Barton, chief operating officer, Willis North America Human Capital Practice, made her suggestions at the recent SHRM Annual Conference and Exposition in Orlando. She offers the following chart to help you classify your various reward elements.
Category Archives: Compensation Planning
Employers have myriad options when it comes to designing a compensation plan, and they must consider and how it will fit into their overall strategy for recruiting and retaining employees. This group of Compensation Daily Advisor articles will provide you with how to information on managing job evaluation, interpretation of survey data, setting of rate ranges, determining individual pay rates, and much more.
"In yesterday’s Advisor, we began our coverage of BLR’s 2014–2015 Pay Budget Survey results. Today, the rest of the results, including 2015 compensation planning."
[Go here for 2014 data and the rest of the survey results]
2015 Merit Increases
A mere 13.8% (down from 14.1% in 2013) of survey participants have decided and/or approved their pay budgets for 2015, leaving 86.3% undecided as of the end of June.
"BLR’s 2014–2015 Pay Budget Survey shows modest changes in compensation for the coming year."
Highlights of the survey:
- 18.2% of respondents are awarding merit increases (averaged across all employee types) of up to 2.5% in 2014 and 46.1% are awarding increases of more than 2.5%
- 21% of survey participants awarded an increase of 2.51–3% for “Meets requirements” and 12.9% awarded that amount for “Exceeds requirements.”
- The biggest challenge for respondents is “economy/revenue uncertainty.”
"Yesterday’s Advisor began our report on BLR’s 2014 Training and Development Survey; today, survey results on training methods, training budgets, and training metrics, plus survey demographics on the 1052 participants."
Our survey shows the following methods used regularly for training employees.
In the coming years, 86% expect to use more online training and 68% plan to utilize more in-person sessions conducted by the HR staff. More video/DVD and mobile/tablet-based materials will be used by 51%, and more telephone/audio conferences will be utilized by 47.9%.
"Highlight findings of the 2014 Training and Development Survey:
- New hire orientation is the most commonly offered training topic, followed by sexual harassment and emergency procedures.
- HR conducts the training at 78 percent of respondents’ businesses.
- In the coming years, 86 percent expect to use more online training.
"Yesterday’s Advisor featured consultant David Insler’s examples of compensation scorecard items; today, his comparative charts for unit-to-unit and comp-to-business data."
Unit Performance Differentiation
It’s hard to read the numbers in the chart below, but it’s easy to see what the chart is saying.
The collection of data on the bottom right is for employees rated “needs improvement.” The middle grouping is for “successful” performers, and the grouping at the right is for “exceptional” performers. The chart shows the percentages of employees in each performance category over a 4-year period.
"A compensation scorecard is a powerful aid for improving pay for performance, reducing entitlement, and, often, increasing employee acceptance of the pay program, says consultant David Insler."
A compensation scorecard is any dissemination of aggregate compensation information beyond the HR organization.
There are several types of scorecards, says Insler, who is the senior vice president at Sibson Consulting and leader of Sibson’s Western Region. His tips came during a recent BLR-sponsored webinar.
While the FLSA allows some very specific pay deductions for exempt employees, such as taxes and wage garnishments, it's typically quite strict about the fact that exempt employee pay shouldn't be reduced for exempt employee absences in most cases. It's important for employers to understand when certain payroll deductions may be perfectly legal, and when others may not be under federal law so they can keep their organization in compliance.
Let's take a look at some of the exceptions—some of the rare instances where exempt employee pay can be reduced for absences.
"The metrics you keep may be meaningful to you, but will they be meaningful to management? Is the analysis you provide to the C-suite in line with the strategic plan? Is it information that is useful in strategic decision making? If not, how can that be changed?"
Metrics let people make decisions based on objective information rather than simply guessing or going by instinct. Metrics also let people know what is important to the organization, since a metric that is tracked will be analyzed.
HR metrics have historically often focused on the past. For example, HR metrics often include things like turnover or time to hire. These data are useful but look only at raw info depicting what has happened, as opposed to assessing the “why” behind the data. Assessing the “why” is what will allow business leaders to make decisions accordingly. This is where HR professionals have an opportunity to change what metrics are presented and really make a strategic impact for the organization.