Reward Strategies for Dot.Corp Organizations: Lessons from the Front

Abstract

Nearly every major corporation today seems preoccupied with developing new-economy businesses and processes that will create sustainable competitive advantage, but many of their dot.corp organizations are struggling to succeed. Too often, they have overpromised substantial additional value to the parent and underdelivered on the commitment. Many of them have received special treatment from the parent, which has angered the mainstream organization. The weakness to date has rarely been due to failures of business strategy or technology. Many dot.corp organizations struggle because their people strategies attract the wrong people, motivate the wrong behaviors and focus to a fault on minimizing collateral damage back at the mainstream organization. A one-size-fits-all approach does not work when it comes to dot.corp reward strategy. The two key steps are to categorize the dot.corp’s organizational structure and then to identify the parent’s planned exit strategy for the entity. Once human resources has answered these two questions, it can develop a powerful new reward strategy that maximizes the dot.corp’s chances of success. Successful programs acknowledge that the dot.corp labor market is somewhat different from the dot.com labor market especially at the executive level. They also need to avoid becoming overly focused on minimizing collateral damage in the mainstream organization. For a dot.corp organization to attract outstanding talent and fulfill its mission of transforming the parent, it must break new ground in its reward strategy notwithstanding the reactions back at the mother ship.