IBM Smarter Workforce Summit Toronto 2015: IBM and PCL Construction, co present: Creating Compensation Ambassadors: Engaging Managers To Willingly and Effectively Talk About Pay

1. Creating Compensation
Ambassadors:
Engaging Managers To Willingly
and Effectively Talk About Pay
Louise Karp
PCL
Mark A. Szypko, CCP, GRP
IBM

2. © 2013 IBM Corporation
IBM Smarter Workforce
“If it were up to me…”
“My hands are tied!”
“HR made me do it!”

3. © 2013 IBM Corporation
IBM Smarter Workforce
Copyright Kenexa®, 2012 3
REALITY PERCEPTION
friends & family
coworkers
articles/publications
the internet
corporate culture
• Aligned to the
market
(median)
• Equitable
across
similarly
situated
employees
• Compliant
with relevant
statutes
• I’m not paid
enough for the
work I do
• I don’t know
why they pay
me what they
do
• My co-
workers who
do the same
thing make
more than I do

4. © 2014 IBM Corporation4
Perceptions of Pay fairness over time
51%
55% 55% 54% 54% 55%
49%
57%
59% 58%
53%
50%
60%
20%
30%
40%
50%
60%
70%
2001 2002 2003 2004 2005 2006* 2007 2008 2009 2010 2011 2012 2013
%ofEmployeeswhoBelieve
PayisFair
Notes: WorkTrendsTM .
* Data were not collected in 2006, so mean across all years was used.

5. © 2014 IBM Corporation5
Impact of managers communication skills on employees perception
of pay fairness
Source: WorkTrendsTM 2013/2014 Canadian data
SA
A
N
D
SD

6. © 2014 IBM Corporation6
Managers who feel comfortable having salary discussions

7. © 2014 IBM Corporation7
Managers Belief In Organizations Compensation Philosophy
Source: WorkTrendsTM 2013/2014 Canadian data

8. © 2014 IBM Corporation8
Managers Belief In Organizations Compensation Philosophy
Source: WorkTrendsTM 2013/2014 Canadian data
81% of Managers Feel Well Prepared with 2 or more.
SA
A
N
D
SD

9. © 2014 IBM Corporation9
Employees: More Communication = Better (to a point)
25%
50%
75%
100%
0 1 2 3 4
Understand how pay is determined Know how to maximize pay
Number of communication methods used

10. © 2013 IBM Corporation
IBM Smarter Workforce
“It is up to me…”
“My hands are NOT tied!”
“HR helped me do it!”

11. 11

12. Number of Employees
More than 4,400 full-time professional and administrative salaried staff and more than
10,000 hourly tradespeople
Markets
Buildings, heavy industrial, and civil infrastructure
Annual Construction Volume
Over $7.5 billion
​North American Headquarters
​Edmonton, Alberta, Canada
US Head Office
Denver, Colorado
Geographic Area
The United States, Canada, the Caribbean, and Australia
Portfolio
PCL is involved with more than 700 projects at any one time. These range in value from
$20,000 to more than $1 billion and include office towers, residential condominiums,
retail outlets, hotels and resorts, educational and health care facilities, casinos, sport
and entertainment complexes, bridges, airports, high-tech facilities, water treatment
facilities, petrochemical/power/oil and gas plants, and major plant maintenance
shutdowns.
Ownership
100% employee-owned
PCL is a group of independent
construction companies that
carries out work across
Canada, the United States, the
Caribbean, and in Australia.
These diverse operations in the
civil infrastructure, heavy
industrial, and buildings
markets are supported by a
strategic presence in 31 major
centers.
12

13. PROJECTS that Inspire
13
Canadian Museum
for Human Rights
Glacier Skywalk
Syncrude Plant

14. Employee Ownership
Why be just an employee when you can be an owner?
Benefits for Employees
• 100% of the shares of PCL are
held by its employees
• In addition to receiving
competitive wages, employee
shareholders share the profits
that they help PCL to generate
Benefits for Clients
• Extraordinary performance by
employee shareholders,
motivated by a higher return
on labour and investment,
delivers outstanding value for
clients
14

15. PCL’s Compensation Philosophy
Target Pay Competitively
• Comprehensive and
competitive compensation
package in each region in
which we operate
• Regularly evaluate market
competitiveness against our
industry peer group
Pay for Performance
• Individual contribution and
performance are factors
considered when making
compensation
recommendations
• Recognizing and rewarding
performance is critical to
reinforce positive performance
15

16. Managers Equipped:
Managing your projects… managing your people
• Supervisor toolbox
– Accountability, administration, effective delegation, employee
development, employee engagement, team building
• Supervisor development
– Supervisor fundamentals, formal training for supervisor,
coaching, mentoring, individual learning
• HR as a resource
– Provide communication tools, coaching and feedback
16

17. Managers Enlisted:
Key players in structure development and implementation
Confirm job
information and
evaluate jobs
Create job grades
based on job value
Determine and
validate market
benchmarks
Marry market pay to
job value
Undertake pay
analysis
Determine pay
policy line
Determine salary
ranges
Determine
adjustment costs
and policies
Implementation and
regular review for
competitiveness
17

18. Managers Educated:
Base Salary Progression Over Time
18
S a l a r y R a n g e
MidpointMinimum Maximum
Entry Zone
CR <90%
Target Zone
CR 90 - 110%
Max Zone
CR >110%
Employees who:
• are new to the role or in the
early stages of their career,
or
• exhibit lower levels of
proficiency, or
• demonstrate tolerable levels
of performance
Employees who:
• are seasoned in their career
and are top performers, or
• exhibit mastery, or
• demonstrate considerable
capabilities and are expected
to grow further
Employees who:
• are proficient in their role
and still growing in their
career, or
• exhibit competent
proficiency, or
• demonstrate ability to take
on larger/stretch role

19. 19
Little to No Increase
Lower Performer
Paid Higher
Average to Above
Average Increase
Higher Performer
Paid Higher
Nominal Increase
Lower Performer
Paid Lower
Significant Increase
Higher Performer
Paid Lower
Low
Performance
High
Performance
Higher Pay
Lower Pay

20. Bonus Award and Share Ownership:
Tied to Performance
Performance Bonus Award
• Individual, organizational
and business unit
performance are all factors
in determining annual
bonus awards
• Additional recognition for
Star employees
Share Ownership
• Employees who have
demonstrated commitment to
the company and have
significant career potential
within PCL are considered
candidates for share
ownership
• Additional recognition for Star
employees
20

21. Managers Empowered:
Arming managers to be compensation ambassadors
• Enabling managers to
“comfortably” have meaningful
conversations regarding
compensation with their
employees
• Reinforce and drive high
performance
• Which leads to reduced HR-
related costs
my CAREER.
my COMPANY.
my LEGACY.
21

22. Questions?