Top Comp Trends of 2016
•Download as PPTX, PDF•
3 likes•977 views
This year we have seen some big trends emerge in how companies manage compensation. Between pay equity, FLSA changes, and changing performance management trends, there’s been a lot going on. Join PayScale as we look back at this year’s biggest compensation-related trends. In this webinar we’ll: -Cover the major trends of 2016 -Explore the implications of those trends -Peek forward to 2017
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Top Comp Trends of 2016
Similar to Top Comp Trends of 2016 (20)
More from PayScale, Inc.
More from PayScale, Inc. (20)
Top Comp Trends of 2016
- 1. The Top Comp Trends of 2016 Paige Hanley, CCP Manager, Customer Operations Jenni Marquez, CCP Senior Compensation Professional #CompTrends2016
- 4. www.payscale.com Jenni Marquez, CCP Senior Compensation Professional https://www.linkedin.com/in/jennimarquez Paige Hanley, CCP Manager, Customer Operations https://www.linkedin.com/in/paige-hanley #CompTrends2016
- 5. www.payscale.com Major trends of 2016 Should I hop on that train? Looking forward to 2017 Things to do today #CompTrends2016
- 8. www.payscale.com FLSA Minimum Wage Others Gender Pay Equity #CompTrends2016
- 9. 48/50 States have some version of a pay equity law on the books 9/10 Provinces* have some version of a pay equity law on the books 4 states added pay equity laws, 9 in progress #CompTrends2016
- 12. The variable pay umbrella Incentive Project Bonus Retention Bonus Signing Bonus Perks #CompTrends2016
- 13. www.payscale.com What type of bonus? 15.8% 18.1% 61.8% 25.7% 40.0% 14.4% Retention bonuses Hiring bonuses Individual incentive bonuses Team incentive bonuses Spot bonuses or other discretionary bonus programs Other (please specify) #CompTrends2016
- 14. Get Creative Passes to sporting events Catered lunches for winning teams Days off after big deadlines Choice of work assignment Development opportunities Lunch with the CEO Remote work #CompTrends2016
- 16. www.payscale.com 44% of companies said shifting from traditional performance reviews in favor of real-time feedback When asked what would shake up the HR world most in 2016… #CompTrends2016
- 17. www.payscale.com Align to business goals & cycles Pay for results Get creative #CompTrends2016
- 18. Linking Pay to Performance Culture and perks that reward high performers Higher increases for top performers Results-based incentive plan Performance-based rewards & recognition #CompTrends2016
- 20. www.payscale.com Greater awareness of market 2.5% Oct unemployment for college educated 25+ 29% Pay boost commanded by premium skills like Scala 60% Of employees who feel underpaid intend to leave #CompTrends2016
- 21. www.payscale.com Use market data and strategy to drive comp decisions #CompTrends2016
- 22. www.payscale.com EqualFair A note on fairness: Fair doesn’t necessarily mean equal Differentiate* Pay by Performance Results Experience Skills Education *Be aware of legal restrictions #CompTrends2016
- 24. www.payscale.com TOP-PERFORMING of Top-Performing companies are transparent about pay 47% Vs 40% of all companies #CompTrends2016
- 25. www.payscale.com The PayScale Pay Transparency Spectrum #CompTrends2016
- 26. www.payscale.com of employees are ok with low pay if the rationale is explained 82% of companies are confident in managers’ ability to have tough pay conversations 80% of employees paid above market believe they’re paid at or below 17% #CompTrends2016
- 27. www.payscale.com Should I hop on that train? #CompTrends2016
- 28. www.payscale.com It’s not a best practice if it’s not best for your organization #CompTrends2016
- 29. www.payscale.com Baby Boomers 1946 – 1964 Size: 74M Communication About Comp: Private Average Tenure: 15 Years Career Mindset: Loyal Self-driven High Work Ethic Retirement Generation X 1965 – 1979 Size: 66M Communication About Comp: Semi-private Average Tenure: 5 Years Career Mindset: Pessimistic Self-reliant Work/Life Balance Management Millennials 1980 – 1995 Size: 74M Communication About Comp: Public Average Tenure: 18-24 Months Career Mindset: Idealistic Fairness, Flexibility, Values Work/Life Balance Advancement Generation Z 1996 – Present Size: TBD, 69M+ Communication About Comp: Semi-private Average Tenure: TBD Career Mindset: Realistic Multicultural Fluency Technology Native Learning with a Purpose #CompTrends2016
- 30. www.payscale.com Five Generations of 2020 Gen Z Millenials Gen X Baby Boomers Traditionalists Bureau of Labor Statistics Employment Projections
- 31. www.payscale.com Pay structure may differ #CompTrends2016
- 32. www.payscale.com Consider org culture and values workforce preferences industry or regional norms job level and/or function company life cycle budget… #CompTrends2016
- 33. www.payscale.com What can we expect? #CompTrends2016
- 34. www.payscale.com Oval office to your office… #CompTrends2016
- 36. www.payscale.com Things to do today • Celebrate 2016 accomplishments • Sign up with state and local compliance lists • Audit your performance practices • Decide what and how much info to share • Complete a market study • Evaluate your mix of pay #CompTrends2016
- 37. www.payscale.com PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 54 million salary profiles. More than 3500 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 Jenni Marquez, CCP Senior Compensation Professional Paige Hanley, CCP Manager, Customer Operations www.payscale.com #CompTrends2016
Editor's Notes
- Hedge This year we have has seen some big trends emerge in how companies manage compensation. Between pay equity, FLSA changes, and changing performance management trends, there’s been a lot going on. Join PayScale as we look back at this year’s biggest compensation-related trends. In this webinar we’ll: Cover the major trends of 2016 Explore the implications of those trends Peek forward to 2017 Some thoughts on the actual trends: I’m not sure P4P will be more common, but the nature of P4P will change because of more frequent reviews I think employers will get more serious about compliance – FLSA, Minimum Wage, Paid Leave, and Gender Pay Equity. (curious if compliance jobs will be in more demand. Hmm) … don’t want to lose Fair pay emphasis too. Employers will more overtly anchor their plans in data Variable pay will become more prominent and more creative in more organizations We’ll see greater manager empowerment Top performing companies will use more modern comp practices Execs will see comp as a lever in employee engagement practices Pay transparency will increase Employers will care more about engagement Employers will get serious about addressing the gender pay gap Pay for performance will be more common Annual performance reviews will diminish Performance - Pay Compliance – FLSA, Min Wage, Gender Pay Equity Fair Pay - Emphasis on Market-based pay Mix of pay Transparency & Communication
- Hedge Creator of the largest database of individual compensation profiles in the world, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software. PayScale’s products are powered by innovative search and query algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time. Publisher of the quarterly PayScale IndexTM, PayScale's subscription software products for employers include PayScale MarketRateTM and PayScale InsightTM. Among PayScale's 2,500 corporate customers are organizations small and large across industries including Mozilla, Tully’s Coffee, Clemson University and the United States Postal Service.
- PAIGE One thing before we dive in, you’ll see throughout today’s presentation some of the results from our 2016 compensation best practices survey. It’s our biggest survey of the year; we’re currently collecting for the 2017 version of it and we’ve invited over 250,000 professionals and we’d love your input as well. Best part is, you could win a new iPad Air 2 so check that out after this webinar.
- Both, Why am I qualified to talk with you now and/or why am I so excited about Trends Jenni – I’ve helped hundreds of companies setup their compensation plans so I have a good idea of what the trends are in the market. Paige – I’ve held a variety of roles at PayScale and in general I geek out on HR articles so I asked to join Jenni on this topic.
- JENNI Here’s the agenda for the webinar today. We’ll start by giving an overview of the trends we’ve seen in Compensation for 2016. Then we’ll discuss what to consider before adopting any new practices as a result of these trends. To wrap up, we’ll discuss what’s coming up in 2017 and things you can start doing today to modernize your compensation practices.
- JENNI So what are some of the major trends in 2016? Compliance was a hot topic so we’ll talk a bit about FLSA, Minimum Wage, Gender Pay Equity, and so forth. We’ll also talk about trends in Mix of Pay and what companies are doing around Pay for Performance. And we’ll wrap up by talking about trends in Fair Pay and Communicating Comp.
- JENNI 2016 has been a really big year for compliance in compensation. Let’s discuss legislative updates and what trends we’re seeing companies adopt to ensure they comply with the new laws.
- JENNI FLSA Ah, FLSA. The biggest change that wasn’t. The DOL’s proposed changes to FLSA have been top of mind for most HR professionals all year. Folks we’ve talked to report being happy about the work they did to bring the company into compliance They had to do a lot of internal alignment, housekeeping, and had strategic conversations with their leadership team that may not have happened otherwise Despite the recent injunction announced before Thanksgiving, many organizations have already adopted changes to ensure compliance In the news, some major retailers like WalMart and TJ Maxx are announcing their plans to stay the course with their updates regardless of what happens to FLSA Early adopters and organizations who plan to continue as if the law went through December 1st will be in the most competitive market position There are a few things you’ll want to consider if you are still in FLSA limbo Consider what has been communicated to your managers and employees thus far It could be a big hit to morale if you appear to be “flip flopping” on exemption status or pay changes Plus remember that an injunction is just that – it’s stalled the implementation but it hasn’t killed it You may need to be in compliance in the future, so if you’ve already done the work it may make sense to continue with it And again, since so many companies have chosen to stay the course, you will be in a more competitive position if you keep with the proposed changes Min Wage – depending on your state, that may have been on your ballot or laws. (Arizona, Colorado, Maine, WA): Also a salary threshold in NY? Maine decided you can’t use a lower min wage for tip workers; so people got real familiar with these changes in the places they do business Gender Pay Equity – More on the next slide. Minimum Wage Depending on your state, laws may have passed this election cycle that increase minimum wage for jobs in your area Arizona, Colorado, Maine, and Washington state all passed ballot measures to raise the minimum for hourly workers Keep in mind that some municipalities – like San Francisco and Seattle – already have laws in place that dictate a rate higher than either the state or federal level The trend? Despite whatever roadblocks may exist at the federal level, many states and cities are taking it upon themselves to raise the threshold for minimum pay. So it’s safe to assume that changes may be coming to your location soon, if they haven’t already. Other Changes Other legislative changes that relate to compensation include laws on accrued paid sick time (these laws now exist in CT, CA, MA, OR, VT, AZ, and WA) We’ve seen a trend in organizations adopting “Paid Leave for Parents” – in terms of compliance, there isn’t a whole lot mandated yet, but many companies are getting ahead of the game and using “Parental Leave” as a recruiting tactic We’ve also seen some changes regarding classification for independent contactor, which resulted in many companies hiring these contactors as employees to be in compliance In addition, there were updates to EE Reporting, adding compensation as part of the reporting on diversity for companies of a certain size And finally, let’s talk a little bit more about the laws on gender pay equity….
- JENNI There are more stated adding to legislation around gender pay equity all the time. Four new states have implemented or passed laws recently including California, New York, Maine, and Maryland. There are another nine states with gender pay equity laws in the works, including Washington, Michigan, Indiana, Ohio, Pennsylvania, New Jersey, South Carolina, Florida, and Louisiana. There are only two states with no laws on the books – Mississippi and Alabama Our friends to the north have been pretty proactive on gender pay equity. In many cases, the employer has to prove they are paying fairly, especially public employers. Laws have been on the books for decades in most Provinces. Manitoba – 1986 Prince Edward Island – 1988 New Brunswick – 1989 Nova Scotia – 1989 Ontario – 1990 Quebec – 1996 There are three policy frameworks for negotiating pay equity with public sector employees in Saskatchewan, Newfoundland, and British Columbia. Alberta and the three territories (NW territories, Yukon, Nanavut) do not have any equity laws on the books. So the takeaway here is that gender equity is becoming more and more front and center. Even if laws aren’t in place in your area, it may be a good idea to begin looking into your compliance in this area and be proactive about change where it may be needed.
- PAIGE We’re also seeing some continuing trends on being creative and intentional about the whole package or the mix of compensation.
- PAIGE It’s easy to think about comp as just salary but there’s so much more that goes under that label and you should be thinking about all the components and how you want to put them together to make a complete meal. So what are some of those components? The foundational level for most organizations is your pay philosophy, your pay strategy, your company culture, your benefits package, 401k plans, and other perks offered to your employees. From there, we mix in the base (or fixed) pay for employees – their salary or hourly rate. Then we add in variable pay – any commissions, bonuses, or incentive payouts employees are eligible for. Lastly, you’ll also want to factor in your individualized rewards and recognitions, which can be monetary (like tickets to a movie for doing a good job on a project) or non-monetary (like an employee of the month program). Like so many things in compensation, there is no “one-size-fits-all” so you’ll really want to think about each item in the mix and think about what’s the right recipe for your workforce (which will talk a little bit more about later).
- PAIGE I think it’s helpful to dive a little deeper into a few of these areas, one being the term “variable pay”. This can mean a lot of different things to different people so when talking about mix of pay for your organization, it’s good to first make sure you’re all talking about the same thing. Variable pay can cover all of these areas (read list). The thing to know is that more and more, people are using them all. One other I’m seeing that isn’t listed up here is year-end bonuses however I didn’t list it because in general I advise away from using them as they are not as strategic, you don’t really get a good ROI because they’re not tied to anything.
- PAIGE So this is the first piece of data today that we’re sharing from the 2016 CBPR Data. And this one in particular was asking the question about what types of bonuses were respondents giving out. I don’t think it’s a huge shock to see that most organizations are mostly giving out individual bonuses but I did think it was interesting to see that more than a quarter of them are doing team incentives which is a newer trend. It will be interesting to see if that continues in 2017.
- PAIGE Last thing I’ll say about mix of pay is that we’re definitely seeing more and more companies getting creative, particularly ones that are under a tight budget and need to get scrappy. What does get creative mean? Well it can be things like …Read through some of list I’ll share two stories about how these can work. Anyone who attended the World at Work conference this year probably heard Josh Linkner speak and one of my favorite stories he shared was when his CFO told him they wouldn’t have much money for incentives that year. It came out to about $200 per person that they could give. He decided to figure out a way to make that $200 the biggest impact it could be…tell about best buy day. Second short story is from us at PayScale. We decided to offer lunch with the CEO to an internal team as a reward for completion of a specific goal only to find out that the CEO was not the exec they most wanted to have lunch with! Lucky for us our CEO goes out of his way to be extremely accessible but they person they really wanted to talk to was our Chief Engineering Officer so the point is, make sure if you start getting creative that the alternative rewards you’re dreaming up are actually motivating for your group.
- JENNI Performance seems to be a hot button issue in compensation today, so let’s talk a bit about what trends we’re seeing in this area.
- JENNI In our 2016 Compensation Best Practices Report, we surveyed companies to find out what they thought would shake up the HR world the most in 2016. Almost half of companies said revamping performance reviews and turning to more real-time feedback was likely the biggest change happening in HR. So what happened in 2016? Anecdotally I can tell you a lot of organizations I partner with are moving in this direction – away from the annual review and toward more frequent performance conversations with employees. Those could be quarterly, monthly, even bi-weekly check-ins. Many organizations have said their goal is move away from performance being a once-a-year topic and rather something that you’re talking about in an ongoing fashion. We’ll find out more once we receive results from our 2017 Comp Best Practices survey so stay tuned.
- JENNI Decided you want to shake up the way your company does performance management? Here are three areas that most organizations are saying could use some improvement. 1) Align Performance Management to Business Goals and Cycles. Performance management should: Motivate employees, not cause a “flight or fight” reaction It should put managers front and center, rather than as passive deliverers of a message – “Here’s what HR said you’re getting this year” Have specific metrics and ways of measuring performance And it should drive business results – this is probably where organizations are struggling the most Goals aren’t always written in a way that links them to business outcomes or objectives – employees are lacking line of sight into how their efforts contribute to the success of the company Payouts take place long after the results are in so its difficult to demonstrate to the employee how pay and performance are linked 2) Pay for Results When pay for performance first became a trend, people were really excited Finally, we’re moving away from the “show up to work and you’ll get an increase” model to something more meaningful What we’ve discovered is that when companies say the want to “pay for performance” what they’re ACTUALLY wanting is to “pay for results” For example, let’s say you have a Blog Writer on your Marketing Team who wrote 12 blogs last month That performance is pretty great – the amount of work turned around in that timeframe would likely be deemed as meeting or exceeding expectations BUT…did that work drive any business results? Did the company see an increase in traffic to their website? If not, then do we really want to be paying for just the performance considering there was no boost in results? Companies are now evaluating how to better design their goals/metrics to drive results – rather than just paying for performance 3) Get Creative There is an interesting thread on our internal community site dedicated to this topic of paying for performance Specifically, the question was asked, “if you get rid of performance ratings, then how can you really LINK pay with performance in an equitable and legally defensible way?” HR Professionals on the thread vouched for not removing the ratings entirely, but rather just increasing the frequency of review One organization is looking at a crowdsourcing method to gathering feedback on employee performance Some HR Professionals introduced the idea of paying for learning or acquisition of key skills/competencies Many organizations are looking for “out of the box” solutions to what has historically been a very robotic process. At the end of the day, if you decide to adjust your performance management practices, do so with your company culture in mind.
- JENNI Organizations that are committed to pay for performance demonstrate that commitment at all levels within compensation. Here we’re showing cupcake tiers as another way to think about the compensation mix. Again, if you’re an organization states they pay for performance, then that commitment should be present at all levels. The bottom tier guides the setup of the compensation plan. If you plan to pay for performance, that language should be clear in your strategy and philosophy statement The next tier up is the fixed pay for employees. If you’re paying for performance, then top performers are going to receive larger base pay increases. Layered on the fixed pay is the variable pay plan, which is usually performance based – those that reach/exceed their goals and produce results will receive the biggest payouts. The top tier is the individual rewards and recognition. A company committed to paying for performance will pay special attention to giving spot rewards (monetary or non momentary) to those who go above and beyond.
- PAIGE Another trend of 2106 was that people are more aware of and thereby more competitive to the market.
- PAIGE In general we’re seeing a greater overall awareness of the market which goes hand-in-hand with increased competition for talent. For example, the Bureau of Labor Statistics showed that there is extremely low unemployment for 25+ college-educated Americans. So if that’s talent you’re going after, you’re clearly not the only one and most likely, that talent is already employed so you’re definitely competing for them. Additionally we’re seeing a lot more of premium pay not just for hot *job* but actually for hot *skills* now! On top of that, some skills cost a lot of money – companies are forced to pay a premium for some skills in some market … for example Scala, which results in a 29% pay boost for that one skill alone (accd to payscale data)! And – people will leave. Our data shows that 60% of people who feel underpaid (whether they actually are compared to the market or not), intend to leave. They’re always looking now (people get offers to get an increase at their current place – more common) Skills are getting more transferrable, partly driven by a highly mobile
- PAIGE SO – there is an identified need to pay fairly to the market and even more importantly, to communicate that to employees. Because of the more competitive market, people are using data to make smart decisions. So the summary takeaway is if you’re not using market data to make your decisions already, you better start. And, your employees already are.
- PAIGE And since we’re talking about paying fairly to the market, I want to touch briefly on the idea that fair doesn’t necessarily mean equal. This is where your comp strategy really comes into play. What are you trying to reward? How do you plan to use compensation to get you there. Decide what’s important to your org and reward based on that. Engineers v accountants want different mix of pay, but you can still differentiate pay fairly based on what you’re driven by as an organization. Fairness is rooted in consistency, not in a specific pay rate.
- JENNI I think it’s important to note here that you can’t really be transparency if you haven’t done your homework in some of the other areas we discussed. If you haven’t worked out compliance issues, if you have been thoughtful regarding your mix of pay or performance management practice, or if you haven’t benchmarked your company’s pay practices against the market, then you will want to check those items off your list before you consider sharing details with your employees. Communicating about pay is as important as the plans you have around pay administration. You really only have one opportunity to get the messaging right – it’s a lot harder to go back once word is out and employees are talking. So make sure you have your ducks in a row before developing any comp communication plans.
- JENNI Another statistic taken from our 2016 Compensation Best Practices Report. We identified companies as “top performing” if they exceeded their revenue goals for 2015 and are considered a leader in their industry. In the report we found a lot of differences in comp behavior between top performing companies vs. others. So there is a lot of buzz in the compensation world regarding pay transparency. We’ve seen everything from employer driven initiatives (like those at Buffer) to employees taking things into their own hands and posting pay information in spreadsheets online (like at Google). The lesson? Employees increasingly expect higher levels of transparency around pay from their employers. One of PayScale’s clients, a meal delivery service in San Francisco, has taken pay transparency to heart and presented their “radical transparency” process during our 2016 Compference. For this company, sharing details about how and why employees are paid what they’re paid was a perfect extension of their core values. Sharing what everyone is paid may not be the right move for everyone, but it’s important for every company to consider where they fall on the transparency spectrum.
- JENNI Here we show PayScale’s transparency spectrum. The key things I want to point out when it comes to transparency are; Not an on-and-off switch. It’s not “we are transparent” or “we’re not.” There are varying levels of transparency and it’s important to think about where your company fits on the spectrum. Where are you now? Where do you want to be? What will you need to make the transition to higher transparency, if that’s where you want to go? Ultimately, the choice you make should be based on your company culture, your talent strategy, what you hope to achieve with your compensation plan. For PayScale, we consider “being transparent” to be anything above #3 or Where on this spectrum. And we recognize the goal isn’t to get every company to #5 – to the Whoa! Level. We think sharing some information helps to foster trust and engagement with employees, but again, sharing everything may not be the right move for you. Remember, you can be transparent about more than just salaries. You can share details about your market study or your company’s compensation philosophy without sharing a lot about pay and pay ranges. Any type of information shared moves you toward improved retention and motivation from your employees. And before we move on, as I said earlier, once you decide how transparent you want to be about pay – make sure your mangers know and are consistently sharing information. Inconsistent communication can derail the best laid compensation plans, so don’t forget that important step and educate your managers on what they can and why it’s so important to maintain uniformity.
- JENNI Research backs up what we’ve been talking about regarding employee engagement and pay transparency. 82% of employees feel ok about low pay, as long as the rationale is explained, But most people don’t actually know if they’re paid fairly. In fact 80% of people actually paid above market think they’re being paid at or below market. There is a missed opportunity here. In the absence of information, people will assume they’re paid low. So take the opportunity to share information with employees so they’re aware of why they’re paid what they’re paid. In fact, I encourage my clients to invest time in training their managers to have better conversations with employees about pay. According to CEB, three-fourths of conversations about pay happen between managers and employees. And yet…only 17% of companies are confident enough in their managers’ ability to have those tough conversations about pay. Your managers are your eyes and ears, especially when it comes to sentiment about pay. Managers need to be able to communicate the why and rationale behind pay decisions, which they can’t do if you either don’t know or haven’t explained to them yet. So these conversations between manager and employee are going to happen – you can improve employee perception of pay by educating and empowering your managers.
- PAIGE So we’ve talked about a number of trends today and you might be thinking, should we hop on that train? Is it right for my org? You’ll want to Consider workforce, readiness, values, budget, etc. “best practice” isn’t always best.
- PAIGE In Black and White – no mincing words.
- PAIGE Think about the make-up of your workforce and what will motivate them. It’s not all about generation, but that’s an easy thing to pick on. Digging a little further into the different generations and how they’re likely to want to approach pay and the workplace in general: Boomers – private, longer tenures – although some may be abbreviating more now, self-driven w/a high work ethic. Focus on retirement Gen X – semi-private – really the sandwiched generation, medium tenures, more distrustful of companies (watched retirement/pension go away, recession, etc), self-reliant with a focus on Management Millennials – public – internet. Facebook, etc. Interesting: first millennials turning 40 in 2020. Not entry level. Tend to have shorter tenures. Emphasis on fairness and values. Focus on advancement. Gen Z – still defining but early info shows that they’re more private than Millennials… think snapchat vs permanent online records. So far in school they show up as realistic, tech natives, and learning with a purpose (vs learning to learn) – results focus We did drop Traditionalist off because…we know what they’re about, they’ve been around for awhile
- JENNI So what’s the make-up of your workforce now? Consider where you might be at 5-years from now. It’s likely that millennials will be the dominant group in the workforce for a while. So consider what motivates them and how you can shape your pay practices to engage those important segments of your workforce.
- JENNI Your pay structure may vary in terms of your mix of compensation – some companies are more top heavy with variable pay, incentives, individualized rewards and recognition than they are with base pay. There are a lot of factors that can influence how much you put into each layer. Such as…
- JENNI Your organization culture and your values Consider your workforce preferences – again, what’s the makeup of your workforce and what type of compensation motivates and engages them most Are their norms in your industry or in your region that if you ignore may put you at a market disadvantage? You mix of pay might even vary by job level or function – this is already pretty common when you consider compensation plans for sales jobs vs. others And don’t forget to consider where your company is at in its growth cycle --- are you a startup? Still growing? Mature company? That may impact how you design your mix of pay. Whatever your mix, make sure you have a good reason for the way you set things up, tailor that mix to your workforce, and being consistent in your application.
- PAIGE
- PAIGE - Likely to see less regulatory stuff at the federal level, and may see some roll-backs of some things that have come up - still kind of TBD so pay attention, we’ll do our best to keep people posted - If things shift to state-level, we may actually see more emphasis on a strong market-based comp system. More emphasis on market competition vs compliance – especially for multi-state orgs.
- PAIGE So yes, plan on seeing all these topics again next year
- JENNI So what can you do today? First off, celebrate! A lot has happened this year and any work you’ve done to make your company more compliant, update your pay mix, or improve performance management practices should be celebrated! Keep yourself informed and sign up for notifications from your local government regarding changes in legislation. For Washingtonians, check out Washington Employers. Folks in California can check out CalChamber. You can also be directly informed regarding action on the FLSA bill through congress.gov. Examine your performance practices and consider if they do, in fact, support your business goals and drive results Consider what information you’ve shared about pay thus far and whether pushing your company to share more may improve employee engagement and retention If you haven’t done so recently, do a market study. Check how your pay compares to market. And then, of course, evaluate your mix of pay. Conduct interviews with key internal stakeholders. Is the mix you have now working for your company?
- PAIGE/JENNI QUESTIONS