PayScale Customer Webinar: 2016 Compensation Best Practices Report
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The document summarizes compensation strategies and practices of top performing companies compared to all other companies. It finds that top performers are more likely to pay above the 50th percentile for competitive jobs, have transparent communication about compensation, give individual and team bonuses, agree that employees are their best asset, provide good raises, and give total compensation statements to employees. The document provides examples and recommendations for these best practices to help companies emulate the approaches of top performers.
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PayScale Customer Webinar: 2016 Compensation Best Practices Report
- 2. www.payscale.com Tim Low SVP Marketing Mykkah Herner Modern Comp Evangelist
- 4. 15,000 Positions 3500 Customers 11 Countries 250 Compensable Factors 54 Million Salary Profiles 15,000 Positions 3500 Customers 11 Countries 250 Compensable Factors 54 Million Salary Profiles
- 5. 7,600 Respondents 11% 15% 8% 5% 11%11% 8% 31% Business Engineering & Science, Technology Retail & Customer Service Education Manufacturing Medical & Healthcare 45% 35% 20% Less than 100 Employees 100-1,000 Employees More than 1,000 Employees 22% 51% 12% 15% Individual Contributor Manager Vice President C-Level
- 6. Meet the Comptopians This year, we compared compensation practices of top performers with all other companies. Top performers are defined as being market leaders who exceeded their revenue goals in 2015. www.payscale.com
- 7. What do top performers do better? are willing to pay above the 50th percentile for competitive jobs have transparent communication about comp give bonuses; 30% give team bonuses believe their people are their best asset provide a total rewards statement www.payscale.com
- 8. Pay above the 50th percentile for competitive jobs www.payscale.com
- 9. Equal isn’t necessarily fair Industry: IT Services Size: 200 EEs Location: Seattle, WA Industry: IT Services Size: 10,000 EEs Location: Seattle, WA ONE-STRATEGY-FITS-ALL SEGMENTED WORKFORCE Industry: IT Services Size: 200 EEs Location: Seattle, WA www.payscale.com
- 10. Define your strategy Talent Market(s) Industry, Size, Location Set up Labor Markets Level of competitiveness How aggressively to pay Enter target percentile What to reward Performance, Experience, etc Upload values www.payscale.com
- 11. Navigate to Strategy Manager www.payscale.com
- 12. Navigate to Strategy Manager Note: if you’re in a Ranges project, it will be in the same place www.payscale.com
- 13. Group and enter target values www.payscale.com
- 16. Employee Reporting Share the rationale for pay decisions with managers & train them to talk with employees. Provide talking points. www.payscale.com
- 17. Job Reports & Employee Reports www.payscale.com
- 18. www.payscale.com Job Report: Compensation Summary
- 19. www.payscale.com Job Report: Job Summary www.payscale.com
- 20. www.payscale.com Job Report: Salary by Experience www.payscale.com
- 21. Give Individual & Team Bonuses www.payscale.com
- 22. Mix of pay www.payscale.com Company culture, compensation philosophy, and compensation strategy Base pay plan Variable or incentive pay plan Individualized rewards & recognition
- 23. www.payscale.com Total Cash Compensation Analysis www.payscale.com Employee to Market Report, TCC view
- 24. www.payscale.com Employee Pay to Market Compares your internal pay (green) with market (purple) Looks at both base and total cash compensation (TCC) www.payscale.com
- 25. www.payscale.com TCC Comparison Market Ratio Look at both base and TCC charts Employee Pay Market at Target www.payscale.com
- 26. Agree that “our people are our best asset” www.payscale.com
- 27. Put your money where your mouth is – give good raises www.payscale.com top performing companies gave increases in 2015 of
- 32. www.payscale.com Raise Recommender www.payscale.com Group, sort, export increase recommendations
- 34. Total Compensation Statement www.payscale.com Prepare your managers Explain the report Give them talking points Anticipate employee questions
- 36. www.payscale.com EE Report, Total Comp Statement www.payscale.com Select and Download PDF
- 37. www.payscale.com Describing the Total Comp Statement www.payscale.com
- 38. Check out the 2016 CBPR View interactive charts and download the report www.payscale.com/cbpr Keep an eye out for upcoming webinars that will return you to Comptopia all year long. Viva Comptopia! www.payscale.com
Editor's Notes
- NOTE: Tim, I think for these purposes, it is better to say “top performers to all other companies” versus “top performers versus average companies” which comes across like a value judgment. Your call: just a question of how aggressive you want to sound.
- Willing to pay >50th for competitive jobs 61% vs 54% Embrace transparent communication about pay 47% vs 39% Give bonuses 81% vs 74% & Give team bonuses 30% vs 26% Our people are our best asset – 86% top performing vs 78% Provide total rewards statement 47% vs 39%
- Top three boxes are what Bottom three boxes are how to do this in Insight We’re going to dig into target percentile
- It’s not an on-off switch, there are levels of transparency, and it’s important for every organization to figure out the right level for them Maintain consistency. As managers, when you communicate about compensation, you need to be consistent. If one manager is sharing more with his/her team than another, then employees may start to question why that is? Does their manager know about the comp plan? Can they advocate for their team? That can create doubt and have them question fairness. The millennial workforce – they grew up with the internet and are used to having information at their finger tips. They typically want higher levels of transparency and are much more public about their pay then the generations before them. While it may not be right for every organization to share everything, we find that if a company shares some information, it fosters more confidence from the millennials in your organization.
- Here’s what it is then here’s how you talk about it Describe sections, Don’t skip words at top Percentile -> your market target will be highlighted, this is what it means
- Job Summary Factors that influence pay for the job, based on how you defined it. Report Stats This is where the conversation should happen around what is needed for success in the role
- What this is How to talk about it This job is defined as 12, so we fall in that, 65th is in between General idea of how much years of experience affects pay for this job Can pull if you don’t feel comfortable showing this. E.g if individual’s experience doesn’t show well on report, so if they have more than 12
- Describe chart & summary Different groupings
- Describe every column Hovering over the distribution column will tell you how many people fall into each distance from the market. Note: I didn’t do this because the hover chart is wrong. Market ratio should be closer to 1 for smaller groups Export will put both base & TCC numbers onto one grid
- Nearly half of all top performing companies who give bonuses are increasing the size of their bonus budget in the coming year