In this free webinar, we’ll tell you how to set an appropriate compensation calendar, so when it's time for fall budgeting, your organization is prepared to make smart compensation decisions.
Register for this presentation and prepare to set an effective 2012 compensation calendar that aligns you for success.
You'll learn how to:
•Design a compensation calendar that achieves your organization’s goals.
•Develop a project plan to meet the timelines established by the organization.
•Get buy-in for the process from senior management.
Don’t wait until the last minute and then scramble to add value to the process – set an agenda to address compensation in a timely, thoughtful way, starting today.
1. Spring Ahead:
Plan your Approach
to Compensation in
2012
Stacey Carroll, M.B.A, SPHR, CCP
Director of Professional Services & Education
PayScale, Inc.
2. PayScale Delivers Where Other Compensation
Providers Fall Short
PayScale operates the largest online salary database in the
world. We allow organizations to price their jobs according to
13,000 Positions. their industry, location, and the employee skillsets which make
50 Major Industries. their workforce unique. PayScale goes beyond supplying the
11 Countries. accurate data you need - we also give you the tools to efficiently
manage your compensation projects, and the knowledge to stay
up-to-date.
Visit our blog: http://blogs.payscale.com/compensation/
3. Agenda
Start at the end
What will the increase be based on?
Planning for Market Adjustments
Sample Range Recommendations
Sample Merit Matrix
What do you want to change?
General Timeframes
4. Start At The End
The MOST important event on your compensation
calendar is about giving out salary increases to
employees. So, this is the end of your process but
the beginning of your planning.
Align timing with your company philosophy?
Annual review process for all employees
Choose a date that aligns with your company’s budgeting process
Anniversary review process
Choose a focal point for making decisions about your guidelines and
compensation matrix
Decide if you will stay status quo or make changes to your
process.
5. What are the increases based on?
HOW will you determine how much of an increase
the employee with receive?
Aligning increase amounts with your company
philosophy
Will all employees be eligible for a cost of living increase?
If you have salary ranges, will you adjust the ranges?
Will you differentiate the increase amount based on merit vs.
market?
Will these two pieces be aligned into the same process or different?
Do you give rewards based on longevity with the company or in the
position?
6. What Do You Want to Change
About Your Current Process?
Giving out across the board increase (cost of living)
Basing rewards on performance vs. longevity
Differentiating between market adjustments and
movement within the range
Moving ranges every year
7. Planning For Market Adjustments
Benchmark your entire organization – define your baseline
Define your compensation philosophy and goals for 2012
Determine what changes (if any) you want to make to your
current process
Provide budget recommendations based on company goals
8. Sample Recommendations for Range Adjustments
Summary of Midpoints to Market
2012
2011 Midpoint
Employee Midpoint to compared to
Structure Base to Mid Market Market Difference
Denver A -0.26% -5.50% -7.96% -2.46%
Miami A -1.97% -4.36% -8.53% -4.17%
Philadelphia B -4.09% -4.85% -5.96% -1.11%
Baltimore B -6.24% -8.87% -18.77% -9.90%
Costa Mesa C -11.94% -4.31% 3.02% 7.33%
Remote A 14.53% -3.96% -0.12% 3.84%
Remote B -7.89% -5.63% -5.36% 0.27%
Remote C -10.09% -6.49% 13.28% 19.77%
Exec Exec 0.00% 1.94% 1.94%
Reccomendations:
Move A & B structures up by 2%
Keep Structure C the same
Move Baltimore to B
Move Programming Team Lead to 7
Keep Developer II at 6 - but market adjustments may be warranted
Move Sr. Developer to 7
Move Network Engineer to 4
Director Product Management to a grade 10
Job Descriptions Needed:
Customer Advocate Manager
Programming Services Support
10. General Timeframes
Start from the effective date of salary increases
Input payroll changes: 2-4 weeks
HR/Company approval: 1-2 weeks
Managers allocating salary increases: 1-2 weeks
Managers conducting performance reviews: 2-4 weeks
HR preparing instructions, guidelines and
recommendations for increases based on budget: 1-2 weeks
HR getting budget support for organizational goals: 2-4
weeks
HR benchmarking the organization: 4-8 weeks
11. Sample Organization
My company wants to benchmark the organization this year (it’s been 2
years since it was last done). We’ve been losing too many of our top
performers, so the Executive team wants to look at rewarding
performance this year. Our budgets remain tight due to market
conditions, and the executive team wants to know how to invest wisely
without “breaking the bank”.
Changes we’ll make to our compensation program for 2012.
Continue to use annual review process for allocating increases to employees
at the same time, but break out market adjustments from performance
increases
Benchmark the organization
Get buy-in on company’s compensation philosophy
Provide a compensation matrix that allows managers to reward based on
performance – with consideration for employee’s placement against the
market (compa-ratio)
Create a policy for red-circling employees over the top of the max
12. Sample Timeline
Market adjustments will be Merit increases will be effective
effective 10/1/2012 1/1/2013
1. Invest in tools/data: 4/1 1. Manager performance review
2. Benchmarking complete: 5/15 training: 9/15-10/1
3. Decision from leadership team 2. Performance Reviews: 10/1-11/1
about compensation philosophy: 3. Merit budget approved: 11/1
6/1 4. HR sends guidelines, employee
4. HR Analysis on proposed data and communication to
increases: 7/1 managers: 11/15
5. Leadership sign-off: 8/1 5. Manager’s allocate salary
6. Notification to Managers: 8/10 increases: 11/30
7. Exceptions Finalized: 8/25 6. HR final review: 12/5
8. Communication to employees: 7. Employees are notified: 12/10
9/1 8. Data finalized for input: 12/15
9. HR final approval date: 9/15
10. HR’s recommendations to finance
for merit increase budget: 10/15
13. PayScale Delivers Where Other Compensation Providers Fall Short
PayScale operates the largest online salary database in the world. We allow organizations to price their jobs according to
their industry, location, and the employee skill sets which make their workforce unique. PayScale goes beyond supplying
the accurate data you need - we also give you the tools to efficiently manage your compensation projects, and the
knowledge to stay up-to-date.
Visit our blog: http://blogs.payscale.com/compensation/
Join our Group on LinkedIN: Compensation Today: HR Best Practices
Stacey Carroll, M.B.A, SPHR, CCP
Director of Professional Services & Education
PayScale, Inc.
Connect with me on LinkedIN: http://www.linkedin.com/in/hrstacey