Compensation is one of the biggest investments a company will make. Learn how to invest wisely by developing a simple compensation program to support sustainability and growth. Many young companies manage salaries in an intuitive, ad-hoc manner ­ learn about the pitfalls of this approach, and how to avoid them as your company grows. Part of the MaRS Best Practices Series - with speaker LYNN CAMERON & HELEN ROBERT, Managing Partners, TechEdge More, including session video: http://www.marsdd.com/events/details.html?uuid=df2648aa-c50c-4c4b-9a61-66101151c9bd

2. Entrepreneur’s Toolkit:
www.marsdd.com/entrepreneurs-toolkit.html
HR Workbook 1: Building an A-Team
HR Workbook 2: Compensation
HR Workbook 3: HR at Work
Creating an HR plan: Butteriss on human resources
Building HR processes, policies and procedures
Compensating employees
Hiring your friends: Is it such a good idea?
Video: Human Capital: Building high performance teams
Video: Human Resources Management

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Compensation and Your
Battle for Talent

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Assumptions - Technology Industry
• People biggest asset
• People cost $$$
• Top talent in demand
• Change affects whole team
People
Knowledge
& Skills
Success
Products &
Services

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Is Pay Important?

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Absolutely … If you get it wrong!

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Are you sure……
1. ……that your pay decisions are:
 Fair internally?
 Competitive externally?
 Not discriminatory?
2. ….. that you are managing your
compensation investment well?

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Goal for Today
Get prepared to answer
YES!

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“Not Just the Money”
Sick
leave?
Vacation?
Incentives?
Stock
Options?
Sales
commissions?
Mileage?
Pension/
RRSP?
Maternity
leave?
Disability?
Personal
leave?
Relocation?
On-Call?
Overtime?
Referral
Bonus?
Signing
Bonus?
Shift
premiums?
New Grads?
Students?
Work/life balance?
Health/Wellness?

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Salary is the Foundation
 For most candidates and staff:
 Perceived sense of personal value
 Perceived sense of fairness affects trust
 Drives commitment and productivity
 For some people (ie. Sales)
 Drives short-term behaviour
 Drives immediate activities
 Drives or detracts from results
 Drives value of other benefits

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Potential Exposures
 Underpaying:
 Difficult to hire and keep good
people
 Increased costs of turnover and
unhappy staff
 Overpaying:
 Cost/value?
 Can take years to correct
 Budget restricts headcount

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The Ad-hoc Intuitive Approach
 Difficult to recover
 Mismanaged compensation
investment
 Loss of employee trust
Growth
More
Decision
Makers
CHAOSInconsistency
Might work for now….

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Signs You May Have a Problem
 Good people leaving
 Absenteeism
 New people “not working out”
 Good people won’t join
 Missed deadlines
 Lots of knowledge gaps
 Employee problems take up too much of
your time

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Ask Yourself…
 Are you paying enough? Too much?
 Are recruiting and training costs too high?
 Are people leaving or complaining? Do they trust
management pay decisions?
 Can you defend changes to your board of Directors?
 When and how should you use incentive plans?

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Developing a Philosophy
 Focus on overall compensation
package:
 Who do you compete with for skills (not
product)?
 Lead? Match? Lag?
 What’s more important - Internal or external
equity?
 What compensation mix?
 Communicate!

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Philosophy should include…
 Big Picture
 Nondiscriminatory/competitive,
 Consider financial condition,
 Consider supply and demand
 Consider individual performance.
 Specific
 (What)median salaries
 (Where) local marketplace,
 (How) industry surveys and labour statistics.
 Protection
 Company reserves the right…..

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Check out the competition….

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Assessing Competitiveness
 3 key ingredients
 Follow your philosophy
 Benchmark the relevant market
 Differentiate “jobs” and “people”

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Competitive Context
 Big Picture
 Compensation Philosophy
 Business Reputation and Financial
Situation
 Other factors (benefits/perks/flexibility)
 Details
 Define the jobs

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…How do you do this?
Assessing Your Position…

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Assess your Current Position
 Sources of information:
 Reputable, relevant surveys
 Industry articles, websites
 Association networks, social media
 Recruitment experience & feedback
 Attrition rates & feedback
 Employees who express concerns

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Selecting Surveys
 Job matching
 Integrity of data
 Methodology
 Relevance of data
 Affordability

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Benchmarking
 Jobs
 Match your jobs to the market data that fits
your company’s philosophy
 Identify & research trends, variances
 Establish competitive salary ranges based
on all inputs
 Employees
 Review how employees in each job are
currently paid against salary ranges
 Identify exposures

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Make a Plan
 How to determine "the right price" for an
individual
 Range reflects market data for the job and
company strategy
 Positioning employees within the range

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Reviewing Compensation
 Moving target – be pro-active:
 Upon Hire
 At least annually
 Upon Promotion/transfer
 Consider:
 Internal equity
 Competitive position

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Build Consistency into Growth
 Develop a philosophy
 Benchmark objectively
 Create ranges, assess performance
 Use decision-making guidelines
 Review situation regularly
 Rollup reviews
 Peer Reviews
 Management Coaching/training
 Communicate!

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Improvements You’ll See
 Improved performance because….
 Hired the right people at the right price!
 Reduced absenteeism = Increased
productivity Improved retention
 More time for running the business
 Remember…
 Success depends upon overall Employee
Engagement

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Key Take Aways…….
 Compensation is a moving target – know
where you stand
 Take the time to do it right the first time
 Make a plan
 Consider the entire package
 Invest a little to save a lot
 Communicate – transparency creates trust!

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Questions?
Lynn Cameron, Managing Partner
lynn@tech-edge.ca, 613.794.7166
Helen Robert, Managing Partner
Helen@tech-edge.ca, 613.798.3505
Toll Free: 1-877-848-0499