource Group (ERG) leaders should be paid. Stupid question on our part, since 100% of the respondents said "Yes," they should be paid. So let's assume that basically all employees want this, and agree that this should be the norm.
Over 90 percent of the companies that we have seen don't pay their ERG leads, and most have no real plans to do so anytime soon; so this is obviously a place of real disconnect between employers and their employees. Why though?
Two reasons: First, it's new. Second, there's a lot of challenges.
So we put together this simple guide to help you through some of these challenges, with our recommendations.
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THE CHALLENGE: Should we reward people on a performance or participation basis?
HOLISTIC'S RECOMMENDATION: Holistic advises clients to not make things difficult for themselves, and to reward participation as a leader of an ERG, not performance.
If you do decide to make it performance-based, then you need some very very very very very clear metrics about how to determine this. Basically, you want there to be absolutely no doubt about whether someone was successful or not in the role, so you don't have to play "God Mode" or judge another group's efforts.
Participation-based awards are easier. Did you run the group? Did you meet regularly? Did you do a couple of big events? Did you try?
THE CHALLENGE: How often should we deliver the payment?
HOLISTIC'S RECOMMENDATION: We recommend quarterly payments, rather than adding a certain amount to the person's paycheck. Here's why: If you add 5 percent to someone's pay, then that's effectively giving them a raise. And what it serves to do is get them very used to receiving that amount of money in their paycheck. So if/when they leave their leadership of the committee, then they are effectively taking a pay cut, which will backfire tremendously on you.
So, a quarterly payment, almost like a commission, or a bonus, is the way to go.
THE CHALLENGE: Is there a "term limit"?
HOLISTIC'S RECOMMENDATION: Absolutely there should be term limits on leadership of committees, for three reasons. A) It keeps things fresh. B) It ensures that one person doesn't have to shoulder all the burden forever. C) It reduces this feeling of "If I don't do it nobody else will." It also will help ease the pressure on you in terms of the person getting less money when their stewardship stops, because they can prep for it.
THE CHALLENGE: What about equity or professional development or other sorts of "rewards"?
HOLISTIC'S RECOMMENDATION: This is not the place to do that. The rewards/awards should be in the form of money. USD. Anything that's a carrot, like a "hey if you keep doing this we'll give you something down the road," that stuff has a real chance of being off-putting. There's a lot of tension and negative energy around the idea that ERGs are necessary to level a playing field, and so this is not the place where you want to tell someone that they might get some value in the future if they keep it up. This is an immediate reward situation, in the plainest possible fashion.
THE CHALLENGE: Should it be done as a percentage of compensation or as a flat rate?
HOLISTIC'S RECOMMENDATION: Flat rate, please. If you do it as a percentage of comp, then you are, by definition, further cementing any divides in terms of equity of pay within the organization. In other words, if person X makes $100k, and person Y makes $50k, and we assume that is because Person X is at a higher level, has more responsibility, etc., then that's reasonable. But when they are asked to run the ERG, they are asked to do the same things. So why should person X get twice as much? They shouldn't.
THE CHALLENGE: What else should we be thinking about before doing this?
HOLISTIC'S RECOMMENDATION: Two things: Doing it right away, and communicating about it. This is a no-brainer, an idea that doesn't cost a lot of money and can be in place by literally tomorrow. It's necessary, there's universal agreement about it, and it's a great retention tool. So put it in place right now.
And then. Tell people about it! Share the information! Communicate! Let folks know what you decided to do and why. Let the leaders of your ERGs know how much you appreciate them, not just with money in their bank accounts but with words and actions in front of their peers. This is a moment of celebration. Enjoy it.
Good luck! Let us know how it goes! Comment below with any ideas, comments, or implementation suggestions!
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