Spotlight on the General Manager Compensation and Evaluation Guides

Spotlight on the General Manager Compensation and Evaluation Guides

  |  February 9, 2022

Molly Snell-Larch

Supervision and evaluation of a general manager (GM) are some of the most important tasks that a food co-op board can have. Adding to those tasks are conversations and questions regarding compensation: What is appropriate? Is the general manager being compensated too much or too little? How do board members with various perspectives come to an agreement on this topic?

Columinate Board Development Consultant Molly Snell-Larch has developed two useful guides for navigating general manager evaluation and compensation processes. Like hiking a mountain, the complex and sometimes thorny tasks of evaluation and compensation are meant to be completed one step at a time to arrive at the desired outcome. Additionally, daunting mountains are always best tackled with a guide.

About the Compensation and Evaluation Guides

The compensation and evaluation guides are tools primarily for boards of directors of grocery retail cooperatives. They offer steps for boards to follow throughout the year to be prepared for these conversations.

“Evaluation of your GM is already happening year-round if you utilize Policy Governance,” Snell-Larch explained.  “Maintain an annual monitoring summary table with all your votes on reports submitted by your GM monthly, in an annual form to review as a board. If there is an issue with your GM, don’t wait until the annual review to raise it!”

Snell-Larch advises that boards discuss things on an ongoing basis.

“Start the processes early enough to hit the steps in the process guides. See this as an opportunity to be [united,] on the same page as a board and as a team with your GM. Neither of these processes need to be a tense time or a battle with your GM. Everyone is on the same team—team co-op.”

Boards comprise individuals with varied life experiences and perspectives on a variety of issues; but money, in particular, can be an especially sticky topic.

The compensation guide advises that board members take time to reflect on biases or historical attitudes around money.  How can past experience influence the lens you might bring to the conversation?

“We all bring baggage around money, good or bad bosses we’ve had, and any number of experiences of evaluation and compensation discussions we’ve had in our own personal lives, to our board service.  The process guides encourage a thoughtful, measured approach to one of the most important jobs of the board —ensuring their GM is being held to a high standard and compensating them fairly.”

Timing is Key

 Another key issue in compensation and evaluation is timing. Make sure the board has set aside enough time for the process to take place without feeling rushed. The guide recommends one to three months for the general manager to develop a compensation proposal, once the board has outlined its criteria.  Planning for key dates, such as a work anniversary, and then working backward can keep the process moving.

Snell-Larch acknowledges there’s often an urge to tie compensation and evaluation conversations together. “We recommend that you actually separate these things as distinct processes.”

“Evaluation is a backward-looking process: How did you do, based on the criteria we set forth over the last year or two? Compensation is future-looking: How can we motivate our GM to do their best work moving forward? Avoid the urge to use compensation discussions as punitive. If you want to change the way you evaluate or on what, you can do that, but do that moving forward, not looking back.”

As a best practice, Snell-Larch recommends that board members who are reviewing a GM should have been serving for the entire period that they are evaluating.

Addressing Equity

Columinate is also addressing issues of implicit bias and equity in these conversations, with two tools: the Gender Equity Project and the Compensation Database. Both involve data around compensation—data that will continue to improve over time as more co-ops provide information about pay and demographics of their GM and other key employees.

The Importance of Trust

By outlining clear and defined criteria for how a board will base its decision-making, these complex topics of compensation and evaluation can start to feel more concrete and fair.

“Trust is an important part of this process. Having everyone get to a place where they agree on the process will save some time on the back end, even if people are balking at the outcome. Take the time to set shared expectations as an entire board.” 

View the GM compensation and evaluation guides. For more information on Molly Snell-Larch, visit her consultant page. NCG member co-ops, small co-ops and non-NCG co-ops, and INFRA member natural independent retailers can sign-up for access to the compensation database here.   

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