His article about the compensation system at Fog Creek Software is an excellent example.

I have cataloged several other examples in a related post on my blog.

I'll be the first to tell you that there are most definitely companies out there that make compensation mistakes and try to keep them covered up. (This is wrong and I don't condone this behaviour, nor would I continue to work for a company that knowingly violates the law.)

However, what I saw of your business sense on 20/20 this past Friday night, as well as this blog post AND your comments on the above companies *really* frightens me.

You are SOOOOOO undereducated in this arena of HR/business management that I'm confident in asserting that you're dangerous to your readers. You need to disclaim that you have only a surface level understanding of compensation theory and administration instead of pretending to be some incredible thought leader. Nothing that you said above is new or insightful. Compensation professionals talk about and study this stuff all the time.

I've worked with both Salary.com and Payscale.com; neither of them has entirely reliable salary data -basically, their data is NOT TRANSPARENT. (Isn't this one of your primary arguments above?) Of course, you'd have to have some actual expertise in this arena to understand this and it's clear you do not.

One of the primary rules of compensation analysis and management is to use data that you can readily understand (not unlike prudently investing in companies with business models that you can understand). Another one is to never rely on only one data source.

I, and other professionals in this field, regular mock these two data providers because so much of what they publish is inaccurate. Sure, they get some common benchmark jobs right, like accountant and software developer, but they get much more of it wrong. In one way I appreciate that the existence of Salary.com and Payscale.com because they get people excited about a topic I love so much. On the flip side, I get to spend a lot of time counseling employees on why the data they bring to me is skewed. –Examples of skewed data include:

- employees improperly matching themselves to survey jobs they found on the interet,
-ignorance about their own development needs to progress to the next professional level,
-a lack of understanding between cost of living and cost of labor,
-incorrect algorithms used used by these internet sites for determining "geographic differentials",
- litte to no knowledge of their company's chosen compensation strategy [i.e. lead, lag or lead/lag]

There are so many variables to consider when developing a compensation program that it's easy to see why a small business, such as yours, can make mistakes.

What's amusing is that in the 20/20 story it's noted that you have 8 employees and the spread is $50K to $125k. Unfortunately, 20/20 failed to provide information on what jobs were represented. (The devil is always in the details.) But aside from this, you have no one to blame for this pay fiasco but yourself. …And your solution by posting everyone's salaries on the white board was nothing more than an ignorant, attention seeking stunt for the cameras. Using peer pressure to solve your compensation problem speaks little to your ability to manage effectively or fairly. Did you learn nothing from your adventures in the corporate world? Have you never had any professional training on this stuff? Shame on you! Stop writing so much and and start listening/learning. In other words, "Seek to understand before being understood".

Should you actually want to learn information on compensation program development & administration then please check out some respected professional organizations: -Society for Human Resource Management (www.shrm.org) or WorldatWork (www.worldatwork.org). The membership base of these organizations is made up of professionals and academic folks who spend the majority of their time researching these issues and working in the real world.