Compensation and Planning for the Future
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Compensation and Planning for the Future

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TLNT Webinar from 8/18/11, presented by Ann Bares, Jim Brennan and Laura Schroeder.

TLNT Webinar from 8/18/11, presented by Ann Bares, Jim Brennan and Laura Schroeder.

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Compensation and Planning for the Future Compensation and Planning for the Future Presentation Transcript

  • Compensation andPlanning for the Future Presented by: Ann Bares E. James (Jim) Brennan Laura Schroeder August 18, 2011
  • Today’s PresentersAnn Bares E. James (Jim) Brennan Laura SchroederManaging Partner, Senior Associate, Global Talent Specialist,Altura Consulting Group ERI Economic Research WorkdayCompensation Café Compensation Café Compensation CaféFounder & Editor Contributor Contributor
  • The Story Research Tells UsAnn BaresManaging Partner, Altura ConsultingGroup
  • 2012 Salary Increase BudgetsEmployee Group WorldatWork Hay Group ERIHourly Nonexempt 2.9% 3.0% 2.6%Salaried Nonexempt 2.9% 3.0% 2.8%Salaried Exempt 2.9% 3.0% 2.9%Officers/Executives 2.9% 3.0% 3.0% Steady as She Goes…Sources:WorldatWork 2011/2012 Salary Increase Budget Survey, Hay Group’s U.S. Database (7/11 Press Release), ERI 2012 SalaryIncrease Survey
  • 2012 Salary Structure AdjustmentsEmployee Group WorldatWork Hay Group ERIHourly Nonexempt 1.9% -- 1.4%Salaried Nonexempt 1.9% -- 1.5%Salaried Exempt 1.9% -- 1.6%Officers/Executives 2.9% -- 1.7% …Playing a Little Catch-Up?Sources:WorldatWork 2011/2012 Salary Increase Budget Survey, Hay Group’s U.S. Database (7/11 Press Release), ERI 2012 SalaryIncrease Survey
  • Another More Chaotic Reality
  • The General Salary Program Picture 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 Salary increases Structure adjustmentsSources:WorldatWork 2011/2012 Salary Increase Budget Survey
  • Put in Larger Economic Context 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 -2.0% Salary increases Structure adjustments CPI UnemploymentSources:WorldatWork 2011/2012 Salary Increase Budget Survey
  • With an Interesting Twist
  • The State of Variable Pay 2006 2007 2008 2009 2010 2011% of organizations 79% 80% 81% 80% 80% 79%using variable pay The percent of organizations using variable pay hovering around 80%Sources:WorldatWork 2011/2012 Salary Increase Budget Survey
  • Most Popular Programs/Practices Top ThreeProgram 2009 2010 2011Employee referral bonus 66% 55% 62%Sign-on/hiring bonus 64% 50% 62%Market adjustments to base salary 37% 35% 60% Next TwoProgram 2009 2010 2011Spot bonus 39% 36% 48%Non-cash recognition -- 38% 41%
  • Making Compensation Planning DynamicE. James (Jim) BrennanSenior AssociateERI Economic Research
  • Budgeting Principles•  Fixed budget = guaranteed expense•  Human enterprises, dynamic treatments
  • PPPPPP1.  Anticipate your market situation2.  Target Midpoints or Job Values •  study your market ratios •  analyze your compa-ratios •  define your closure needs3.  Plan action steps to •  minimize residual risk exposures •  remedy shortfalls over time •  protect key talent
  • Timing of Increases•  Simultaneous (Focal)•  Variable (Anniversary)
  • Expect Variations•  Prepare A B C budgets•  Randomness is lumpy•  Human reality is rarely neat, smooth or symmetrical•  Ready, aim, fire, score, adjust, repeat
  • Compensation 2.0Five Trends That Will Change How We Think About CompensationLaura SchroederGlobal Talent SpecialistWorkday
  • 5 Trends in Compensation1.  Evolving Role of Salary Surveys2.  A New Kind of Workforce3.  Flexible Compensation4.  New Business Priorities5.  Growing Demand for Transparency
  • Evolving Role of Salary Surveys•  Hard to get reliable non-US information•  Jobs are evolving – new jobs, ‘hybrid’ jobs•  Growing emphasis on total rewards
  • A New Kind of Workforce•  Global, contingent, multi-generational, flexible, virtual•  Different locations, priorities, work styles•  Growing demand for cost and performance analysis
  • Flexible Compensation•  Compensation should support your strategic workforce goals•  Your compensation processes should be as dynamic as your workforce•  Once a year performance and compensation review may not cut it
  • New Business Priorities•  Business priorities that shaped current compensation have changed•  It’s a good time to analyze whether business priorities match what is actually rewarded•  Everyone should have an incentive to perform as an individual as well a stake in overall company performance
  • Growing Demand for Transparency•  Clear communication – and a bit of positive spin – can make the difference between resentment and gratitude•  Be honest about your total rewards offering•  Total rewards statement to showcase your real investment in people
  • Questions and (Hopefully) Answers