webinar-comp foundations-overpayment/underpayment
TRANSCRIPT
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Comp Founda+ons:
So you’re paying, now what? Over
Under
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www.payscale.com
Introduc+on Jenni Marquez, CCP Sr. Compensa+on Professional
Camie Bailey Customer Training Specialist
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www.payscale.com
54 Million Salary Profiles 10 Org types 350 Industries 15,000 Job Titles
2,300 skills, 4,200 cer+fica+ons
The World’s Largest Salary Database
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The Basics
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Start by understanding your compensa+on context
Legal Market Org
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Legal Context Federal, State, and Local laws
Minimum Wage
Fair Labor Standards Act Pay Equity Laws
Other laws
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Market Context
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Org Context
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The Science
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Examine your pay • Iden+fy Market Value for Jobs • Build Ranges • Evaluate Range Outliers
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Iden+fy Market Value for Jobs
• Where do you compete for talent?
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www.payscale.com • What are the unique compensable factors?
Iden+fy Market Value for Jobs
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Match Jobs, not People
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Tips & Best Prac+ces:
• When searching; less is more! • A “good match” is when 70% or greater of
the task list aligns with the job in ques+on • You cannot edit job tasks • Consider flipping your search around
-‐ Example: Director of Sales vs. Sales Director Job Matching Webinar
Iden+fy Market Value for Jobs
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Set Your Target Percen+le
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Set Ranges for Your Jobs
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Select All Market Reports in Live or Scenario
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Click in a row to bring up the menu and choose Set Ranges to Market
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Use Annualized Min-‐Mid-‐Max to Market View
Job-‐Based Market Range Market Value at Target Difference between range midpoint and market at target
Job-‐Based Market Ranges
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Evaluate Range Outliers
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Range Outliers at a Glance
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min max mid
Individual Range Outliers
Be an Analy+cs Hero Webinar
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The Art
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It’s +me to make some recommenda+ons
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Are they really over/under paid?
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Examine employee pay in the context of…
• Organiza+onal goals • Policies
• Compliance
• Individual results and accomplishments
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Op+ons for addressing
underpayment
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Increase all to boiom of range
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Bring employees into range over +me
• 28 employees in the green • $143k total, 0.53% of the total budget • Decide on a plan: e.g., spend .25% now and .25% in 6 months • Priori+ze
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Priori+ze by those furthest from range
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Priori+ze by performance
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Priori+ze by business objec+ves
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Op+ons for addressing
overpayment
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Freeze base pay • 95 employees in the red • $572k total, which is 2.10% of the total budget
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Offer performance-‐based lump sum payout
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*New -‐ PayScale Crew makes the increase process easy
hip://payscale.hubs.vidyard.com/watch/FxUjY3g48VphMet4kYoXYL
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Allocate smaller increases • Using a merit matrix, those high in range already
receive a smaller increase • Consider making “above” increases even smaller
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Reduce pay* • *Not usually recommended – check w/ employment lawyer • If you have significant overpayment, consider reducing pay • This some+mes happens in organiza+ons with highly tenure • 64/476 employees account for $248k or 43% of pay in the red
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High pay doesn’t necessarily mean overpayment
Low pay doesn’t necessarily mean underpayment
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A new, average performer may be “overpaid” here
MINIMUM
$50,300 $62,400
MIDPOINT MAXIMUM
$74,400
Job Pay Range
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A stellar performer, with high levels of experience, skills, and demonstrated results would be “underpaid” here
MINIMUM
$50,300 $62,400
MIDPOINT MAXIMUM
$74,400
Job Pay Range
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With certain comp policies, employees within their first 90 days in entry level roles may be appropriately paid here
MINIMUM
$50,300 $62,400
MIDPOINT MAXIMUM
$74,400
Job Pay Range
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The Execu+on
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Communicate changes well
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of companies are confident in managers’ ability to have tough pay conversa+ons 2016 PayScale Compensation Best Practices Report
17%
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Train Execu+ves and Managers • Purpose of comp plan
• Ra+onale for pay changes
• Communica+ng changes
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Q & A
(we’ll email this out)