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Compensation Budgeting Part III:

Putting it all together with
PayScale Insight
Mykkah Herner, MA, CCP
Manager of Professi...
Three-part Series on
Compensation Budgeting
Part I: Managing Pay Inequities

Part II: Determining Raises

Part III: Puttin...
14,000 Positions

3000 Customers

11 Countries

40 Million Salary Profiles
250 Compensable Factors

www.payscale.com
Agenda
Recap of Parts I & II
Part III
Identifying Pay Inequities – Org Level
Identifying Pay Inequities – Position Level
I...
o Start with a plan
o Know your comp Philosophy, Strategy, and
Policy

Recap of
Part I

o Get reliable market Data

o Iden...
o Know what you want to reward
o Streamline the increase process

Recap of
Part II

o Calculate pay increases
o Market-bas...
Organizational Level
Pay Inequities
Identifying Org Level Inequities
Ranges to Market
o Examine Ranges to Market on the whole – do most move up? Most move
dow...
Position-Level Pay
Inequities
Identifying Position Level Inequities
Ranges to market by position
o Does the market suggest moving the position to a new ...
Employee-Level Pay
Inequities
Identifying Employee Level Inequities
o Paying according to policy:
• green-circled, red-circled

• compression
o EEO Conc...
Calculating Pay
Increases
Using a Matrix (Merit or Proficiency)
 Tier increases by position in range & performance
o Start with a budget increase %...
Increase Spreadsheet
Name

Job Title

Alexander, Maria

Account Manager

Current
Range
Annual Base Min

Range
Mid

Range
M...
PayScale Delivers Where Other Compensation Providers Fall Short
PayScale leads the world in compensation knowledge with th...
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Compensation Budgeting Part 3: Putting it All Together

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In the first two parts of this three-part webinar series, we learned the ins and outs of budgeting around compensation.

In this webinar, Mykkah Herner, M.A., CCP will dive into the PayScale Insight tool to show you how to leverage some of the built-in reports and analytic overviews to help with your budget calculations.

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Compensation Budgeting Part 3: Putting it All Together

  1. 1. Compensation Budgeting Part III: Putting it all together with PayScale Insight Mykkah Herner, MA, CCP Manager of Professional Services Karaka Leslie Product Marketing PayScale, Inc. www.payscale.com
  2. 2. Three-part Series on Compensation Budgeting Part I: Managing Pay Inequities Part II: Determining Raises Part III: Putting it all together with PayScale Insight www.payscale.com
  3. 3. 14,000 Positions 3000 Customers 11 Countries 40 Million Salary Profiles 250 Compensable Factors www.payscale.com
  4. 4. 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 By Market By Performance & Market www.payscale.com
  5. 5. o Start with a plan o Know your comp Philosophy, Strategy, and Policy Recap of Part I o Get reliable market Data o Identify comp inequities at Org, Dept, Position, and Individual levels o Org/Plan level: fair pay to market o Dept level: fair pay across departments o Position level: have some positions move faster than others? o Employee level: are you paying according to your policy? Fairly based on EEO status? o Develop solutions http://resources.payscale.com/hr-thanks-webinarrecording-Compensation-Budgeting.html www.payscale.com
  6. 6. o Know what you want to reward o Streamline the increase process Recap of Part II o Calculate pay increases o Market-based o Merit-based o Develop budget recommendations o Range Adjustments (Org level) o Market Adjustments (Position level) o Equity Adjustments (Individual level) o Pay Increase Adjustments http://resources.payscale.com/hr-thanks-webinarrecording-Compensation-Budgeting.html www.payscale.com
  7. 7. Organizational Level Pay Inequities
  8. 8. Identifying Org Level Inequities Ranges to Market o Examine Ranges to Market on the whole – do most move up? Most move down? What’s the average? o Do you want to move ranges at this time? o Budget o Organizational demands www.payscale.com
  9. 9. Position-Level Pay Inequities
  10. 10. Identifying Position Level Inequities Ranges to market by position o Does the market suggest moving the position to a new grade? o What are the EE compa-ratios for those positions? o Decide which to move – examine where other positions are in the job family o How to identify what type of market premium could be applied to a position (vs moving the grade) www.payscale.com
  11. 11. Employee-Level Pay Inequities
  12. 12. Identifying Employee Level Inequities o Paying according to policy: • green-circled, red-circled • compression o EEO Concerns • resolve critical issues asap www.payscale.com
  13. 13. Calculating Pay Increases
  14. 14. Using a Matrix (Merit or Proficiency)  Tier increases by position in range & performance o Start with a budget increase % o Allocate increases to EEs based on range penetration and performance o Create spreadsheet o Note: Proficiency, or another factor, can work like performance in this example www.payscale.com
  15. 15. Increase Spreadsheet Name Job Title Alexander, Maria Account Manager Current Range Annual Base Min Range Mid Range Max CompaRatio New Range Increase Annualized Annual Penetration % Increase Base New Compa- New Range ratio Penetration $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% 0.967625 41% 2.96% $13,257 $471,957 1.00 49% Total/Average $458,700 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) www.payscale.com
  16. 16. PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 40 million salary profiles. More than 3000 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people. 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 Karaka Leslie Product Marketing PayScale, Inc. www.payscale.com

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