November Al Zink Care.com

Transcription

1 COMPENSATION STRATEGIES AND TOTAL REWARDS 1 November 2013 Al Zink Care.com

2 What s Changed In the Last 30 Years Still the same: 2 Determine annual rates from market data Complete surveys, use survey data Watch trends, match trends Decide impact on employees (is it more than last year or less than last year?) Trying to figure out how to match pay increases against performance results

3 What s Changed In the Last 30 Years Changed or different: 3 Amount of cash, % increase to motivate and retain More and more and more information for the company and the employees about pay and metrics Employee engagement versus employee satisfaction Savvy employees, Millennials they have more information than their managers and leaders do

4 Data Abounds! 4

5 Today s Compensation Challenge Can you really motivate and distinguish top performers from satisfactory performers with 2% to 4 % merit increases? Goal setting and goal achievement programs at 5% or even 10%? Drive company-wide behavior with stock options that vest over 4 years and may be worth a new computer or car for most employees? 5

6 What are we doing? 6

7 A question If your pay levels were perfect what would your turnover rate be today? You have a pay philosophy Your managers and employees understand it You have accurately assessed the market and your pay structure addresses it 7 Flight risk? Engagement? Satisfaction?

8 Yes you can! Develop philosophy based on size and culture Build a structure parameters for pay Educate your managers open discussions Connect all the program elements 8 Base pay Bonus pay Stock options Benefits programs Educate employees: As candidates In onboarding During performance management Update and evolve the programs

9 Total Rewards Only Part of the Program Success and Reputation 9 Leadership Opportunities for Growth Challenge Total Rewards Sense of Community

10 Compensation Concepts by Level 10 Start Up/Cash Constrained Low base pay Low or no bonus & company driven Stock options for all Basic benefits Fun, involved, relaxed, employees have a voice & influence Small/Entrepreneurial Market base pay Individual & company bonus Stock: management and above Evolving benefits Career focus, team development, clearer processes, policies Mid-Sized/Large Market + base pay Individual goals & company metrics Restricted/Top level Extensive benefits, many alternatives Structured, predictable, well resourced

11 Another slice 11 BASE PAY BONUS PAY At least be in the market - it can vary by company size Use free sites Glassdoor, Association Surveys, Peer companies TSG still a great value in the market Payscale more expensive pay as you go, great data Consultants can help you build the foundation Innovative can mean complicated keep it simple Think logistics time, calculating and educating Tie to tangible and measurable eliminate conflict up front Most surveys show a base and bonus component Is the bonus enough to incent behavior, when in doubt leave it out STOCK OPTIONS Have a model up front for granting options by level Market data is not particularly helpful at levels below executive Don t use options as make-up for salary and bonus Educate and communicate about option value and process Be careful with options as ownership verus participation

12 HR/Finance Partnership Alignment on the qualitative and quantitative 12 A stated compensation philosophy that is communicated and consistently implemented Organizational value What is the ROI for $ s spent and structure created If HR and Finance come into my office and align on and approach, I would be foolish not to listen a Boston area CEO

13 Finance/HR Challenge Emerging/Startup - Finance Salary set by hiring process Levels set by reviewing internal employee salaries Limited market data surveys are expensive & take time Generic/broad job descriptions or summaries Small and evolving HR Better job information Focus on hiring market and comparator companies Title control not one title for every person Ongoing and systematic job market evaluations 13

14 Closing Thoughts 14 Think about pay and rewards holistically Base, bonus, stock and employee benefits Have a philosophy Based on your revenue, growth, dynamics Makes conscious decisions about you will and will not do Have a rationale for your decisions? What are your employees telling you? At hire, during pay discussions, as they leave

15 Thank you 15