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.

Regression Analysis: Setting Pay Levels with Precision


"Regression analysis is commonly used in compensation to match, verify, or predict salary levels. In today’s Advisor, Consultant David Wudyka clarifies how to use the technique."

What Is Regression Analysis?

Regression analysis is a statistical technique that predicts the level of one variable (the “dependent” variable) based on the level of another variable (the “independent” variable).

In a compensation setting, for example, that might be the relationship of executive pay to company size or company revenue.

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Development, Mentors, Opportunities, Risk, and Reward Keep HIPOs Engaged


"In yesterday’s Advisor we offered tips for handling the difficult situation: high potential employees low on the career ladder who are antsy because Boomers won’t retire. Today, more tips, plus an introduction to the unique guide just for HR “Lone Rangers”—the one-person HR departments."

Here are some more tips for managing HIPOs (high potentials):

  • Increase risk and reward. This might mean giving more at-risk salary in the form of bigger bonuses or incentive pay for outstanding performance. Having more say over final take-home pay can allow HIPOs to feel more in charge of their career outcome, even if the title isn’t changing immediately.
  • Provide development opportunities. This might include training programs, conference attendance, certification opportunities, and more. The key is to ensure that there are continual opportunities to gain new skills and grow. Look both externally and internally within the organization for ideas.
  • Give them a mentor. There are people in the organization who can help these employees learn, grow, and better understand the organization as a whole. Be sure to choose the mentor wisely—he or she should be a good match on an individual level, not just chosen at random. This can be difficult to implement, but pays off when done well.
  • Keep a performance review schedule. Even in organizations with a performance management system firmly embedded, it’s easy to let employee performance reviews take a back seat. Don’t let that happen. Especially for HIPOs, getting feedback on performance can be invaluable when it comes to staying motivated. Performance management can include discussions about career progression and development as well, as we noted above.
  • Ensure the HIPOs’ supervisors are on-board with these efforts. Many of the above programs will fall apart without the active management by the direct supervisor of the HIPO employee. Work with your supervisors on all of these steps to ensure everyone is on the same page. If necessary, move HIPO employees outside of the standard organizational system and allow them to report to someone else in the organization when doing so makes sense for that individual.
  • The key to all of this is showing HIPO employees how much they matter to the organization. By following some of the above strategies, employers can make a big impact and reduce the likelihood of turnover among HIPOs, even without fast career progression.

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Boomers Won’t Retire; My HIPOs Are Antsy


"The Boomers aren’t retiring and the HIPOs (high potentials) below them on the career ladder are starting to wonder when, if ever, they’ll get to move up. What’s to be done?"

Although the economy is slowly on the mend, it’s still noticeable that many employees near or past traditional retirement age have opted to stay working longer. Often, this is to bolster a nest egg that took a hit during the recession. Sometimes, it’s because they don’t feel the desire to leave the workforce just yet, and would rather be productive in a job. Some feel their job is what gives them status. Some are frightened by the prospect of retiring. No matter the reason, there are ripple effects throughout the organization.

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Shutdowns, Furloughs and Weather Delays—Wage/Hour Minefields


"Yesterday’s Advisor featured guidelines for deductions from exempt pay; today, deductions for business shutdowns and weather closings, plus an introduction to a practical guide to wage and hour compliance."

Business Shutdowns and Furloughs

It should be no surprise that many employers have sought creative work arrangements in order to weather bleak times without resorting to morale-killing layoffs. Furloughs, temporary shutdowns, and reduced-hour schedules are common workplace solutions. However, the intricacies of the FLSA make these solutions tricky.

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Danger Zone—Deductions from Salaried Employees’ Pay


"When it comes to assessing an employee’s exempt status, the duties requirements get the lion’s share of attention. It’s easy to forget that the salary basis rules are nearly as complicated—and just as important."

Generally, payment on a salaried basis means that employees receive a predetermined amount of pay that can’t be reduced due to variations in the quality or quantity of their work. Employees must be paid their full salary for any week in which they:

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  • Perform any work, regardless of the number of hours or days worked; or
  • Are ready, willing, and able to work but unable to do so because no work is available.

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Supervisory Sin 7: Making Wage/Hour Blunders


"Yesterday’s Advisor featured the first six sins of supervisors. Today, sins 7 through 10, plus an introduction to a timely webcast that will help you find wage/hour problems (yes, you do have them) before the feds do."

[Go here for sins 1 through 6.]

Sin #7. Making wage\hour blunders

We’re out of overtime. Can you clock out and then set up for tomorrow?
You’ll be working alongside our regular employees, but you new recruits are all independent contractors.
Tracy, make sure you stay close to the phone during lunch.
Sandy, keep your phone near you evenings for calls from the West Coast.

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Forecast Points to Real Pay Increases in 2014

This great infographic via Mercer points to global pay increases for the upcoming year, based on Mercer’s latest Global Compensation Planning Report. View the image below for a summary of the findings.

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4 Reasons Your Top Talent Is Thinking About Leaving


"For key talent, the job market is always hot, says WorldatWork’s Kerry Chou, and with the economy improving, things are just going to get worse."

Chou, who is senior practice leader, compensation, at WorldatWork, offered his tips at WorldatWork’s Total Rewards 2013 Conference and Exhibition in Philadelphia.

Why Key Talent Leaves

Employers are always concerned about retaining top talent, says Chou, and most are getting a little more concerned as the economy brightens. However, the truth is that the job market is always hot for key talent.

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A Sophisticated Merit Increase Grid


"Yesterday’s Advisor featured advice on variable performance pay from consultant Teri Morning, MBA, MS, SPHR, SPHR-CA. Today, her salary increase grid that is a little more complex than most, plus we announce an upcoming webinar, ABCs of Setting Up Job Grades: How to Successfully Build a Market-Based Pay Structure from Scratch."

Morning says her grid takes into account three factors (market and business performance, individual performance, and position in range), plus there’s a lump sum option.

Pay increases are based on three main factors, says Morning, president of Teri Morning Enterprises in Carmel, Indiana, who made her suggestions during a recent webinar sponsored by BLR®.

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Why the Trend Toward Variable Performance Pay?


"Employers want to end the entitlement mentality of across-the-board increases and move to a pay-for-performance mentality, says consultant Teri Morning, MBA, MS, SPHR, SPHR-CA. Organizations are looking for less expensive, less permanent solutions, such as lump sum payments, bonuses, or just paying top performers, she adds."

Increasingly, employers are less averse to withholding merit increases for poor performers so they can afford to grant meaningful increases to better performers, says Morning, who is president of Teri Morning Enterprises in Carmel, Indiana. Morning made her suggestions during a recent webinar sponsored by BLR®.

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