Past Insights

I’ve received an overwhelming amount of deeply thoughtful feedback about my post on transparency, which recounted a public session on compensation with employees at Seventh Generation. Most of the feedback was sent to me privately and did not appear on my blog. I want to thank everyone who took the time to share their perspectives with me. The comments I received were both thought-provoking and insightful.

First I’ll share some of the common themes, both positive and negative, and a few of the recommendations I received. Then I’ll share some of my own thoughts about potential next steps.

Positive comments:

• “I must say that I am incredibly pleased to work here. There are SO many reasons to feel proud of this company.”

• “The fact that I can express my opinion and not be reprimanded speaks volumes for the leadership here.”

• “I want to thank you for putting this out there and having open honest conversations about these difficult topics.”

• “Since I started here, I’m making more money than I was making at my old company. Add in the non-traditional benefits that we offer, and it’s a fantastic package that I believe cannot be found elsewhere.”

Critical comments:

• “It’s really the bonus percentages that rub me the wrong way. To think that someone will get a bonus of what I get paid for an entire year is hard to accept. A 35% bonus for some is more than others earn in their base pay for the entire year.”

• “I chose to come here for the mission of the company, but it meant making less money than I did before.”

• “While I am amazed at getting a bonus to begin with, I wish it wasn’t touted as being equitable.”

• “Future (equity) value means little when I struggle to keep my old car running.”

• “I don’t feel as if there is any intention of making any changes.”

• “I expect more from the management team at Seventh Generation than a carefully calculated PowerPoint that aims to demonstrate how much more progressive we are than the majority of other companies in existence.”

• “I’m not really all that interested in how Seventh Gen compares to 90 out of 100 companies if those companies aren’t institutions we’d proudly model ourselves after.”

• “Things tend to not appear equitable when you’re looking at them from the bottom up.”

Some Recommendations I Received:

• “Help me understand how we compare to the other “responsible” companies.”

• “Could you involve a wider range of people, with more diverse perspectives in the development of the compensation structure?”

• “My solution would be a 20% bonus for everyone across the board.”

Here are my thoughts and reflections: The question of equitable compensation and transparency continues to be every bit as challenging as I had expected. The first two recommendations above are great suggestions, and we will explore ways to implement them.

The last is a bit problematic. If everyone received a base bonus of 20%, individual contributors could receive bonuses that are approximately 25% to 50% more than they are at any other benchmarked company (or any socially responsible company we know about) while Directors and Vice-Presidents would receive bonuses that are approximately 90% less than those at all benchmarked companies. I believe that would place at risk Seventh Generation’s ability to retain some of its best talent, a result that I don’t find acceptable.

One solution may lie in complementing our current system with a much more creative option such as the one used by Linden Labs, which is described in detail in The Responsibility Revolution, a book I wrote with Bill Breen:

Each quarter, every associate is given an equal share of a portion of Linden’s net profit — most recently, about one thousand dollars per person. The money comes with one stipulation: you cannot keep it for yourself. You must click on the Rewarder, and use it to redistribute your share to those whom you believe did the most to help the company over the past three months. You can send the total to one over-achiever, or divide it among several. It’s your call.

It seems that what lies at the heart of much of the discontent is our failure as both a society and a company that lives within that society to agree on what a reasonable and equitable distribution of wealth means. Since we all enter into this discussion with our own perspective and beliefs, it’s no surprise that when we look at the situation, we all come to different conclusions about the many questions this conversation is actually asking us to answer:

• How much wealth is enough, how much is too much?

• Should we distribute wealth at levels that may contribute to unsustainable overconsumption?

• Because different levels of income support different lifestyles, does a company have any business casting an opinion about what an appropriate lifestyle should be?

• How should the value created by a business be divided up between employees and shareholders? What constitutes a reasonable return for a shareholder?

• What is the appropriate way to value individual experience, unique contributions to the business that generate measurable additional value, and/or the stresses created by constant travel and long hours?

• What are the benefits and risks to the business that might result from more significantly deviating from the traditions and patterns followed by other business when it comes to compensation?

These are just of a few questions that we should be asking and need to try and answer. Those answers will most likely come from dialogue and discussion, not me sitting alone at my computer. So I will commit to help resource and direct this dialogue with others at Seventh Generation and report on our progress here at the Inspired Protagonist.