Outliers - Its Not All Good!

There has been a lot of talk in the past year about outliers. In large part this is due to the fabulous book Outlier by Malcolm Gladwell in which he explores what is behind those few people that seem to excel beyond all others. He highlighted success stories like Bill Gates and the Beatles to show that 10,000 hours of hard work and practice will result in expertise.

Sometimes success does not pay. Many corporate environments promote a “pay for performance” workplace. My experience indicates that this simply means a cost of living increase is provided to anyone that can meet some minimum requirement as defined by the corporate cultures version of an annual or quarterly review. This percentage is then tweaked and adjusted slightly up for those that have excelled in performance or politics. For those out of favor or performing badly, they are given what is left.

Exceed the corporate expectation and you will receive a higher rating, along with the rating you have the opportunity for a higher merit increase. Remain dedicated to your company and brand, continue to excel and exceed, recognized with year after year of positive performance evaluations and one day you might be rewarded with outlier status.

If you are a corporate employee you might be especially susceptible to this condition. The text books say that an outlier is an employee with income that is extraordinarily higher or lower than expected.

Odds are you will not wake up one day making significantly less, so if you are notified as being an outlier, you are making too much. At least, you are making too much according to their definition of what “much” is. It appears that there is more than one model used for calculating outliers. One model looks for standard deviations between actual and expected pay, another model uses a regression analysis, and some companies establish a set range and strictly compare the actual to expected salary for a particular role.

In at least 4 major corporations that I am aware of, they use an outside human resource and payroll consulting firms to calculate the pay ranges and outlier limits. Based on your job descriptions, these outfits categorize each job in your company roughly as compared to similar jobs in other industries.

$What Does It Mean To Me$

This all depends on your company. The use of outlier calculations to limit excessive incomes is not a law, it is your companies choice. For example, I found this document from the University of Sussex detailing how outliers would be addressed. Effectively a “one-off” or lump sum payments in excess of the salary limitation. In this case, it appears the outlier status was triggered by changes in grade levels.

In other companies the rules may vary from limits on annual merit increases, to static bonus payments to nothing.

$What Can Be Done About It?$

Again, your company has established the rules that guide your payroll. Your first choice is to accept that you are a highly compensated employee, appreciate that you have a job and move on. On the other hand, depending on the political climate of your organization you could also fight it.

To avoid the outlier status there are only a few realistic choices including an exception from management, re-classification of your role, and re-evaluating the comparison group.

In the end, your company management made the rules, and if they so desire they could bend, adapt or change them. Based on your outstanding service, exceptional level of education or long years of service they could provide special consideration.

Your future may be determined by a poorly written document. Your role was classified based on a number of criteria but mostly your job description. Ensure that it accurately represents what you do.

Lastly, the comparison group should be closely reviewed. In the hundreds of job roles to be categorized it is conceivable that in some cases an accurate comparison is not being made.

Readers: Every work in corporate American and been faced with outlier status? Is it truly a career limiter or did you overcome it?

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photo by explorativeapproach

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