Compensation- Getting it Right

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This time of year brings all the excitement of the holidays, Halloween, Thanksgiving, Christmas and Hanukkah, among others.  Amid all the festivities, for many organizations, it brings Compensation planning activities including revisions of salary structures, decisions on merit increases, promotions, adjustments and bonuses.  Before you say “Bah Humbug” let’s take a closer look at how to structure a compensation plan and why it’s so important to your organization. 

For all of the articles out there espousing compensation as a short term motivator, compensation speaks to our employees.  It tells a story of how we perceive their value in the workplace.  There is little that is more important than the value one sees in oneself and that is partly determined by the value others place on us and our contributions.

Ask Questions

You have to start out by asking the right questions in order to determine what your company’s compensation strategy should be.  It’s OK not to have all the answers, they will provide topics for discussion with your internal teams.

What are your goals?   

It’s important to know what problem you are trying to solve before you launch into a strategy to solve it.  Do you have excessive turnover?  Are you having a hard time attracting candidates?  Are you losing your high potential employees at an alarming rate?  Do you need to focus certain groups on different goals

How would you define your market?

Is it defined solely based on a geography you are in?  Do you need to include competitors outside of your geographical regions?  Is it domestic or do you have international competitors as well?  Sometimes, you can get a good clue to identifying this by asking where do your employees come from, and where do they go when they leave?

How competitive do you need to be?   

Some disciplines like Big Data are highly competitive and there may only be a handful of candidates that everyone is competing for.  On the other hand, if your positions are relatively common and there are many candidates available, you may be able to set you target closer to the 50th percentile and be just fine

What and how should you reward?  

What behavior do you want to reinforce and what types of rewards will you give?  The most effective plans focus on a Purpose Statement and/or Guiding Principles.  Your rewards should ultimately drive the culture you are trying to create.  Even monetary rewards come in many different forms.  They could be merit increases, promotions, short term or long term cash incentives.

All of the above questions will help to guide you toward the most effective compensation strategy for your organization and drive employee productivity forward. 

 

Let leaders lead

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Most who enter the Human Resources disciplines due so out of a desire to help others and to help the organization to align their employee workforce with the goals of the company to further productivity.  Often times, however, we forget to let our leaders lead.  Especially as an organization grows, HR functions need to adopt a “train the trainer” approach more than a train everyone approach.  Although enlightened organizations put their full support and resources into HR functions, the team still has a responsibility to be able to scale the organization without adding significant numbers of HR team members.  Efficiency is key.

Train- the- trainer

A train-the-trainer model allows experienced trainers to show a less-experienced individuals how to deliver courses, workshops and seminars. http://work.chron.com/train-trainer-model-5463.html Usually, a new instructor first observes a training event led by the course designer. A train-the-trainer approach can build a pool of competent instructors who can then teach the material to other people. Instead of having just one instructor who teaches a course for a long time, you have multiple instructors teaching the same course at the same time. This ensures that employees get timely training to complete tasks according to company policies and procedures.

Identify SME’s

SME’s or subject matter experts exist in all corners of the organizations and at all levels.  It is a fairly good bet that your excel gurus are not sitting in the corner office.  Tap those resources!  Find out how has a skill set that the rest of the organization could benefit from and engage the SME to deliver the training. This serves two purposes.  One, it enhances your pool of trainers and two, it gives well deserved recognition to a group of people who might be overlooked otherwise, further engaging them in the business.  

Step out of the way

The inclination is to teach every class to every audience, but the real goal is to get the training out to a broad audience in a timely manner.  Like a proud parent, you need to teach your junior trainers your techniques, ensure that they know their material, do a few dry runs with them and then let them launch.  Will it be perfect, no. Will it improve with time, yes and will you gain far more by engaging your workforce then trying to do it all yourself, a big YES!

Training is not a one and done.  It is a process over an unending period of time that, done correctly, not only teaches a new skill, but also engages and inspires a workforce to do greater things both in their work and personal lives.

Teach a Man to Fish

One of life’s conundrums is the choice of when to do something for someone and when to teach them to do it for themselves.  This is an age old struggle between parents and children, teachers and students, managers and employees and the Human Resources team and our internal customers.  We all want to help those in need whether it’s a child struggling to open a heavy door or an employee who needs a quick answer.  But are we really “helping” when we constantly rush in to be the hero or are we really fueling a need within ourselves?  Might it not actually be better to teach someone how to be self-sufficient and then step back and out of the way?  This would allow you to make a greater and more broad reaching impact.

Especially for those of us in HR who, generally, are in this function because we enjoy helping others, we might want to take a look at how to more effectively “help” others in the organization.  It would be beneficial to have a plan when someone comes to you with a problem.  A way to identify whether this is a crisis and an immediate need or an opportunity to teach someone to be able to do it for themselves.

Urgent or Immediate needs

HR gets bombarded daily with immediate needs or at least needs that the internal customer thinks are immediate needs.  A few examples of actual immediate needs:  Someone has fallen and you need to call 911, someone is making credible threats and needs to be escorted out of the building, access to systems need to be shut down due to an involuntary termination for cause.  These are the types of needs that you will always handle and are probably not teachable, necessarily, to someone else.

Important needs

Important needs are those that are important but not urgent.   Examples might be a question on an incentive plan and how it works or an update on a particular position you are hiring for.  Some critical needs can lend themselves to establishing SOP’s, Standard Operating Procedures.  Requisitions reports can be created and distributed so that managers can check statuses of their openings.  Webinars can be held to explain the nuances of the incentive plans.

Routine needs

Routine needs are those that someone will call you for every time they need the answer. Someone has an address change, or a title change or a change in the car reimbursement program.  Routine needs are wonderful teaching opportunities.  Offer to walk the person through the steps needed and then establish the SOP’s, standard operating procedures,  and let them know where to access them.

Un-needs

Occasionally, you run into those people, or they hunt you down, with on-going, what we will call, un-needs.  This is the desire to have someone listen to them by creating a perceived need.  In these situations, the best thing to do is to politely remind the person that you have a call coming in or must get back to your work.  You can train someone out of this behavior, but not necessarily teach them.

By defining the different classification of needs, you will work more efficiently, have a broader impact and be able to help others to help themselves.

Compensation systems

The last component of an effective HRIS is a Compensation system.  A sophisticated compensation system will save you hours of number crunching using excel spreadsheets.  Many of these systems are sold as a component of Performance Management systems, but there are a few stand alone ones as well.  It is always best to integrate where possible because you save yourself the time and effort involved in paying someone to write the integration software for you and the headaches that come with integrating two systems that were not designed to work together.

The capabilities you want to look for in your Compensation Systems are:

Integration

Ensure that your performance management system and your compensation system are fully integrated so that all the performance scores from the manager’s appraisal,  employees’ self-appraisals and any 360 reviews you have, flow over to your compensation system.  This will make is significantly easier for your managers to be able to rank employees and doll out the appropriate performance based merit increases.

Pro-ration

You want to ensure that your system has the ability to handle pro-rations, preferably down to the day, so that employees who start on September 1st are not eligible to receive the same increase as employees who started January 1st.  If you have implemented an annual bonus program, ensure that the pro-ration will apply here as well.  Also ask if it will handle lump sum increases if someone is at the range max.

Edit Capability

One of the most frustrating aspects of a poorly designed compensation system is when it does not allow for edit capability all the way up the line.  If the spreadsheet gets to your VP’s and they have to send it all the way back to the supervisors to make changes, you will lengthen your process considerably.  You should be able to pick and choose who you want to give edit capability to for each spreadsheet.

Co-planners

Invariably someone will pick an inconvenient time to terminate and you will be left with a situation where you need to assign another person to actually complete the merit increases for their group.  Your system should allow you to select a co-planner or, even better, to switch managers once the process has already launched. 

Custom Reporting

Your system should come equipped with an easy to use and easy to understand reporting functionality.  Nothing is as frustrating as having a new system and then having to dump everything in excel in order to actually manipulate the data.  Spend some time up front fully understand the reporting capability and figuring out whether it will truly provide you with the info you need to report on.

Multiple types of Compensation

Your system should handle base salary increases, short term incentives and long term incentives like Equity awards or RSU’s.  A system that cannot adequately handle long term equity incentives will give you a lopsided view of your employees’ compensation and how that compares to market

As with the other components of the HRIS that we have talked about, putting twice as much time in up front as you expected will yield the best results in the end. 

Are You Networking Correctly?

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Every professional should be constantly working to develop their networking skill set. The word “networking” is thrown around in almost every career-oriented workshop or classroom, but many people do not fully understand the benefits of proper networking, and struggle with determining exactly what networking entails. In my line of work, I’m constantly seeing well-networked individuals flourish, because a great network provides great opportunities. These are a few networking tips to follow whether you’re just getting into the game, or a seasoned networking vet looking for a refresher.

 

Practice Makes Perfect

Networking can feel very overwhelming and intimidating to some people. If you’re an introvert, the best thing to do is to practice. Find a few networking groups and start making contacts. Dr. Ivan Misner, Founder and Chief Visionary Officer of Business Network International, says that you should create four different networks of people:

  • Casual Contacts: The individuals you meet by attending mixers and general networking events.
  • Strong Contacts: Business professionals you interact with at industry specific events and groups. (Depending on your industry, you may be able to find groups that gather frequently with the specific goal of creating strong business relationships.)
  • Knowledge Contacts: People you meet through professional associations.
  • Online Contacts: Casual contacts that you connect with online.  (We are in the age of the internet, and your online presence can be the key to your next big career move. Linkedin is currently the most effective online networking site available. )

 

Network Before You Need To

If you’re just getting out of school, be sure to keep in contact with professors, classmates, family friends, etc so that you have a network of people to turn to during the first job hunt. If you’re thinking about changing jobs or industries, start attending events and bulking up your network before you feel like you MUST leave. The one thing that “seasoned” (trustworthy) networkers shy away from are individuals who feel desperate. Try to network with people when you don’t have an alternative motive, so that your interactions come across as genuine.

 

Maintain Your Network

Remember that your network is made up of people. You have to make sure that you build and maintain relationships with the people you connect with. The last thing that you want to do is be the person that only reaches out when you need something.

One great way to maintain your network is to set up a calendar of birthdays and special occasions. Sending a quick text or email on those days will make you stand out as genuine and engaged.  Outside of the special occasions, make sure to send thank you notes, set up coffee dates, or send over articles you think might be of interest.

 

 

There are so many more ways to build and maintain your network. Feel free to check out these additional resources: Business InsiderForbesThe Muse