Now that Spring is here it’s a great time to review your comp plan. Whether you are updating an existing plan or have something more informal in place, this will be an excellent webinar to attend.
We’ll walk you through some basics such as evaluating your compensation philosophy and strategy, keeping up on critical jobs in the market, and ensuring basic compliance.
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Agenda
How is spring cleaning a comp thing?
Compensation plan review
Deep cleaning your comp plan
Cycling through smaller reviews
Where do you start?
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Compensation Philosophy
Answers the big “why” question
Should change infrequently
Review annually
Our compensation program is designed to retain, attract, and motivate
talented employees who drive the company’s success and uphold the
company values. In recognition of the necessity for top-tier talent, we
strive to provide base salary that exceeds the market…
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Compensation Strategy
Operationalizes the “why” with “how”
Review annually
Quarterly for critical jobs
Talent Market(s)
Industry, Size,
Location
Level of competitiveness
How
aggressively to
pay
What to reward
Performance,
Experience, etc
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Compensation Policies
Help ensure the plan is carried out
Review annually
As needed for key laws passed
Hiring rate: discretion is given to managers to hire from 0-33%
range penetration; up to 50% requires HR approval, beyond that
requires executive approval.
Promotions: increases, in the case of promotion, should be at least
to the bottom of the new range, at least 7% and not to exceed 15%.
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Compensation Processes
Provide the literal steps to follow
Review annually
Process for adding or evaluating a job:
1. Manager proves organizational need for the job or job change
2. Manager develops job description, with appropriate compensable factors
3. HR obtains market pricing and slots into structure
4. HR provides manager with appropriate pay range and hiring range
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What does comp deep cleaning
involve?
• Refresh market data
• Evaluate overall structure
• Evaluate individual jobs
• Review for internal alignment
• Decide which adjustments to accept
• Communicate
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Decide which plan edits to
accept
Determine cost to adjust
For example: if we adjust our
ranges up 2%, how does that
impact our green outliers?
Consider:
• Top performers
• Hot jobs
• Compression
• Green outliers
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Communicate
Update and Inform Executives
• market change and cost to stay competitive
• recommended course of action
Train Managers
• company philosophy & strategy
• current market position and comp plan adjustments
• communication best practices
Adjust Employees
• managers share market and performance adjustments
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Monthly reviews
Market study hot jobs
Market study for company segment A
Plan review for company segment B
Adjustments for company segment C
Policy review
Process review
January
Februar
y
March
April
May
June
July
August
Septem
ber
October
Novemb
er
Decemb
er
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Identify Hot Jobs…
Decide what’s hot from your business goals
Let the market decide
Goal:
Develop 2 market leading
products in the next 12
months
Hot jobs:
Product Managers,
Product Marketers,
Software Developers
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… and decide what to do
• Market bonus
• Project incentive
• Base pay raise
• Do something creative
• Do nothing
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Where do you start?
• Map out competing organizational priorities on a calendar
• Calendar out comp activities, counting back from budget
deadlines
• Identify jobs needed to accomplish business goals; evaluate
market pricing vs pay practices
• Evaluate all elements of your plan: Philosophy, strategy,
structure, policies, processes
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PayScale leads the world in compensation knowledge with the freshest and
most detailed data from over 54 million salary profiles. More than 3500
organizations use PayScale’s software and intelligence to get the greatest
return on their talent. Smart businesses use PayScale Insight to recruit, retain
and motivate their people.
Visit our blog: www.payscale.com/compensation-today
Join our Group on LinkedIn: Compensation Today: HR Best Practices
Mykkah Herner, MA, CCP
Modern Compensation Evangelist
Ryan Fowler
Compensation Professional
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