In professional sports, the primary role of the team manager (or coach) is to get the highest level of production out of their team. They provide leadership and they set the tactical team strategy. They do not set or negotiate the salaries of their players; that is left to the role of a GM.
Would this structure lead to higher performing teams within companies?
What if team managers didn’t manage salaries for their direct reports? This HBR article on “How to Discuss Pay with your Employees” states it correctly: “The salary conversation is just awkward for everyone”. As a manager, you have to lead and inspire an individual to achieve peak performance and I believe this can be done much more effectively if you didn’t have direct control of the purse strings.
In the sports world, the manager would talk the player up as much as possible to motivate the individual and can be a total advocate for that player. If the manager is the GM him/herself as well, then there is a conflict of interest.
In most companies, the only way to significantly increase your earnings is to move up the corporate ladder: Individual Contributor >> Team Leader >> Manager >> Director > VP >> CxO. Companies will add prefixes like Sr, Principal, Executive, or other to add more pay levels to the ladder.
Because of this, I believe that “Star” players are rushed up to ladder without sufficient training and experience. Individual contributors can make a significant impact to the company, especially in smaller organizations. Some individual contributors are just exceptionally good at their jobs and it is to the benefit of the company to keep them there. Some people actually prefer this role and would be happy to stay there if the compensation was according with their contribution to the company.
This is a key point: The Manager isn’t automatically the highest paid person on the team roster. This is the GM’s decision.
Also, not all players equate to good managers. It’s a different skill set. In sports, you see it, so often the case, that the star players don’t equate to the best coaches. Often the best coaches are those that were mediocre players, if players at all (they could’ve been analysts). Point is that they understand the game and strategy and they have the management skills to motivate and work with people.
I think structure would also ease the idea of bringing in management from the outside. If folks understand that salaries aren’t necessarily dictated by title, then I think you get people to remain in their best positions for longer periods leading to higher productivity.
In a software development team, a SW Manager could manage X number of developers, engineers, and project managers. The GM is a Director who manages Y number of Managers. The Director’s GM is a VP who manages Z number of Directors.
Further up the chain, the CEO is the manager of the C-level staff, but the Board acts as the GM. Essentially, I think the GM should be the skip level manager or perhaps someone from HR or Finance in a smaller organization.
When it comes to salary negotiation, the GM is setting the team budget and handling all the negotiation with the player. Obviously, the manager’s input is important; however, the manager is removed from the discussion. It’s out of their hands. All the manager focuses on is doing the best with the team they’re provided.
Better managers. Better players. Optimal performance.
But don’t forget about team chemistry. 🙂