This document discusses compensation strategies for IT companies. It begins by outlining the key factors that CEOs are concerned with regarding motivation, satisfaction, retention, attraction and self-actualization of employees. It then discusses different types of reward systems and compensation, including direct financial compensation like base salary and incentives, and indirect compensation like benefits. The document provides details on determining salary, including job descriptions, evaluations, market analysis and pay structures. It also outlines salary review processes, the use of merit pay and incentives in compensation, as well as key metrics for evaluating compensation programs.

1. Compensation
PUZZLES in IT
Lesya Bobyk, HR Director at SoftServe Inc,
For HT IT Conference

2. What wakes your company CEO
up at night?

4. MOTIVATION
SATISFACTION
RETENTION
ATRACTION
SELF-
ACTUALIZATION

5. MOTIVATION
SATISFACTION
RETENTION
ATRACTION
SELF-
ACTUALIZATION

6. MOTIVATION
SATISFACTION
RETENTION
ATRACTION
SELF-
ACTUALIZATION

7. Wage
Salary
Reward
Compensation

8. Reward System
Intrinsic
Rewards
Extrinsic
Rewards
Nonfinancial Financial
Direct
Compensation
Base
Wage/Salary
Merit &
Incentives
COLA ( or CCA)
Indirect
Compensation
Day-
offs/Vacation
Protection
programs
Employee
Services &
Perks

9. Wage & Salary

10. Factors Influence
Wage and Salary Structure
Organization’s ability
to pay
Supply and demand
for labor
Prevailing market
rate
Cost of living
Job requirements
Managerial attitudes
Psychological and
sociological factors

11. Salary Determination Process
Step1
Job
Description
Step2
Job
Evaluating
Step3Salary
Market
Analysis
Step4
Salary
Structure
Step5
Salary
Payment

13. Wage &
Salary
Concept
Performance
Based
Grades
Based
Competency
Based

15. Wage and Salary Review Process
Monthly Salary Review Meeting
Employee’s
Salary
Line
Manager
Employee
Career
Advisor

16. Wage and Salary Review Process
Salary Review Rules
Employee’s
Salary
Salary
Review
Reason
Next Salary
Review
Steps
Salary
Ranges
Frequency
% Increase

17. Wage and Salary Review Process
Salary Communication Rules
Why!
How
much!
Why!
Next
Steps!

18. Merit & Incentives

19. Short Term
• Technical
Interviewer
• Internal Trainer
• Competency
Expert
• Referral Bonus
• etc
Long Term
• Performance
Bonus
• Profit Sharing
• Stock Options
• Period of Services
• etc
M&I Category

20. Individual Managerial Corporate
Piece Rate Gain Sharing Profit Staring
Bonuses Quality Improvement ESOP
Special Recognition Cost Reduction Deferred Compensation
M&I Levels Difference

21. Key Compensation Metrics
• % Salary of Revenue
• Average Salary
• Above Salary Ranges

22. Company-Related Outcomes
Forecasting ability
Workforce flexibility
Increase
effectiveness of work
teams
Increase employee’s
output per month
Career-enhancement
opportunity

23. HR-Related Outcomes
 Job evaluation needs
endorsement from
management
Compensation policy
education
 Periodical policy
review
Take feedback from
people

24. People do what they do to satisfied their needs
Long term security vs. sudden higher $sum
What you see is not what you get
As you sow, so you reap
To the End