In the final installment of the Compensation Budgeting webinar series you will learn about the software and data you need to formalize your compensation strategy.

1. Mykkah Herner, MA, CCP
Head of Professional Services
Ian Englund, CCP
Sr Compensation Professional
PayScale, Inc.
www.payscale.com

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14,000 Positions 3000 Customers 11 Countries
250 Compensable Factors
40 Million Salary Profiles

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Three-part Series on Compensation Budgeting
Part I: Managing Pay Inequities
Part II: Determining Raises
Part III: Putting it all together with PayScale Insight

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Agenda
Recap of Parts I & II Part III
•Identifying Pay Inequities – Org Level
•Identifying Pay Inequities – Position Level
•Identifying Pay Inequities – Employee Level
•Calculating Pay Increases

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Start with a plan
•Know your comp Philosophy, Strategy, and Policy
•Get reliable market Data
Identify comp inequities at Org, Dept, Position, and Individual levels
•Org/Plan level: fair pay to market
•Dept level: fair pay across departments
•Position level: have some positions move faster than others?
•Employee level: are you paying according to your policy? Fairly based on EEO status?
Develop solutions
Recap of Part I
http://resources.payscale.com/hr-webinar-recorded-compensation-budgeting-three-part-series.html

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Know what you want to reward
Streamline the increase process
Calculate pay increases
•Market-based
•Merit-based
Develop budget recommendations
•Range Adjustments (Org level)
•Market Adjustments (Position level)
•Equity Adjustments (Individual level)
•Pay Increase Adjustments
Recap of Part Il
http://resources.payscale.com/hr-webinar-recorded-compensation-budgeting-three-part-series.html

7. Organizational Level Pay Inequities

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Identifying Org Level Inequities
Ranges to Market
oExamine Ranges to Market on the whole – do most move up? Most move down? What’s the average?
oDo you want to move ranges at this time?
oBudget
oOrganizational demands

9. Position-Level Pay Inequities

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Identifying Position Level Inequities
Ranges to market by position
oDoes the market suggest moving the position to a new grade?
oWhat are the EE compa-ratios for those positions?
oDecide which to move – examine where other positions are in the job family
oHow to identify what type of market premium could be applied to a position (vs moving the grade)

11. Employee-Level Pay Inequities

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Identifying Employee Level Inequities
oPaying according to policy:
•green-circled, red-circled
•compression
oEEO Concerns
•resolve critical issues asap

13. Calculating Pay Increases

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Using a Matrix (Merit or Proficiency)
Tier increases by position in range & performance
oStart with a budget increase %
oAllocate increases to EEs based on range penetration and performance
oCreate spreadsheet
oNote: Proficiency, or another factor, can work like performance in this example

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Increase Spreadsheet
Name
Job Title
Current Annual Base
Range Min
Range Mid
Range Max
Compa- Ratio
Range Penetration
Increase %
Annualized Increase
New Annual Base
New Compa- ratio
New Range Penetration
Alexander, Maria
Account Manager
$45,900
$46,300
$57,100
$67,900
0.804
-2%
3.80%
$1,744
$47,644
0.83
6%
Arnold, Alexandra
Driver I
$29,600
$29,300
$35,700
$42,100
0.829
2%
3.80%
$1,125
$30,725
0.86
11%
Baker, Nicholas
Account Executive
$46,500
$40,400
$49,800
$59,200
0.934
32%
3.80%
$1,767
$48,267
0.97
42%
Allen, Ryan
Program Manager
$86,700
$73,600
$93,300
$113,000
0.929
33%
3.80%
$3,295
$89,995
0.96
42%
Bailey, Sara
Senior Account Executive
$64,000
$54,700
$68,400
$82,100
0.936
34%
2.80%
$1,792
$65,792
0.96
40%
Anderson, James
Customer Service Rep
$45,500
$34,900
$42,500
$50,100
1.071
70%
1.90%
$865
$46,365
1.09
75%
Andrews, Vincent
Senior Account Executive
$76,700
$54,700
$68,400
$82,100
1.121
80%
1.90%
$1,457
$78,157
1.14
86%
Adams, Christina
Account Manager
$63,800
$46,300
$57,100
$67,900
1.117
81%
1.90%
$1,212
$65,012
1.14
87%
Total/Average
$458,700
0.967625
41%
2.96%
$13,257
$471,957
1.00
49%
SUM
AVG
AVG
AVG
SUM
SUM
AVG
AVG
•Compa-Ratio = Current Annual Base / Range Mid
•Range Penetration = (Current Annual Base – Range Min) / (Range Max – Range Min)
•Annualized Increase = Increase % * Current Annual Base
•New Annual Base = Annualized Increase + Current Annual Base
•New Compa-Ratio = New Annual Base / Range Mid
•New Range Penetration = (New Annual Base – Range Min) / (Range Max – Range Min)

16. PayScale Delivers Where Other Compensation Providers Fall Short
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Visit our blog: www.payscale.com/compensation-today
Join our Group on LinkedIn: Compensation Today: HR Best Practices
Mykkah Herner, MA, CCP
Manager of Professional Services,
PayScale, Inc.
www.payscale.com