VeraSage

Compensation in the Professional Knowledge Firm

Ed Kless - 02/07/2008

David Maister recently posted about Compensation Systems and it got me to thinking. (Oh no.) What should a compensation system look like in a professional knowledge firm (PKF).

Since I believe as Jason Jennings believes that compensation is an imponderable of life. With the caveat that I reserve the right to change my mind in five minutes on this, I humbly submit the following - compensation systems in PKFs should have these elements:

1. A base salary in line with the experience and perceived value of the person.
2. A quarterly or trimester variable amount based on the acquistion and/or demostratation of increased knowledge. For example, the passing of a certification test.
3. A quarter or trimester amount based on the achievement of profitability of the entire firm.
4. A descretionary bonus of varing amounts for work performed above and beyond. (We at VeraSage would call this a TIP clause, if it were paid by a customer.)

Notice I do not propose amounts or percentage mix for any of these. They are just the elements I would have in a plan.

What are your thoughts?