HR Professional - August/September 2008 - (Page 20)

C OM P E N S AT ION B Y D AV E N E I L LY TAKE YOUR COMPENSATION PROGRAMS OFF AUTO PILOT • A single salary structure framework for all the ompensation is one of an organcountries in which we do business. ization’s largest costs and has a • Pay base salary at the 50th per centile and significant impact on its ability to total cash compensation at the 75th per centile attract and retain an increasingly for excellent performance. mobile and fickle talent pool. Yet few organizations use compensation as a purpose- • An annual incentive program that takes the company, team and individual performance ful expression of workplace design and talent into consideration. strategy. To refocus your program, follow these STEP 3: Gap analysis four steps: Now you need to determine the major gaps STEP 1: Compensation philosophy The answers to the following questions take between your current and desired compensation your program design in different directions. programs: 1. Employment deal—What prominence does • Benchmark your employee population against the marketplace using published compensation compensation have alongside beneﬁts, surveys. training, physical workplace and other • Evaluate the cost implications and affordability employee investments in your total employee of the desired programs. budget? • Understand the implications of new program 2. Deﬁning the marketplace—Are you competing change-management, employee morale and for talent on the basis of industry sector, retention, and disruptions to the business. geography, demographics or professional STEP 4: Implementation discipline? Depending on the size of your organization and 3. Pay and the marketplace—Do you want to be seen as the “premier payer,” in the middle of the scope of changes required, compensation the pack or nearer the bottom of your peer strategy implementation can take anywhere from group? (There are valid reasons for considering months to years. As with any change initiative, each of these positions.) there are some critical success factors: 4. End goal—Is compensation the driver of • Sufﬁcient project resources performance or a means of focusing employees • Access to compensation design expertise on priorities? • Level of attention to communication, training 5. Mix of compensation elements—What is the and change management balance between base salary, annual and long• Measuring the effectiveness of the changes term incentives? over time 6. Individual vs. collective—Do you • Ensuring strong executive reward individual excellence commitment, leadership and TO SEE AN EXAMPLE or promote a “we’re all in this governance OF HOW ONE COMPANY together” approach to rewards? Having compensation programs 7. Incentives—Are they reserved anchored in strategy will deliver ADDRESSED THE only for high-impact employees or signiﬁcant beneﬁts, including PHILOSOPHICAL is everyone eligible? consistency in the approach and QUESTIONS POSED IN STEP 2: High-level program design resolution of compensation issues, STEP 1, GO TO This describes your total smooth compensation administration and, most importantly, the program’s compensation program including WWW.PEOPLECOMP.CA/ contribution to the success of the base salary, job evaluation and RESOURCES AND CLICK business. both annual and long-term ON THE “COMPENSATION incentive programs. The following PHILOSOPHY EXAMPLE.” statements are examples of a highDavid Neilly (david.neilly@peoplecomp.ca) is founder and managing level design: director of PeopleCOMP Inc., a human resources consulting firm. C 20 A u g u s t / S e p t e m b e r 2 0 0 8 HR P R OF E S S I ON A L http://www.peoplecomp.ca/resources http://www.peoplecomp.ca/resources

Table of Contents Feed for the Digital Edition of HR Professional - August/September 2008

HR Professional - August/September 2008 Contents Editor's Letter Contributors Leadership Matters Upfront Legal Compensation Human Capital The New Frontier On Message Strategy HR 101 Interview with Annette Veschuren Talent Management Training Work/Life Balance Off the Shelf The Last Word

HR Professional - August/September 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.