Compensation andPlanning for the Future          Presented by:            Ann Bares     E. James (Jim) Brennan         Lau...
Today’s PresentersAnn Bares                 E. James (Jim) Brennan   Laura SchroederManaging Partner,         Senior Assoc...
The Story Research Tells UsAnn BaresManaging Partner, Altura ConsultingGroup
2012 Salary Increase BudgetsEmployee Group                              WorldatWork                       Hay Group       ...
2012 Salary Structure AdjustmentsEmployee Group                              WorldatWork                       Hay Group  ...
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   ...
Put in Larger Economic Context  12.0%  10.0%   8.0%   6.0%   4.0%   2.0%   0.0%                2006            2007       ...
With an Interesting Twist
The State of Variable Pay                                  2006            2007        2008   2009   2010   2011% of organ...
Most Popular Programs/Practices                               Top ThreeProgram                             2009   2010   2...
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 yo...
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•  ...
Compensation 2.0Five Trends That Will Change    How We Think About        CompensationLaura SchroederGlobal Talent Special...
5 Trends in Compensation1.    Evolving Role of Salary Surveys2.    A New Kind of Workforce3.    Flexible Compensation4.   ...
Evolving Role of Salary Surveys•  Hard to get reliable non-US information•  Jobs are evolving – new jobs, ‘hybrid’ jobs•  ...
A New Kind of Workforce•  Global, contingent, multi-generational,   flexible, virtual•  Different locations, priorities, w...
Flexible Compensation•  Compensation should support your strategic   workforce goals•  Your compensation processes should ...
New Business Priorities•  Business priorities that shaped current   compensation have changed•  It’s a good time to analyz...
Growing Demand for Transparency•  Clear communication – and a bit of positive   spin – can make the difference between   r...
Questions and (Hopefully)  Answers
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.

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Compensation and Planning for the Future

  1. 1. Compensation andPlanning for the Future Presented by: Ann Bares E. James (Jim) Brennan Laura Schroeder August 18, 2011
  2. 2. 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
  3. 3. The Story Research Tells UsAnn BaresManaging Partner, Altura ConsultingGroup
  4. 4. 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
  5. 5. 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
  6. 6. Another More Chaotic Reality
  7. 7. 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
  8. 8. 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
  9. 9. With an Interesting Twist
  10. 10. 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
  11. 11. 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%
  12. 12. Making Compensation Planning DynamicE. James (Jim) BrennanSenior AssociateERI Economic Research
  13. 13. Budgeting Principles•  Fixed budget = guaranteed expense•  Human enterprises, dynamic treatments
  14. 14. 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
  15. 15. Timing of Increases•  Simultaneous (Focal)•  Variable (Anniversary)
  16. 16. Expect Variations•  Prepare A B C budgets•  Randomness is lumpy•  Human reality is rarely neat, smooth or symmetrical•  Ready, aim, fire, score, adjust, repeat
  17. 17. Compensation 2.0Five Trends That Will Change How We Think About CompensationLaura SchroederGlobal Talent SpecialistWorkday
  18. 18. 5 Trends in Compensation1.  Evolving Role of Salary Surveys2.  A New Kind of Workforce3.  Flexible Compensation4.  New Business Priorities5.  Growing Demand for Transparency
  19. 19. Evolving Role of Salary Surveys•  Hard to get reliable non-US information•  Jobs are evolving – new jobs, ‘hybrid’ jobs•  Growing emphasis on total rewards
  20. 20. A New Kind of Workforce•  Global, contingent, multi-generational, flexible, virtual•  Different locations, priorities, work styles•  Growing demand for cost and performance analysis
  21. 21. 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
  22. 22. 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
  23. 23. 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
  24. 24. Questions and (Hopefully) Answers
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