Getting Smart About Compensation Best Practices
•
4 likes•2,429 views
This document discusses compensation best practices for 2017. It addresses topics such as developing a compensation strategy, building market-based pay structures, gaining executive support for compensation plans, training managers, and implementing a total rewards plan. The document provides questions to consider and advice from experts on creating compensation plans that attract, retain, and motivate top talent.
Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Getting Smart About Compensation Best Practices
Similar to Getting Smart About Compensation Best Practices (20)
More from PayScale, Inc.
More from PayScale, Inc. (20)
Recently uploaded
Recently uploaded (16)
Getting Smart About Compensation Best Practices
- 1. bamboohr.com payscale.com 2017 Compensation Best Practices Getting Smart About Compensation and how to know if you’re doing it right!
- 2. bamboohr.com payscale.com 2017 Compensation Best Practices Rusty Lindquist Vice President, Thought Leadership BambooHR Camie Bailey Senior Customer Education Specialist Payscale
- 3. bamboohr.com payscale.com 2017 Compensation Best Practices Innovation: The keystone of differentiation
- 4. bamboohr.com payscale.com 2017 Compensation Best Practices Competitive Abundance GLOBALIZATION has shrunk the world TECHNOLOGY has leveled the playing field LOW ENTRY BARRIER has increased startups
- 5. bamboohr.com payscale.com 2017 Compensation Best Practices Differentiation decay
- 7. bamboohr.com payscale.com 2017 Compensation Best Practices Focus on Who You Are PEOPLE Relentlessly attracting, inspiring, and empowering great people. CULTURE Creating a great place to work, so great work can take place. @Rusty Lindquist
- 9. bamboohr.com payscale.com 2017 Compensation Best Practices
- 10. bamboohr.com payscale.com 2017 Compensation Best Practices Culture is story Everything you do becomes part of that story… The story of what you value
- 11. bamboohr.com payscale.com 2017 Compensation Best Practices Compensation is the story The story of how much you are valued.
- 13. bamboohr.com payscale.com 2017 Compensation Best Practices Questions to ask: • What is your market? • What are your goals? • How competitive do you need to be? • What should you reward? • Is your current strategy working?
- 14. bamboohr.com payscale.com 2017 Compensation Best Practices What is the right compensation mix for your company?
- 15. bamboohr.com payscale.com 2017 Compensation Best Practices —Harvard Business Review “Keep the plan simple. It should be extraordinarily clear which outcomes you are rewarding.”
- 17. bamboohr.com payscale.com 2017 Compensation Best Practices Payroll is, by far, a company’s biggest expense; the cost of getting it wrong is tremendous.
- 18. bamboohr.com payscale.com 2017 Compensation Best Practices Pay is the number 3 reason people quit jobs [BambooHR study]. If employees aren’t being paid what they’re worth, they will find it somewhere else. Executives must care about compensation if they care about retention.
- 19. bamboohr.com payscale.com 2017 Compensation Best Practices Top Compensation Mistakes • Not updating compensation regularly • Not empowering managers to fix problems • Not being transparent • Giving across-the-board raises • Not having a structured plan
- 20. bamboohr.com payscale.com 2017 Compensation Best Practices Compensation plans help the bottom line. 1. They make good business sense. 2. They help attract and retain talent. 3. They support your company’s mission, strategy and culture.
- 21. – Ram Charan Best-selling Author, Business Advisor
- 22. bamboohr.com payscale.com 2017 Compensation Best Practices “If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them.” —Jack Welch
- 23. BUILDING A MARKET- BASED PAY STRUCTURE
- 24. bamboohr.com payscale.com 2017 Compensation Best Practices Decide on the correct job evaluation method. Market Pricing v. Point Factoring
- 25. bamboohr.com payscale.com 2017 Compensation Best Practices Choose The Right Data Source
- 27. bamboohr.com payscale.com 2017 Compensation Best Practices of organizations feel very confident in their managers’ ability to have tough conversations about pay 19%
- 28. bamboohr.com payscale.com 2017 Compensation Best Practices Comp is about an Exchange of Value Not just Money Experience in industry Experience in market vertical Experience in adjacent markets Experience in field of discipline Experience in adjacent disciplines Experience with competitors Product knowledge Competitor knowledge Time and experience in company Education Discipline training and certification Supply and demand Employer Value DriversEmployee Value Drivers Base pay Performance Pay Paid time off Benefits Travel Culture and environment Work flexibility Work/Life balance Meaningful work Who you work with Challenging work Opportunity to impact Job security Shared purpose / mission Career advancement opportunities Autonomy Senior leadership
- 29. bamboohr.com payscale.com 2017 Compensation Best Practices Communication Roles Executives: Communicate program to organization at a high level Managers: Communicate compensation details to employees Employees: Bring questions to manager or HR HR: Prepare communication, consult and inform Executives, train Managers
- 30. bamboohr.com payscale.com 2017 Compensation Best Practices Making the Compensation Conversation a Culture Builder Don’t be offended Be open Take it seriously Be objective Be proactive Be Positive
- 32. bamboohr.com payscale.com 2017 Compensation Best Practices Identify Market Differentials Schedules preserve both competitive pay to local markets and internal equity. Baltimore +5% Dallas Main Minneapolis +5%
- 33. bamboohr.com payscale.com 2017 Compensation Best Practices Determine Your Pay Grades The number of pay grades you use will influence your midpoint differential and should sufficiently distinguish difficulty levels of different jobs.
- 34. bamboohr.com payscale.com 2017 Compensation Best Practices Some considerations include • How wide should my ranges be? • How much overlap between pay ranges is good? Build Pay Ranges
- 35. bamboohr.com payscale.com 2017 Compensation Best Practices Evaluating employee placement in range. Developing guidelines or policies for movement. Using Pay Ranges
- 36. bamboohr.com payscale.com 2017 Compensation Best Practices Use market data Verify internal alignment Assign Jobs to Grades
- 37. Basic Function & Key Differentiators • Administrative Accounting Functions to support AP & AR • Update General Ledger • AP / Vendor Relations • AR • Maintain General Ledger • Prepare financial reports • Interpret financial reports and statements for management • Analyze financial data • Prepare budgets Degree & Certification Requirements None Bachelor’s Degree No certification required Bachelor’s Degree CPA required at proficiency Bachelor’s Degree CPA required at start Critical Skills at proficiency • Attention to Detail • Excel • Data Entry • Quickbooks • Attention to Detail • Quickbooks • GAAP • General Ledger • Monthly Reconciliation • Financial Reporting • GAAP • Financial Reporting • Financial Analysis • Budgeting Years of Experience • 1-2 at proficiency • 3-5 at proficiency • 5-7 at proficiency • 8-10 at proficiency Accounting Assistant Senior Accountant Accountant I Accountant II Grade C Grade E Grade 5 Grade 7 Build Career Path
- 38. USE DATA
- 39. Employee Report
- 41. IMPLEMENT A TOTAL REWARDS PLAN
- 42. bamboohr.com payscale.com 2017 Compensation Best Practices Compensation Plan Element • Philosophy • Strategy • Ranges • Policies • Processes
- 43. bamboohr.com payscale.com 2017 Compensation Best Practices Budgeting for Increases
- 44. bamboohr.com payscale.com 2017 Compensation Best Practices Deal with Outliers
- 45. bamboohr.com payscale.com 2017 Compensation Best Practices
- 46. bamboohr.com payscale.com 2017 Compensation Best Practices Feeling appreciated, valued, and adequate rewarded for your effort. Value Total rewards Va Value Rewards Recognition Compensation What you get from work
- 47. bamboohr.com payscale.com 2017 Compensation Best Practices Do You Ask Them About Pay?
- 48. bamboohr.com payscale.com 2017 Compensation Best Practices Thank you! BambooHR Receive a free job posting on our ATS and full HRIS for one week. We will contact everyone within the next few days to set this up. Download our free eBook: Communicating Compensation: Your guide to tackling tough conversations about pay PayScale
- 49. bamboohr.com payscale.com 2017 Compensation Best Practices Questions? Rusty Lindquist Vice President, Thought Leadership BambooHR @rustylindquist Camie Bailey Senior Customer Education Specialist Payscale
Editor's Notes
- PAYSCALE
- Bamboo
- Bamboo
- Bamboo
- Bamboo
- Bamboo
- Bamboo
- Bamboo
- Bamboo
- Bamboo
- PAYSCALE
- PAYSCALE
- PAYSCALE
- PAYSCALE
- BAMBOO
- BAMBOO
- BAMBOO
- BAMBOO
- BAMBOO
- BAMBOO
- BAMBOO
- PAYSCALE
- PAYSCALE
- PAYSCALE
- BAMBOO
- Rusty So why is it important to train your managers to talk about comp….read stat Real concern that managers don’t know how to manage. Manager have a lot going along and talking about comp isn’t their primary job so we need to make it easier to do that. Often promoted because their great at their function, not at being a manager. HR and Leaders can’t be having the conversation every time. Not sustainable and not the best, they have the best knowledge of their employees and these conversations are an opportunity that they need to have.
- BAMBOO Help them understand the spectrum, and build the ability to identify what matters most to the employee. Every comp conversation is an opportunity to talk about everything else. But they have to be looking at the whole spectru. Often when they say “I want more money” actually what they mean is “I don’t feel valued”, and it very well could be the path to fixing that is not about money (in fact, it often has the shortest-term impact on feeling valued). Sometimes they just don’t have the language, don’t understand the equation, and so the only thing they think to talk about is pay. But it might not be as much about pay as you would think. It might. But it might not.
- Rusty Everyone has a role, but the timing is different. HR’s role is to get the program ready, continue communicating updates to the Executive team, and to train the management team (which is what we’re doing today). Executives, are responsible for approving the compensation plan, communicating it at a high level to the company, and they are also managers in their own right so they perform a dual role there. Prepare talking points for executives, covering: Compensation philosophy & purpose Compensation plan changes at the highest level Next steps – talk with managers Managers’ role is to understand the program, communicate the information to your employees, and seek support from HR when needed. Employees’ role is to agree to the program and if they don’t, they need to communicate that to you as managers and again, you can seek out support from HR if needed. Managers *CAN* talk comp, when given the tools, resources, and training to do so. With that in place managers can act both as agents of the organization and advocates for employees. “Go ask HR” or “HR won’t let me” undermines their own authority. HR is here to support, not hinder. Prepare tool kit for managers, including: Compensation plan talking points Compensation plan information Details for each employee they supervise Tips for each type of conversation they may have
- Bamboo
- PAYSCALE
- PAYSCALE
- PAYSCALE
- PAYSCALE
- PAYSCALE
- PAYSCALE
- PAYSCALE
- BAMBOO
- BAMBOO Have data driven conversations so both your Ees and mgrs. Have confidence in why they’re paid what they’re paid. Here’s a place to put your Comp Philosophy so every employee sees it. Pg. 3… Here’s where you are relative to your range and what does it mean to have a range penetration of 40% and why does that make sense. Here’s your wage trends, so how your pay has changed over time and how it might continue to change over time. Pg. 4… If you share market data with them, your argument is even stronger. If you do share the 10th-90th percentile, be prepared to explain why everyone is not going to be paid at the 90th and why you EE are not paid at 90th (could be a good place to tie to performance and next steps). Also a good place to point out pay trends (trending down)
- BAMBOO Left page. Gives context on how they’re doing within their organization. You should only be sharing this if you’re doing it right! If you’re going to be this transparent to the org, don’t shy away from people who are paid low. Right page. Have some talking points prepared for your managers. Things like “why am I being paid more/less than typical Ees in the same role”; “How competitive is my pay relative to the market” “How do I earn more and grow with the company?” Middle…talk through Total Comp. Here’s the potential things you’d want to cover. Most Ees find out how much their medical benefits cost when they get their COBRA statement. That’s the wrong time. Why bother to have awesome benefits if you’re not going to tell people how much their valued.
- PAYSCALE
- PAYSCALE
- PAYSCALE
- PAYSCALE
- Rusty
- Rusty
- Rusty 50% of orgs agree that comp drives engagement, but only about a quarter of them (26%) have changed pay as a result of ee engagement survey feedback 11% of companies don’t ask about pay on engagement surveys – we wonder: how do you know how they feel about pay if you don’t ask?