5 Steps To A Smart Compensation Plan
Transcript
- 1. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan
- 2. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Rusty Lindquist VP Strategic HR Insights BambooHR Mykkah Herner Head of Professional Services PayScale
- 3. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan 5 steps to set up your compensation plan Gain executive support. Define your compensation strategy. Develop a market-based pay structure. Build pay ranges. Implement a total rewards plan.
- 4. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Step 1: Gain Executive Support
- 5. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Payroll is, by far, a company’s biggest expense; the cost of getting it wrong is tremendous.
- 6. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Pay is the number 3 reason people quit jobs [BambooHR study]. If employees aren’t being paid what they’re worth, they will find it somewhere else. Executives must care about compensation if they care about retention.
- 7. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Top Compensation Mistakes • Not updating compensation regularly • Not empowering managers to fix problems • Not being transparent • Giving across-the-board raises • Not having a structured plan
- 8. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Compensation plans help the bottom line. 1. They make good business sense. 2. They help attract and retain talent. 3. They support your company’s mission, strategy and culture.
- 9. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan “If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it, you almost don’t have to manage them.” —Jack Welch
- 10. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Step 2: Define Your Compensation Strategy
- 11. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Questions to ask: • What is your market? • What are your goals? • How competitive do you need to be? • What should you reward? • Is your current strategy working?
- 12. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan What is the right compensation mix for your company?
- 13. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan —Harvard Business Review “Keep the plan simple. It should be extraordinarily clear which outcomes you are rewarding.”
- 14. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Step 3: Develop a Market- Based Pay Structure
- 15. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Decide on the correct job evaluation method. Market Pricing v. Point Factoring
- 16. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Aging is great… for wine and cheese.
- 17. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Step 4: Build Pay Ranges
- 18. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Identify Market Differentials Schedules preserve both competitive pay to local markets and internal equity. Baltimore +5% Dallas Main Minneapolis +5%
- 19. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Determine Your Pay Grades The number of pay grades you use will influence your midpoint differential and should sufficiently distinguish difficulty levels of different jobs.
- 20. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Some considerations include • How wide should my ranges be? • How much overlap between pay ranges is good? Build Pay Ranges
- 21. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Evaluating employee placement in range. Developing guidelines or policies for movement. Using Pay Ranges
- 22. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Use market data Verify internal alignment Assign Jobs to Grades
- 23. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Basic Function & Key Differentiators • Administrative Accounting Functions to support AP & AR • Update General Ledger • AP / Vendor Relations • AR • Maintain General Ledger • Prepare financial reports • Interpret financial reports and statements for management • Analyze financial data • Prepare budgets Degree & Certification Requirements None Bachelor’s Degree No certification required Bachelor’s Degree CPA required at proficiency Bachelor’s Degree CPA required at start Critical Skills at proficiency • Attention to Detail • Excel • Data Entry • Quickbooks • Attention to Detail • Quickbooks • GAAP • General Ledger • Monthly Reconciliation • Financial Reporting • GAAP • Financial Reporting • Financial Analysis • Budgeting Years of Experience • 1-2 at proficiency • 3-5 at proficiency • 5-7 at proficiency • 8-10 at proficiency Accounting Assistant Senior Accountant Accountant I Accountant II Grade C Grade E Grade 5 Grade 7 Build Career Path
- 24. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Step 5: Implement Total Rewards Plan
- 25. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Compensation Plan Element • Philosophy • Strategy • Structure • Policy • Process
- 26. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Budgeting for Increases
- 27. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Deal with Outliers
- 28. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Strategies: Equip Managers • Educate them • Give them the big picture • Give them tools
- 29. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan What can we do now? 1. Talk with executives about the need for an updated compensation plan. 2. Research market data for your employees’ jobs. 3. Create a pay structure to ensure internal equity. 4. Review your current compensation policies and decide where updates are needed.
- 30. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Follow BambooHR and PayScale on social media: bamboohr.com/blog | payscale.com/compensation-today Thank you!
- 31. bamboohr.com payscale.com 5 Steps to a Smart Compensation Plan Questions? BambooHR Receive a free job posting on our ATS and full HRIS for one week. We will contact everyone within the next few days to set this up. Download our free eBook: Communicating Compensation: Your guide to tackling tough conversations about pay PayScale