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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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Presentation Transcript
compensation

Compensation

Deborah Marsh

November 2006

total rewards
Total Rewards
  • Total Rewards definition
  • Why Total Rewards?
  • Elements of Total Rewards
    • Compensation
    • Benefits
    • Work Environment
  • Total Rewards Strategy
slide3
FLSA
  • Law impacting compensation more than any other law
  • Enacted in the 30’s
  • Major components
    • Child labor restrictions
    • Minimum wage
    • Overtime provisions
elements of compensation
Elements of Compensation
  • Fixed pay
  • Variable Pay
determining base pay
Determining Base Pay
  • Build Job Worth Hierarchy
    • Job analysis
    • Job documentation
    • Job evaluation
    • Job worth hierarchy
    • Base pay structure
determining base pay6
Determining Base Pay
  • Job analysis
    • Document work methods and processes
    • Training
    • Performance Appraisal
    • Qualifications
    • Legal compliance
determining base pay7
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)
determining base pay8
Determining Base Pay
  • Job Evaluation
    • Ranking
    • Classification
    • Point factor
    • Market pricing
determining base pay9
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
determining base pay10
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
example job worth hierarchy
Example Job Worth Hierarchy

Position Market

Director of HR $100,000

Accountant $ 85,000

Marketing Analyst $ 75,000

Payroll Clerk $ 40,000

Receptionist $ 25,000

base pay structure
Base Pay Structure
  • Includes policies
    • Tied to philosophy
    • Hire rates, promotion, demotion
  • Pay range
    • Minimum, midpoint, maximum
    • Often multiple
example base pay structure
Example Base Pay Structure

Grade Min Mid Max

10 $48 63.6 78.2

9 $41.7 54.3 66.8

8 $37.1 47.3 57.5

.

.

4 $27.8 32.7 37.5

types of base pay
Types of Base Pay
  • Salary
    • Weekly
    • Monthly
    • Biweekly
  • Hourly
  • Piece Rate
base pay adjustments
Base Pay Adjustments
  • Merit
  • Skill based
  • Step rate
  • Lump Sum
  • Cost of living
  • Adjustments
base pay adjustments16
Base Pay Adjustments
  • Differentials
    • Shift
    • Weekend/holiday
    • Ex-patriate
    • Geographic
variable pay
Variable Pay
  • Pay at risk
    • Commissions
    • Bonuses
      • Annual
      • Spot
    • Profit sharing
    • Equity
      • Options
      • Stock grants
      • Restricted stock
putting it all together
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