Are you constantly fighting against leadership in your organization? Too often executives resist comp planning because they see it as a set of rules intended to limit their authority to make good
Are you constantly fighting against leadership in your organization? Too often executives resist comp planning because they see it as a set of rules intended to limit their authority to make good decisions.
1. Mykkah Herner, MA, CCPSenior CompensationConsultant, PayScale, Inc.Kit RedwineClient Executive, PayScale, Inc.www.payscale.com4 Steps for Getting Execs toCare About Compensation
2. www.payscale.com14,000 Positions2500 Customers36 Million SalaryProfiles250 CompensableFactors11 Countries
3. www.payscale.comAGENDAo Step 1: Communicate with Execs in their Languageo Step 2: Align to Business Goalso Aligning comp plan for impacto Defining the competitiono Step 3: Incorporate Leading Edge Practiceso ROI on comp investment vs. pay-for-performanceo Pay grades and ranges vs. broad bandso Stay nimbleo Step 4: Keep Execs Up-to-Date with Quick Snapshotso Immediate Action
4. www.payscale.comSTEP 1Communicate with Execsin Their Language
5. www.payscale.comKnow your Audienceo Leaders don’t want to be told what to doo Leaders can be distrustful of changeo Leaders are decision-makerso Many leaders have access toinformationo What matters to your leaders?
6. www.payscale.comExec Communication Basicso Kill the HR Jargon, yet do use enough industrylanguage to demonstrate your knowledgeo Don’t present problems without solutionso Describe how you will solicit their inputo Focus on results not processeso Be succincto Strike an appropriate level of urgency
7. www.payscale.comUsing Comp Terms with Execso Compa-Ratio = are we on track with our pay philosophy?o Market Ratio = How are we doing vs our competitors?o Range Penetration = How well are employees movingthrough their ranges – do the ones at the top deserve it?o Green-Circled Employees = We may be untruthful and/orpaying un”fair”ly.o Red-Circled Employees = These are employees we decideto pay more, even though the data doesn’t support it.o Range Width = how much flexibility do we give ourmanagers in setting pay?
8. www.payscale.comFor example…o Don’t say…o I’m going to create a compensation plan to providemore structure to how salary decisions are made.o Instead say…o I’ve noticed some challenges that continue to disruptour ability to do business and I want to help fix them.Therefore I would like to facilitate a process to defineand articulate the goals of our comp program.
9. www.payscale.comSTEP 2Align to Business Goals
10. www.payscale.comAligning comp plan withbusiness goalsWhy alignment matterso Comp plans vary from org to orgo Comp plan should support business goalso Alignment shows you’re in tune with org needsWhat’s on the business agenda?o Focus on growtho Emphasis on doing more with less
11. www.payscale.comBenchmarking to market vsDefining the competitionWhere are you recruiting or losing losing your talent?o Get specific, but not too specifico Define the appropriate labor market (s) by:o Industryo Sizeo Locationo Local, Regional, Nationalo Urban vs Rural
12. www.payscale.comFor example…o Don’t say…o I’m going to benchmark against the market and create salaryranges.o Instead say…o “I’ve noticed (State the business problem you are trying tosolve). I think it’s important that we decide where we thinkwe want to be with compensation and what is going to serveour business best. I’m going to do some research on wherewe get and/or lose our talent and present my findings to youso we can decide what course of action we need to take.
13. www.payscale.comSTEP 3Incorporate Leading EdgePractices
14. www.payscale.comROI on Comp Investmento Comp trend of yesterday: COLAo Leading edge practice: Pay for Performanceo Exceeds expectationso Meets expectationso Does not meet expectations
15. www.payscale.comPay Grades and Rangeso Comp trend of yesterday: Broadbandso Leading edge practice: Pay Grades & Ranges
16. www.payscale.comStay Nimbleo Consider “the mix”o Determine level of transparencyo Be able to keep your comp plan current without a full-blownproject
17. www.payscale.comFor example…o Don’t say…o I think it’s time to move to a pay-for-performancecompensation structure.o Instead say…o We have each been tasked with making sure we’rebeing good stewards of our budgets. Sincecompensation is my biggest expense, I want to ensureour organization is doing everything we can to get thebest ROI from our compensation costs. I’d likepermission to explore compensation structureimprovements.
19. www.payscale.comReport High Level Infoo Get them familiar with a dashboard (Compa Ratio, Market Ratio, etc)o Report these on a regular basis
20. www.payscale.comReport Relevant InfoExecs are also Managerso Give them tools for success:o Flight Risk report & the inverse reporto Disparate Pay reporto Give them insight into what employees care abouto Am I making enough money to cover my basic needs (entry level)o Am I being paid fairly (professional level)o Am I being paid enough to deal with managing people (Mgrs/Dirs)o Give them talking points for comp conversations with employees
21. www.payscale.comImmediate Action1) Begin conversation about comp reporting2) Consider how leading edge comp practiceswould impact your organization3) Evaluate current comp policy4) Framing Comp & HR plans:• Results-Oriented• Clarify the problem and present options• Align to business goals• Minimize jargon
22. Mykkah Herner, MA, CCPSenior CompensationConsultant, PayScale, Inc.Kit RedwineClient Executive, PayScale, Inc.www.payscale.comPayScale Delivers Where Other Compensation Providers Fall ShortPayScale leads the world in compensation knowledge with the freshest andmost detailed data from over 36 million salary profiles. More than 2500organizations use PayScale’s software and intelligence to get the greatestreturn on their talent. Smart businesses use PayScale Insight to recruit, retainand motivate their people.Visit our blog: www.payscale.com/compensation-todayJoin our Group on LinkedIN: Compensation Today: HR Best Practices