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Compensation PowerPoint PPT Presentation

Benchmark jobs. 50-60% of jobs should be benchmarked. 70-80 ... Perceived value of jobs in relationship to each other. Determines jobs to be group together ...

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Compensation

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Compensation l.jpg

Compensation

Deborah Marsh

November 2006


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Total Rewards

  • Total Rewards definition

  • Why Total Rewards?

  • Elements of Total Rewards

    • Compensation

    • Benefits

    • Work Environment

  • Total Rewards Strategy


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FLSA

  • Law impacting compensation more than any other law

  • Enacted in the 30’s

  • Major components

    • Child labor restrictions

    • Minimum wage

    • Overtime provisions


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Elements of Compensation

  • Fixed pay

  • Variable Pay


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Determining Base Pay

  • Build Job Worth Hierarchy

    • Job analysis

    • Job documentation

    • Job evaluation

    • Job worth hierarchy

    • Base pay structure


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Determining Base Pay

  • Job analysis

    • Document work methods and processes

    • Training

    • Performance Appraisal

    • Qualifications

    • Legal compliance


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Determining Base Pay

  • Job documentation

    • Job analysis questionnaires

    • Job families (leveling)

    • Job descriptions

      • Nature of work

      • Level of work

      • Job specifications (what is required for competent performance)


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Determining Base Pay

  • Job Evaluation

    • Ranking

    • Classification

    • Point factor

    • Market pricing


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Determining Base Pay

  • Market Pricing

    • Most common

    • Collect market data

      • Going rate

      • Pay trends

      • Competitive pay practices

    • Benchmark jobs

      • 50-60% of jobs should be benchmarked

      • 70-80% similar content for match


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Determining Base Pay

  • Job Worth Hierarchy

    • Based on job evaluation method

    • Perceived value of jobs in relationship to each other

    • Determines jobs to be group together

    • Determines internal equity


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Example Job Worth Hierarchy

PositionMarket

Director of HR$100,000

Accountant$ 85,000

Marketing Analyst$ 75,000

Payroll Clerk$ 40,000

Receptionist$ 25,000


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Base Pay Structure

  • Includes policies

    • Tied to philosophy

    • Hire rates, promotion, demotion

  • Pay range

    • Minimum, midpoint, maximum

    • Often multiple


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Example Base Pay Structure

GradeMinMidMax

10$4863.678.2

9$41.754.366.8

8$37.147.357.5

.

.

4$27.832.737.5


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Types of Base Pay

  • Salary

    • Weekly

    • Monthly

    • Biweekly

  • Hourly

  • Piece Rate


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Base Pay Adjustments

  • Merit

  • Skill based

  • Step rate

  • Lump Sum

  • Cost of living

  • Adjustments


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Base Pay Adjustments

  • Differentials

    • Shift

    • Weekend/holiday

    • Ex-patriate

    • Geographic


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Variable Pay

  • Pay at risk

    • Commissions

    • Bonuses

      • Annual

      • Spot

    • Profit sharing

    • Equity

      • Options

      • Stock grants

      • Restricted stock


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Putting it all Together

  • Evaluate programs:

    • Are they achieving the objectives you wanted them to?

    • Are the elements balanced for maximum impact?

    • Are they in alignment with HR strategy?

      • Attract

      • Retain

      • Motivate


  • Login