This document discusses the importance of developing an effective executive compensation strategy that considers the perspectives of key stakeholders. It begins by stating that while many companies articulate their compensation philosophies, they often fail to address the overall goals and how compensation will help achieve them. It then defines the differences between a compensation philosophy and strategy, with the strategy being the plan of action to execute the philosophy. The rest of the document outlines the different interests and concerns of the three main stakeholder groups - investors, the company, and executives - that an effective compensation strategy should seek to address. These include concerns around shareholder value, governance, leadership, driving value creation, and enterprise sustainability. The strategy must clearly articulate its goals and how compensation will incentivize
As a business leader, you don’t want to get involved in pay minutia. It’s not your role and such details divert your focus from more critical priorities. However, setting a pay agenda that drives growth is a strategic issue that must have your full attention. Without your leadership, pay can become a costly nuisance that inhibits performance and drains profits.
VisionLink's article will give you a clear understanding of why and how you should guide the rewards approach your company takes. Turn pay into a strategic growth tool for your business!
While many companies have growth as a goal, most lack an effective strategy to achieve it. A successful growth strategy requires a different paradigm that establishes concrete growth targets and actively manages a program to meet them. There are five key elements to an effective growth strategy: developing prioritized growth options, executing those options through M&A or building new capabilities, optimizing acquired or built capabilities, ensuring sufficient growth capacity, and maintaining political will over time. However, growth strategies also carry risks at the strategic, execution, implementation, capability, and political levels that must be anticipated, planned for, and mitigated against to increase the likelihood of success.
This document discusses building an "advantaged portfolio" at the corporate level. It defines an advantaged portfolio as having three key characteristics: being strategically sound, value-creating, and resilient.
To be strategically sound, a portfolio must be competitively positioned in attractive industries and markets where the company can win, support a balanced portfolio of innovation initiatives, and create synergies across businesses.
To be value-creating, a portfolio must maximize intrinsic value as measured by discounted cash flows, address capital market valuation to ensure market value aligns with intrinsic value over time, and maximize the portfolio's value to potential other owners.
Finally, a resilient portfolio can withstand various scenarios in its industry and builds flexibility through
The document discusses the role of human resources in mergers and acquisitions. It begins by defining mergers and acquisitions as representing ultimate change for businesses that can be difficult and chaotic. It then provides statistics on M&A activity and discusses why understanding the process is important. The rest of the document outlines the M&A process and key roles for HR, including assessing cultural alignment, developing integration plans, managing communications, and ensuring retention of key employees.
Do You Know the Five Essentials of Pay for Performance - David Fisher, Thomas...Fulcrum Partners LLC
Every organization has goals to meet, stakeholders to satisfy and a strong need to continually attract and retain talent, all of which must be accomplished while carefully maintaining balances of short-term and long-term compensation and variable versus guaranteed reward. This article from David H. Fisher of Fulcrum Partners, LLC and Thomas E. Miller of The VisionLink Advisory Group covers the five essential keys of pay for performance.
This document discusses key concepts for strategic management including key success factors, competitive advantage, core competencies, profit margin, leadership, types of power, and cost efficiency. Key success factors refer to the elements required for an organization to meet its goals. Competitive advantage allows a company to outperform competitors through attributes like resources, quality, or pricing. Core competencies are skills that distinguish a firm and contribute significantly to customer benefits. Cost efficiency relates monetary inputs like spending to desired outcomes like increased sales.
This document discusses various efficiency theories for mergers and acquisitions. It outlines theories such as differential efficiency, inefficient management, synergy, pure diversification, and strategic realignment. It also discusses undervaluation as a factor for M&As. Additionally, it covers agency problems that can arise between managers and shareholders, and how acquisitions can help address these issues. Finally, it outlines the hubris hypothesis, where managers may commit errors of overoptimism when evaluating merger opportunities due to excessive pride.
As a business leader, you don’t want to get involved in pay minutia. It’s not your role and such details divert your focus from more critical priorities. However, setting a pay agenda that drives growth is a strategic issue that must have your full attention. Without your leadership, pay can become a costly nuisance that inhibits performance and drains profits.
VisionLink's article will give you a clear understanding of why and how you should guide the rewards approach your company takes. Turn pay into a strategic growth tool for your business!
While many companies have growth as a goal, most lack an effective strategy to achieve it. A successful growth strategy requires a different paradigm that establishes concrete growth targets and actively manages a program to meet them. There are five key elements to an effective growth strategy: developing prioritized growth options, executing those options through M&A or building new capabilities, optimizing acquired or built capabilities, ensuring sufficient growth capacity, and maintaining political will over time. However, growth strategies also carry risks at the strategic, execution, implementation, capability, and political levels that must be anticipated, planned for, and mitigated against to increase the likelihood of success.
This document discusses building an "advantaged portfolio" at the corporate level. It defines an advantaged portfolio as having three key characteristics: being strategically sound, value-creating, and resilient.
To be strategically sound, a portfolio must be competitively positioned in attractive industries and markets where the company can win, support a balanced portfolio of innovation initiatives, and create synergies across businesses.
To be value-creating, a portfolio must maximize intrinsic value as measured by discounted cash flows, address capital market valuation to ensure market value aligns with intrinsic value over time, and maximize the portfolio's value to potential other owners.
Finally, a resilient portfolio can withstand various scenarios in its industry and builds flexibility through
The document discusses the role of human resources in mergers and acquisitions. It begins by defining mergers and acquisitions as representing ultimate change for businesses that can be difficult and chaotic. It then provides statistics on M&A activity and discusses why understanding the process is important. The rest of the document outlines the M&A process and key roles for HR, including assessing cultural alignment, developing integration plans, managing communications, and ensuring retention of key employees.
Do You Know the Five Essentials of Pay for Performance - David Fisher, Thomas...Fulcrum Partners LLC
Every organization has goals to meet, stakeholders to satisfy and a strong need to continually attract and retain talent, all of which must be accomplished while carefully maintaining balances of short-term and long-term compensation and variable versus guaranteed reward. This article from David H. Fisher of Fulcrum Partners, LLC and Thomas E. Miller of The VisionLink Advisory Group covers the five essential keys of pay for performance.
This document discusses key concepts for strategic management including key success factors, competitive advantage, core competencies, profit margin, leadership, types of power, and cost efficiency. Key success factors refer to the elements required for an organization to meet its goals. Competitive advantage allows a company to outperform competitors through attributes like resources, quality, or pricing. Core competencies are skills that distinguish a firm and contribute significantly to customer benefits. Cost efficiency relates monetary inputs like spending to desired outcomes like increased sales.
This document discusses various efficiency theories for mergers and acquisitions. It outlines theories such as differential efficiency, inefficient management, synergy, pure diversification, and strategic realignment. It also discusses undervaluation as a factor for M&As. Additionally, it covers agency problems that can arise between managers and shareholders, and how acquisitions can help address these issues. Finally, it outlines the hubris hypothesis, where managers may commit errors of overoptimism when evaluating merger opportunities due to excessive pride.
This document discusses strategic management concepts including strategy formation at the corporate, business unit, and functional levels. It defines strategy and explains that corporate strategy is concerned with the selection and coordination of businesses a company competes in. Business unit strategy focuses on developing competitive advantage within product/service lines. Functional strategy involves coordinating resources to execute business unit strategies. The strategic management process involves environmental scanning, strategy formulation, implementation, and evaluation. Stakeholders in a business include shareholders, creditors, managers, employees, suppliers, customers, community and government. Vision and mission statements provide direction for organizational goals, while objectives and goals specify targets to achieve the vision and mission.
How do you know whether your company’s pay strategy is successful? It’s a simple question but most company leaders struggle to find an adequate answer.
The reason the question is so difficult is because compensation is seldom considered a strategic issue. It’s considered a cost issue. Therefore, it is designed without the success measures most strategic initiatives carry.
So how do you determine a measure that best defines success when it comes to compensation? If you are struggling to determine whether your pay strategy is successful, you won’t want to miss this valuable presentation.
View the webinar recording online at: http://www.vladvisors.com/compensation-knowledge-center/webinars/what-is-a-successful-pay-strategy
The document discusses some common reasons why mergers and acquisitions often fail. It provides examples of mergers that failed, including HLL-TOMCO due to differences in valuation techniques, Jet-Sahara due to overvaluation and lack of a robust business model, and Glaxo-Wellcome-Burroughs due to high pay differentials between workers causing integration issues. It then lists some common sins that can cause M&A to fail, such as lacking clear guiding principles, ground rules, stakeholder communication, aggressive synergy targets, and cultural integration plans.
The Role of Rewards in the “New Age” of Employee Empowerment. So where does compensation fit in this new engagement environment? Does it play any role? Some analysis suggests its impact is minimal. Other studies indicate it is a larger factor. To the extent attrition can be considered the antithesis of engagement, one might be confused by what seems to be conflicting data analyses among researchers regarding the influence compensation has on this much sought after quality in employees. If these are questions you are trying to answer, you should not miss this presentation.
DOs & DON'Ts of Short-Term Incentive Compensation PlansCBIZ, Inc.
Motivating workers is critical to corporate success. Organizations across the country are seeking to continuously improve employee performance, while simultaneously controlling costs. Establishing or expanding incentive compensation programs can be an effective strategy to achieve this objective.
human resource in merger and acquisitionsKushal Shah
The Human Resource (HR) department plays a pivotal role in the process of merger and acquisition between two companies. ... Thus, HR plays a key role in managing all crises as well as disputes that may crop up in an organization, as and when the process of merger and acquisition sets off.
The document discusses various techniques for measuring business performance, including the balanced scorecard, activity-based management, risk analysis, and talent management. It emphasizes that measuring performance allows businesses to know if strategies are working, identify areas for improvement, and set goals. Regular measurement and comparing results to peers can help businesses anticipate changes, develop solutions to grow, and continually improve their performance.
The document discusses HR issues in mergers and acquisitions. It defines mergers as occurring between equal-sized organizations that unite under a new entity, while acquisitions involve a large company purchasing a smaller one. Mergers can be horizontal between similar industries, vertical between different production stages, or conglomerate between unrelated industries. Successful M&As require retaining key talent, effective communication, executive retention, and cultural integration. Cultural and people issues like composition of boards, job placements, culture integration, and talent retention are also important factors that impact cross-border M&A deals.
The document discusses strategic management concepts for a private dialysis service provider. It covers strategic planning, linking strategic and operational levels, performance management, growth options, and managing in a competitive environment. Key points discussed include having a strategic focus to guide long-term decisions, analyzing the external environment and internal resources, identifying strategic options, understanding who the different customers are for private clinics versus state-run services, and selecting strategies and making decisions to satisfy all stakeholders.
Aligning your compensation philosophy with business prioritiesPayScale, Inc.
As an HR leader, you play a key role in your organization's success. It's crucial that you work with your company's executive leaders to develop a compensation strategy that supports company business objectives.
In this free, one hour webinar session, Stacey Carroll, SPHR, MBA will present the basics of leading an organization through the steps to align its compensation philosophy with its mission, and values. This webinar will give you a core understanding of the connection between business and compensation strategy.
This document provides an overview of mergers and acquisitions (M&A) and common HR challenges. It discusses the basic concepts of M&A, including definitions of mergers and acquisitions. It also outlines reasons for M&A such as gaining synergies through reduced costs and expanded market access. Additionally, it describes the overall M&A process in five phases from pre-acquisition review to post-acquisition integration. HR challenges can arise during M&A from changes in company culture, leadership, and redundancy of roles which must be carefully managed.
This document discusses strategic human resource management (SHRM) and the role of human resources as a strategic business partner. It provides definitions of SHRM, outlines four perspectives on SHRM activities and themes, and describes models of the evolution of HR roles from administrative experts to strategic partners. The document emphasizes that effective HRM is key to competitiveness and that people and processes within an organization are a source of sustained competitive advantage. It argues that HR leaders should participate directly in strategy formulation, ensure people issues are addressed as part of business strategies, and align HR strategies and processes to enable the implementation of business strategies.
This document discusses how reducing payroll expenses through cuts is often a short-sighted approach that sacrifices long-term productivity. While payroll cuts may improve short-term profits, they damage productivity over time by requiring employees to do more with less. Instead, companies should view workers as strategic investments and focus on improving quality of work through training, incentives, and ensuring the right people are in the right jobs. The areas of payroll investment with the highest returns are training and incentives.
The document discusses mergers and acquisitions and the role of human resources in the process. It defines mergers and acquisitions as combinations of companies that unite them under one new company. Some key reasons for mergers and acquisitions include synergies, diversification, growth, and eliminating competition. The document outlines HR's important role in ensuring a successful integration, such as composing the new board, deciding job placements, assessing company culture, effective communication, and retaining talent. It also discusses potential benefits like accessing new markets, skills, and assets, but notes mergers can increase costs and damage brands if not implemented properly.
Managing hr during mergers &; acquisitionsAnushka Kapoor
The document discusses various HR challenges faced during mergers and acquisitions (M&A). It notes that improper handling of HR issues is a major reason M&As fail. When Tech Mahindra acquired Satyam, the HR department faced challenges in retaining employees and restoring faith in the company. Initiatives included a sales reboot campaign, special induction programs, recognition schemes, and improved communication channels to address issues arising from job uncertainty, culture changes, and the Satyam scandal.
HR can play a role in mergers and acquisitionsNetZealous LLC
HR is the organization’s facilitator, carrying out a wide variety of tasks that lubricate all the processes the organization carries out. It can play a supporting cast in a number of areas. M & A is one of the main activities that HR can support. HR can involve itself with the M & A process at the time of initiation. It can consult management and be a part of the discussion at the estimation change. While bargaining on the deal may be a management issue in which HR may have an ancillary role; HR has a lot to contribute when it comes to preparing the organization for a lot of work that needs to accompany M & A. It can handle all the people-related aspects of HR. The following are some of the areas in which HR can play a very important role in a merger or acquisition.
Essentials of Mergers, Acquisitions and Joint VenturesLynn Schuster
This document discusses the role of human resources in mergers, acquisitions, and joint ventures. It defines each type of strategic option and outlines the challenges that can lead to high failure rates. The document states that HR can increase the likelihood of success by focusing on the people aspects during the five common phases: discovery, due diligence, agreement and announcement, integration, and sustainable performance. It provides an overview of dos and don'ts for HR to enable successful mergers, acquisitions, and joint ventures. Finally, it includes a case study to illustrate how an HR professional can address people-related challenges that arise.
The document discusses strategic management tools including the GE/McKinsey matrix, which analyzes a company's business portfolio based on industry attractiveness and business unit strength. It explains how to calculate these factors and provides an example analysis of Apple Inc. The matrix is useful but also has limitations as it does not account for relationships between units or core competencies.
This document summarizes a journal article about addressing human resource issues in mergers and acquisitions. It begins by noting that while M&As are increasingly used for growth, most fail to achieve their goals due to neglected HR issues. It then presents a three-stage model for systematically addressing HR throughout the M&A process. Key points include identifying HR issues in pre-acquisition, post-acquisition integration, and post-integration stages. Attention to cultural differences, talent retention, and clear communication are highlighted as especially important for M&A success. The role of HR professionals in guiding a people-focused approach is also discussed.
Tie Compensation Strategy to general business strategyBurhan Sheikh
The document discusses aligning compensation strategy with business strategy. It states that compensation strategy should support the implementation of HR strategy and building of a high-performance culture. Compensation is one HR tool that should not be isolated but should align with overall goals and strategies. Aligning compensation strategy ensures pay policies help determine internal structure, support a high-performance culture, allow smooth HR processes, and communicate that employees are valued. The conclusion emphasizes that compensation alone does not achieve objectives and must be aligned with strategic planning.
Age of Alignment: Linking Compensation & Business StrategyPearl Meyer
We’ve entered a new era, with evolving responsibilities for the Board of Directors. Today, the “review and concur” role is no longer sufficient. This is true from a regulatory and compliance perspective, and it’s also true as companies must be prepared for the challenge of fast, frequent, and often disruptive market forces. Recently, the NACD released its Blue Ribbon Commission report on Strategy Development. Among many important findings and recommendations, it states that providing necessary strategic direction requires a new level of ongoing Board engagement. A key question posed for Boards to evaluate their processes is “Does our incentive structure reinforce or unintentionally undermine the chosen strategy?”
Today, our discussion will be lead by two members of the Blue Ribbon Commission. Greg Lau, of RSR Partners and a member of the Board of NACD, as well as Steven Van Putten, managing director and office head from Pearl Meyer & Partners’ Boston location. We will also be joined by consultant Michael Ng from Pearl Meyer and Partners.
This document discusses strategic management concepts including strategy formation at the corporate, business unit, and functional levels. It defines strategy and explains that corporate strategy is concerned with the selection and coordination of businesses a company competes in. Business unit strategy focuses on developing competitive advantage within product/service lines. Functional strategy involves coordinating resources to execute business unit strategies. The strategic management process involves environmental scanning, strategy formulation, implementation, and evaluation. Stakeholders in a business include shareholders, creditors, managers, employees, suppliers, customers, community and government. Vision and mission statements provide direction for organizational goals, while objectives and goals specify targets to achieve the vision and mission.
How do you know whether your company’s pay strategy is successful? It’s a simple question but most company leaders struggle to find an adequate answer.
The reason the question is so difficult is because compensation is seldom considered a strategic issue. It’s considered a cost issue. Therefore, it is designed without the success measures most strategic initiatives carry.
So how do you determine a measure that best defines success when it comes to compensation? If you are struggling to determine whether your pay strategy is successful, you won’t want to miss this valuable presentation.
View the webinar recording online at: http://www.vladvisors.com/compensation-knowledge-center/webinars/what-is-a-successful-pay-strategy
The document discusses some common reasons why mergers and acquisitions often fail. It provides examples of mergers that failed, including HLL-TOMCO due to differences in valuation techniques, Jet-Sahara due to overvaluation and lack of a robust business model, and Glaxo-Wellcome-Burroughs due to high pay differentials between workers causing integration issues. It then lists some common sins that can cause M&A to fail, such as lacking clear guiding principles, ground rules, stakeholder communication, aggressive synergy targets, and cultural integration plans.
The Role of Rewards in the “New Age” of Employee Empowerment. So where does compensation fit in this new engagement environment? Does it play any role? Some analysis suggests its impact is minimal. Other studies indicate it is a larger factor. To the extent attrition can be considered the antithesis of engagement, one might be confused by what seems to be conflicting data analyses among researchers regarding the influence compensation has on this much sought after quality in employees. If these are questions you are trying to answer, you should not miss this presentation.
DOs & DON'Ts of Short-Term Incentive Compensation PlansCBIZ, Inc.
Motivating workers is critical to corporate success. Organizations across the country are seeking to continuously improve employee performance, while simultaneously controlling costs. Establishing or expanding incentive compensation programs can be an effective strategy to achieve this objective.
human resource in merger and acquisitionsKushal Shah
The Human Resource (HR) department plays a pivotal role in the process of merger and acquisition between two companies. ... Thus, HR plays a key role in managing all crises as well as disputes that may crop up in an organization, as and when the process of merger and acquisition sets off.
The document discusses various techniques for measuring business performance, including the balanced scorecard, activity-based management, risk analysis, and talent management. It emphasizes that measuring performance allows businesses to know if strategies are working, identify areas for improvement, and set goals. Regular measurement and comparing results to peers can help businesses anticipate changes, develop solutions to grow, and continually improve their performance.
The document discusses HR issues in mergers and acquisitions. It defines mergers as occurring between equal-sized organizations that unite under a new entity, while acquisitions involve a large company purchasing a smaller one. Mergers can be horizontal between similar industries, vertical between different production stages, or conglomerate between unrelated industries. Successful M&As require retaining key talent, effective communication, executive retention, and cultural integration. Cultural and people issues like composition of boards, job placements, culture integration, and talent retention are also important factors that impact cross-border M&A deals.
The document discusses strategic management concepts for a private dialysis service provider. It covers strategic planning, linking strategic and operational levels, performance management, growth options, and managing in a competitive environment. Key points discussed include having a strategic focus to guide long-term decisions, analyzing the external environment and internal resources, identifying strategic options, understanding who the different customers are for private clinics versus state-run services, and selecting strategies and making decisions to satisfy all stakeholders.
Aligning your compensation philosophy with business prioritiesPayScale, Inc.
As an HR leader, you play a key role in your organization's success. It's crucial that you work with your company's executive leaders to develop a compensation strategy that supports company business objectives.
In this free, one hour webinar session, Stacey Carroll, SPHR, MBA will present the basics of leading an organization through the steps to align its compensation philosophy with its mission, and values. This webinar will give you a core understanding of the connection between business and compensation strategy.
This document provides an overview of mergers and acquisitions (M&A) and common HR challenges. It discusses the basic concepts of M&A, including definitions of mergers and acquisitions. It also outlines reasons for M&A such as gaining synergies through reduced costs and expanded market access. Additionally, it describes the overall M&A process in five phases from pre-acquisition review to post-acquisition integration. HR challenges can arise during M&A from changes in company culture, leadership, and redundancy of roles which must be carefully managed.
This document discusses strategic human resource management (SHRM) and the role of human resources as a strategic business partner. It provides definitions of SHRM, outlines four perspectives on SHRM activities and themes, and describes models of the evolution of HR roles from administrative experts to strategic partners. The document emphasizes that effective HRM is key to competitiveness and that people and processes within an organization are a source of sustained competitive advantage. It argues that HR leaders should participate directly in strategy formulation, ensure people issues are addressed as part of business strategies, and align HR strategies and processes to enable the implementation of business strategies.
This document discusses how reducing payroll expenses through cuts is often a short-sighted approach that sacrifices long-term productivity. While payroll cuts may improve short-term profits, they damage productivity over time by requiring employees to do more with less. Instead, companies should view workers as strategic investments and focus on improving quality of work through training, incentives, and ensuring the right people are in the right jobs. The areas of payroll investment with the highest returns are training and incentives.
The document discusses mergers and acquisitions and the role of human resources in the process. It defines mergers and acquisitions as combinations of companies that unite them under one new company. Some key reasons for mergers and acquisitions include synergies, diversification, growth, and eliminating competition. The document outlines HR's important role in ensuring a successful integration, such as composing the new board, deciding job placements, assessing company culture, effective communication, and retaining talent. It also discusses potential benefits like accessing new markets, skills, and assets, but notes mergers can increase costs and damage brands if not implemented properly.
Managing hr during mergers &; acquisitionsAnushka Kapoor
The document discusses various HR challenges faced during mergers and acquisitions (M&A). It notes that improper handling of HR issues is a major reason M&As fail. When Tech Mahindra acquired Satyam, the HR department faced challenges in retaining employees and restoring faith in the company. Initiatives included a sales reboot campaign, special induction programs, recognition schemes, and improved communication channels to address issues arising from job uncertainty, culture changes, and the Satyam scandal.
HR can play a role in mergers and acquisitionsNetZealous LLC
HR is the organization’s facilitator, carrying out a wide variety of tasks that lubricate all the processes the organization carries out. It can play a supporting cast in a number of areas. M & A is one of the main activities that HR can support. HR can involve itself with the M & A process at the time of initiation. It can consult management and be a part of the discussion at the estimation change. While bargaining on the deal may be a management issue in which HR may have an ancillary role; HR has a lot to contribute when it comes to preparing the organization for a lot of work that needs to accompany M & A. It can handle all the people-related aspects of HR. The following are some of the areas in which HR can play a very important role in a merger or acquisition.
Essentials of Mergers, Acquisitions and Joint VenturesLynn Schuster
This document discusses the role of human resources in mergers, acquisitions, and joint ventures. It defines each type of strategic option and outlines the challenges that can lead to high failure rates. The document states that HR can increase the likelihood of success by focusing on the people aspects during the five common phases: discovery, due diligence, agreement and announcement, integration, and sustainable performance. It provides an overview of dos and don'ts for HR to enable successful mergers, acquisitions, and joint ventures. Finally, it includes a case study to illustrate how an HR professional can address people-related challenges that arise.
The document discusses strategic management tools including the GE/McKinsey matrix, which analyzes a company's business portfolio based on industry attractiveness and business unit strength. It explains how to calculate these factors and provides an example analysis of Apple Inc. The matrix is useful but also has limitations as it does not account for relationships between units or core competencies.
This document summarizes a journal article about addressing human resource issues in mergers and acquisitions. It begins by noting that while M&As are increasingly used for growth, most fail to achieve their goals due to neglected HR issues. It then presents a three-stage model for systematically addressing HR throughout the M&A process. Key points include identifying HR issues in pre-acquisition, post-acquisition integration, and post-integration stages. Attention to cultural differences, talent retention, and clear communication are highlighted as especially important for M&A success. The role of HR professionals in guiding a people-focused approach is also discussed.
Tie Compensation Strategy to general business strategyBurhan Sheikh
The document discusses aligning compensation strategy with business strategy. It states that compensation strategy should support the implementation of HR strategy and building of a high-performance culture. Compensation is one HR tool that should not be isolated but should align with overall goals and strategies. Aligning compensation strategy ensures pay policies help determine internal structure, support a high-performance culture, allow smooth HR processes, and communicate that employees are valued. The conclusion emphasizes that compensation alone does not achieve objectives and must be aligned with strategic planning.
Age of Alignment: Linking Compensation & Business StrategyPearl Meyer
We’ve entered a new era, with evolving responsibilities for the Board of Directors. Today, the “review and concur” role is no longer sufficient. This is true from a regulatory and compliance perspective, and it’s also true as companies must be prepared for the challenge of fast, frequent, and often disruptive market forces. Recently, the NACD released its Blue Ribbon Commission report on Strategy Development. Among many important findings and recommendations, it states that providing necessary strategic direction requires a new level of ongoing Board engagement. A key question posed for Boards to evaluate their processes is “Does our incentive structure reinforce or unintentionally undermine the chosen strategy?”
Today, our discussion will be lead by two members of the Blue Ribbon Commission. Greg Lau, of RSR Partners and a member of the Board of NACD, as well as Steven Van Putten, managing director and office head from Pearl Meyer & Partners’ Boston location. We will also be joined by consultant Michael Ng from Pearl Meyer and Partners.
Creating a Highly Functional HR DepartmentPayScale, Inc.
HR functions have evolved from the personnel departments of the 70’s and 80’s to the business partnerships and people functions of today. The strategic value that HR brings to an organization can vary greatly depending on the size of the organization, industry, location, core values, culture, and more.
Join PayScale’s Stacey Klimek, VP of People, and Mykkah Herner, Director of Professional Services, as they discuss tips for creating a highly functional HR department in your organization.
Laying the Foundation for Your Compensation StrategyPayScale, Inc.
Top companies have clear compensation strategies. They connect their reward system directly to their business outcomes.
Do you have a compensation strategy that is in line with your business objectives and does your leadership support it?
Sylvia Doyle gave a presentation on developing an effective reward strategy. She discussed why reward strategies often fail to deliver, the importance of stakeholder involvement, and a 4 phase process for developing a strategy that includes diagnosis, design, testing, and implementation. The goal is to create a strategy aligned with organizational culture and goals to incentivize the desired behaviors and outcomes.
Building a Compensation Plan Part 3: Implementing Your Total Rewards Plan PayScale, Inc.
Building a compensation plan… easy. Making it work for the organization . . . . . not so easy.
It’s true that the most difficult part of any major HR project is the implementation, and when building a compensation plan it’s no different.
In this webinar, we’ll talk about how to develop an effective implementation plan, including:
Get an implementation plan approved by senior leadership with appropriate budget allocation
Think through one-time vs. multi-year rollout approaches
Develop a communication strategy tailored to employee, managers and leaders.
Building a Compensation Plan Part 1: Strategy & Executive SupportPayScale, Inc.
Your compensation strategy is the cornerstone of an effective compensation plan, and without one you’ll face more difficulty and opposition when it comes time to implement your plan. By investing time in defining your compensation strategy you’ll increase the likelihood of gaining executive support for your compensation plan as well.
Join us for part one of Building a Compensation Plan and learn:
Why a compensation strategy is so critical
The three questions that help define your compensation strategy
How to get senior leadership involved in your plan.
You’ll walk away from this session with crucial knowledge of how to build a foundation under your compensation strategy that supports business priorities and gets your executive team on board. Skip step one at your own peril.
Building a Compensation Plan Part 2: Develop a Market-Based Pay StructurePayScale, Inc.
This document discusses developing a market-based pay structure. It covers selecting market salary survey data, applying compensation philosophy to the data, choosing benchmark jobs, aging and weighting data sources, determining pay grades, and building salary ranges with minimums and maximums. The goal is to establish competitive pay ranges using objective market data.
The compensation strategy is the essential strategy for the business, which wants to eliminate the external competition from attacking the top talents. The company has to define its position on the job market, it has to identify bene
10 Easy Ways to Unleash Your Kid's Brain PowerSage HR
Do you know that a baby is born with all the brain cells he needs when he becomes an adult?
Do you know that a baby creates 700 neural connections every second in the first 1,000 days of his life?
A study conducted by Dr. Jim Heckman, a Nobel Laureate in Economics, show that early stimulation of brain function during childhood plays a critical role in a child's social and economic success. Furthermore, the neural pathways and networks that are forged during the first 1,000 days will have lasting impacts on the person's social, emotional and mental capabilities --- very important factors which dictate the kind of lifestyle, job and social interactions he will have in the future.
For parents who want nothing but the best for their children, Dr. Heckman's research show that preschool experiences and early interactions with peers and adults provide the highest return in capital investment. The benefits of which decreases dramatically after school due to aging and several other reasons.
From an economic standpoint, these words ring true. Early childhood stimulation of brain function develops fluid abilities such as memory, reasoning, speed of thought and problem solving prowess. All of which are interrelated and foreshadows high-level brain function which is key to a happy, successful life.
In this Slideshare story deck, CakeHR is proud to present 10 easy, practical ways to develop your kid's brain power. Here you will learn about the importance of play, songs and interactive toys in early childhood brain stimulation. You will also learn that the way your respond to your child's needs and cries will have a direct effect on the development of his cognitive and emotional abilities.
Learn more about CakeHR at > > > cake.hr
This document outlines the steps involved in developing a market-based pay structure from scratch. It discusses gathering background information like compensation philosophy, market data, job descriptions and employee data. It emphasizes defining the compensation philosophy and gaining management buy-in. It also covers selecting appropriate market salary surveys, ensuring quality data, and linking the data sources to the organization's compensation philosophy.
Human Capital (September 2010) Reap What You Sow-ROI On RewardSimran Oberoi
1) Measuring return on investment (ROI) for reward programs is important for companies to maximize their reward spending and ensure it aligns with business objectives. Key aspects that impact ROI include variable pay, benefits, differentiated rewards for top performers, and performance metrics.
2) To properly measure ROI, companies must define investment as total remuneration costs and benchmark outcomes against business goals. They should also examine performance metrics and ensure a balance of financial and non-financial metrics are used.
3) Engaging and enabling top talent is critical for companies to achieve higher ROI. Companies that engage and enable employees outperform peers on financial metrics. Changing systems and processes to remove barriers is important to allow employees to succeed.
BIZGrowth Strategies - Back to Basics Special EditionCBIZ, Inc.
Amid the increasing complexity of today’s business landscape, it can be of great benefit to shut out the noise and simply get back to the basics. Summer offers the rare opportunity for organizations to slow down and sweat the small stuff.
In this issue, our experts address seven key topics intended to help leaders guide their teams to stability and refocus on the foundational elements of success, including:
- Talent Management 101: How to Attract & Retain Great Employees
- Exploring the What, Why & How Behind the Employee Experience
- The Shifting Normal: 3 Ways Leaders Can Embrace Change & Conquer Challenge
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3. 26 | workspan july 2015
While many of these statements are
well articulated, more often than not
they represent a missed opportunity.
They state how the executive compen-
sation program is structured and how
it compares with the market, but
they generally don’t address the end
game — like the desired objectives
of the compensation program. They
state what the executive compensation
program is, but not where it is going
or the role that it plays in getting
there; for example, they don’t specifi-
cally say what is the desired state and
how does the executive compensation
program help to get there.
Companies often use “compensa-
tion philosophy” and “compensation
strategy” interchangeably. However,
they are actually two different
concepts that work hand in hand. It’s
unlikely that a compensation philos-
ophy will be successful without being
anchored to a strategy — a plan of
action or policy designed to achieve
the overall desired state. At the same
time, a compensation strategy is not
likely to be successful unless it’s
guided by a philosophy — a system
of principles, beliefs, values or tenets
that guide practical affairs.
SHRM, a leading authority in
compensation matters, states in its
2012 paper “Planning and Design:
What is a compensation philosophy?”
that “a compensation philosophy
is simply a formal statement docu-
menting the company’s position about
employee compensation.” Human
Resource Management (HRM) Guide
provides an online repository to help
human resource professionals “bridge
the gap between theory and prac-
tice.” Its online database describes a
compensation strategy in much the
same way, stating that “the compensa-
tion strategy is derived from the HR
Strategy and it defines the position of
the organization on the job market.”
It defines the pay market, the desired
position on the pay market, and how
the desired level and position will
be achieved. While there’s truth in
the statements from both of these
sources, a compensation philosophy
and strategy are actually much
more than that.
Properly constructed, a compensa-
tion philosophy and strategy will
serve as a guide for all compen-
sation-related decisions that are
made by the company or its board
of directors. But many of these
general statements are ultimately
ineffective having an impact on the
company’s ability to achieve long-
term, sustainable success through an
effective compensation program.
In stating the purpose of their
compensation programs, companies
will often list the following attributes:
❙❙ Attract, motivate and retain
qualified executives
❙❙ Be competitive with the market
❙❙ Pay for performance
❙❙ Target the median (75th
percentile,
etc.) based on performance
Figure 1 | Constituents have different interests, but shared concerns
Return
Governance
Marketability
Leadership
Driving Value
Sustainability
Cash Flow/Liquidity
Career
Wealth Creation
Companies often use “compensation philosophy”
and “compensation strategy” interchangeably.
However, they are actually two different concepts
that work hand in hand.
COM
PENSATION PHILOS
OPY
CO
M
PENSATION STRAT
EGY
4. | 27july 2015 workspan
❙❙ Align executives
with shareholder interests.
These are all worthwhile, but they’re
general and speak to tactics rather than
philosophy and the strategy to execute
that philosophy; they don’t clearly artic-
ulate what the strategy is and where it
leads. They do not tell you what the
purpose (desired state) is. They also
do not tell you how the elements of
compensation help to reach the desired
state. Finally, they do not tell you
why the desired state is important.
For an executive compensation
strategy to be effective, it must
disclose a complete narrative, taking
us from “What” to “How” to “Why.”
Required is an understanding
of the perspectives of its three
primary constituencies, because
each has its own unique interests
and desired outcomes. These
constituencies include:
❙❙ Investors, including shareholders
❙❙ Company
❙❙ Executives
(See Figure 1.)
Investors
Investors and, in the case of publicly
traded companies, shareholders make
a significant, direct financial invest-
ment in the company. This investment
is essential to the company’s ongoing
operations. These investors expect
a return on that investment. A
compensation strategy should address
three primary concerns and interests
for investors:
❙❙ Share price appreciation/value
creation: Each investor has a
different reason for investing and a
different exit strategy. A shareholder
may be taking a short-term or long-
term position (renters vs. owners).
Depending on the time line for the
shareholders in a publicly traded
company, they may be looking for a
rapid increase in the share price or
a more gradual longer-term curve,
perhaps supported by a dividend
stream. In the case of a privately held
company, investors may measure
the value of their investment by
appreciation in enterprise value.
❙❙ Good governance: Investors and
shareholders want to ensure that
the company is well run so that
their investment will be protected.
This requires a qualified manage-
ment team, a focus of sustained
performance and an appropriate
balance between risk and growth.
This can be best achieved by
putting their money into a well-
run company that meets the strict
standards of good governance.
❙❙ Marketability: Every investor has
an exit strategy. It may be long
term (e.g., Warren Buffett) or short
term (e.g., private equity). Investors
may be focused on creating value
to maximize value at a transaction.
Shareholders may look to time-sell
their stock to maximize value. In
either case, they also want to be
sure that, when they are ready
to exit, there’s a market that will
provide a timely and appropriate
return on their investment.
Company
The company makes a substantial
investment in people, in the form of
the total compensation provided to
its executives, and looks for a corre-
sponding return. The primary areas
that companies focus on that should
be addressed through a compensation
strategy are:
❙❙ Leadership: A company needs to
attract, motivate and retain the
caliber of executive required to
create the vision for the company,
translate that vision into a strategy
and then execute on that strategy.
The ability to do this goes beyond
the pay opportunity itself; it also
means ensuring that compensation
programs will be attractive to the
type of executive who will thrive
in the business environment and
work culture of the company and
who can help lead it to success.
❙❙ Driving value: Executive compen-
sation programs should directly
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5. 28 | workspan july 2015
contribute to company performance.
While financial performance may
be important in the short term,
it may not be enough in the long
term. This is because, historically,
companies have used the fairly
simple relationships of accounting
profits to sales and profit growth.
However, empirical evidence has
shown there is a relatively low
correlation between accounting
earnings and value creation. To
ensure that performance leads
to success, companies need to
focus on economic measures that
serve as drivers of long-term value
creation. Executive compensation
programs should pay for those
measures of real performance
that contribute disproportion-
ately to company success.
❙❙ Enterprise sustainability: It’s
important that companies achieve
their growth needs in a way that
contributes to success today, while
it contributes to success as an
ongoing organization. Creating
a sustainable enterprise involves
defining the value chain; identifying
opportunities to promote growth
through new products, new markets
and the composition of the busi-
ness portfolio; improving return on
capital through sales and marketing
strategies, creating sustainable
operations; and managing risk,
whether regulatory, reputational
or operational. As a result, a
company’s compensation strategy
needs to be future-focused as well
as focusing on today’s needs.
Executives
To ensure that its compensation
program provides maximum moti-
vational value to its executives, a
company must focus on more than
market position or the dollars being
delivered. It must also provide a
compensation opportunity that is
perceived as a high level of value
on the part of those executives. This
means that the company must have a
good understanding of those factors
that determine how perceptions are
formed. To an executive, percep-
tion is reality. And because each
executive has a unique and complex
way of processing information and
arriving at conclusions, compensation
arrangements may need to be flexible
to meet those diverse needs. There
are three primary factors that can
determine perceived value on the part
of executives:
❙❙ Cash flow and liquidity: With
much of executive compensa-
tion tied to performance and with
much of equity compensation
tied to ownership requirements,
it’s important to an executive that
the total compensation offering
provides a reasonable amount of
cash flow to meet ongoing cash
commitments. Additionally, owner-
ship requirements should allow for
an appropriate amount of liquidity,
particularly if the executive needs
to diversify holdings as part of a
personal risk management strategy.
❙❙ Career: Executives view the concept
of career broadly, to encompass
current pay, role and opportunity
and future pay, role and opportu-
nity. Depending on the situation,
an individual may make tradeoffs
between the two on an ongoing
basis. Issues like retention become
critical in establishing compensation
strategies — the Challenger, Gray
& Christmas 2014 Year-End Report
showed that CEO turnover in 2014
was at its highest level in six years.
Companies need to recognize that
retention means more than the dollars
that an executive would walk away
from. It may also mean the career
opportunity that he/she is staying for.
❙❙ Wealth creation: Executives face
a negative impact from ERISA,
which places significant limitations
on wealth creation through quali-
fied plans. So it’s important that a
company provide its executives
with tools for long-term capital
accumulation to create financial
portfolio sufficient to fund their
retirement needs. These may include
deferred compensation arrange-
ments, supplemental retirement
plans and equity compensation.
While conventional wisdom would
say that you cannot be all things to
all people, success in this area means
that you cannot afford to disenfran-
chise any constituent. Instead, the
company needs to determine what
the most important needs of each
constituent are and focus on those.
By doing a “Pareto Analysis” of the
different needs, you can clarify those
outcomes that will disproportionately
affect the commitment and support
necessary for continued success.
While conventional wisdom would say
that you cannot be all things to all people,
success in this area means that you cannot
afford to disenfranchise any constituent.
6. 30 | workspan july 2015
So how do you do this? To articulate a clear, complete
statement, you need to answer three basic questions:
What – How – Why. Sometimes you have to ask
more than once. For example, a company may state
that they want to dominate key market segments so
that they can create long-term value for shareholders
(“What”). The company may then state that they can
achieve this by targeting the 75th
percentile (“How”).
Why, because it needs to provide a compensation
opportunity that is attractive to the upper quartile of the
market. Why, because that is where you find the talent
needed to execute an aggressive growth strategy in
highly competitive markets.
Prudential Financial provides us with a good example
of this approach with their “Philosophy and Objec-
tives of Our Executive Compensation Program” found
on the Company website. In this statement, they state
“What” – we “provide an attractive, flexible, and market-
based total compensation program tied to performance
and aligned with the interests of our shareholders.”
The “How” is detailed in the eight core principle and
underlying tactics that serve as a basis for their execu-
tive compensation program. The “Why” – “Our objective
is to recruit and retain the caliber of executive officers
and other key employees necessary to deliver sustained
high performance to our shareholders, customers, and
communities where we have a strong presence.”
By pulling the “What” – “How” – “Why” together, they
provide a complete narrative on their executive compen-
sation program and spells out the key needs of each
constituency that their program addresses.
By addressing the priorities, needs and perceptions of
each of their constituencies in this way, a company can
develop an executive compensation strategy that provides
a framework for future success by guiding compensation
decisions to maximize their effectiveness. Investors and
shareholders will see the company as an attractive invest-
ment since the company is responsive to their interests.
Executives will be more engaged since their financial
and career needs are addressed through the compensa-
tion offering. The company will also have its needs met
through engaged executive team, better investor relations,
and a focus on performance achievement that contributes
to long-term, sustainable success.
Jim Sillery is principal and an executive compensation leader at
Buck Consultants in Minneapolis-St. Paul area. He can be reached
at james.sillery@buckconsultants.com.
resources plus
For more information, books and education related to this topic, log
on to www.worldatwork.org and use any or all of these keywords:
❙❙ Executive Compensation
❙❙ Leadership
❙❙ Rewards.
The philosophy underlying our executive compensation
program is to provide an attractive, flexible, and market-
based total compensation program tied to performance
and aligned with the interests of our shareholders. Our
objective is to recruit and retain the caliber of executive
officers and other key employees necessary to deliver
sustained high performance to our shareholders, customers,
and communities where we have a strong presence. Our
executive compensation program is an important component
of these overall human resources policies. Equally
important, we view compensation practices as a means for
communicating our goals and standards of conduct and
performance and for motivating and rewarding employees in
relation to their achievements.
Overall, the same principles that govern the compensation
of all our salaried employees apply to the compensation of
our executive officers. Within this framework, we observe
the following principles:
◆◆Retain and hire top-caliber executives: Executive offi-
cers should have base salaries and employee benefits
that are market competitive and that permit us to hire
and retain high-caliber individuals at all levels;
◆◆Pay for performance: A significant portion of the annual
compensation of our executive officers should vary with
annual business performance and each individual’s
contribution to that performance;
◆◆Reward long-term growth and profitability: Executive
officers should be rewarded for achieving long-term
results, and such rewards should be aligned with the
interests of our shareholders;
◆◆Tie compensation to performance of our core busi-
ness: A significant portion of our executive officers’
compensation should be tied to measures of perfor-
mance of our businesses;
◆◆Limit discretion: Incentive compensation should be
based on the Company’s financial results relative to
pre-established targets under applicable formulas, and
the Board generally should not exercise discretion to
adjust formula-based awards;
◆◆Align compensation with shareholder interests: The
interests of our executive officers should be linked with
those of our shareholders through the risks and rewards
of the ownership of our Common Stock;
◆◆Provide limited perquisites: Perquisites for our execu-
tive officers should be minimized and limited to items
that serve a reasonable business purpose; and
◆◆Reinforce succession planning process: The overall
compensation program for our executive officers should
reinforce our robust succession planning process.
OF OUR EXECUTIVE
COMPENSATION PROGRAM