1.
TOP 10 COMPENSATION
MISTAKES MADE BY
SMALL BUSINESSES
Lena Bottos CCP, GRP – Kenexa
Catherine Dovey CCP, SPHR – Compensation Works
To us, business is personal

2.
ABOUT US
Lena Bottos CCP, GRP
Catherine Dovey CCP, SPHR
Vice President , Compensation
Principal, Compensation Works
Kenexa
Copyright Kenexa®, 2011 2
Copyright Kenexa®, 2012 2

3.
WHY THIS IS
SO
IMPORTANT
Other
costs
Labor
Costs
Copyright Kenexa®, 2011
2012 3

4.
HOW SOME
COMP PLANS
WORK…
Copyright Kenexa®, 2011
2012 4

5.
Poll Question:
What is your company size?
•<50 Employees
•50-100
•100-200
•200-500
•500+

6.
MISTAKE #10
Shh! Telling
managers and
employees not to
talk about pay.
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Copyright Kenexa®, 2012 6

7.
TIP #10
Work on what you can control –
your communication about how
pay decisions are made.
Copyright Kenexa®, 2011
2012 7

8.
PAY
TRANSPARENCY
CONTINUUM
Complete Transparency Complete Transparency
(Public Sector) (Closely held)
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2012 8

9.
What
How
Why
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2012 9

10.
MISTAKE #9
Adjusting pay
structures without
looking at pay levels
for each job.
Copyright Kenexa®, 2011 10
Copyright Kenexa®, 2012 10

11.
TIP #9
Pay attention to the market
movement of individual jobs
Copyright Kenexa®, 2011
2012 11

12.
IT’S MORE THAN
JUST THE
AVERAGES
Making assumptions based on 3% averages
can cause you to miss the market for specific
jobs.
Job Change
Head of Anesthesiology 24%
Banking Operations Manager 22%
Materials Control Manager 14%
Private Label Manager -9%
Health and Safety Manager -10%
Program Manager -13%
Copyright Kenexa®, 2011
2012 12

13.
MISTAKE #8
Living by exception.
Creating and
enabling internal
inequity.
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Copyright Kenexa®, 2012 13

14.
TIP #8
Fix the problem, don’t just move
it around.
Copyright Kenexa®, 2011
2012 14

15.
MISTAKE #7
Going it alone.
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Copyright Kenexa®, 2012 15

16.
TIP #7
Learning how to do it right will
help you expand your skills.
Copyright Kenexa®, 2011
2012 16

17.
Poll Question:
I am confident I know all the
technology and software
available to me to help me do
my job best.
•True
•False

18.
MISTAKE #6
Not using the proper
tools and assuming
you are paying at
market.
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Copyright Kenexa®, 2012 18

19.
TIP #6
Ask for a price appropriate for
your company size.
Copyright Kenexa®, 2011
2012 19

20.
MISTAKE #5
Being cheap –
saving money on
survey data.
Copyright Kenexa®, 2011 20
Copyright Kenexa®, 2012 20

21.
RELATIVE
SURVEY
COSTS
Example:
for every $10,000,000 in salary
you spent $10,000 survey costs
= .1% of salary costs
Copyright Kenexa®, 2011
2012 21

22.
What companies use free or very
inexpensive survey data?
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2012 22

23.
TIP #5
Saving dollars on compensation
data or design is an expensive
way to save money.
Copyright Kenexa®, 2011
2012 23

24.
MISTAKE #4
Diva syndrome.
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Copyright Kenexa®, 2012 24

25.
TIP #4
Focus on what your people do,
not what your product or
service is.
Copyright Kenexa®, 2011
2012 25

26.
MISTAKE #3
Thinking small – not
understanding the
competition.
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Copyright Kenexa®, 2012 26

27.
TIP #3
Know your relevant recruiting
market.
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2012 27

28.
MISTAKE #2
Assuming a 3%
merit budget is too
small to use for
differentiating pay.
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Copyright Kenexa®, 2012 28

29.
VARIABLE
TIMING
INCREASES
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2012 29

30.
TIP #2
Focus on the behaviors you
want to reward and think
outside the box.
Copyright Kenexa®, 2011
2012 30

31.
Poll Question:
We have a training program to
train existing and future
managers on the necessary
skills to be good managers.
•True
•True, but not enough
•False

32.
MISTAKE #1
Communication.
Communication.
Communication.
Not teaching
managers and
employees how the
system works.
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Copyright Kenexa®, 2012 32

33.
TIP #1
All your work hinges on
managers being able to
communicate the message.
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2012 33

34.
DON’T BUILD
THIS COMP
PLAN!
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2012 35