Mykkah Herner, MA, CCP Head of Professional Services Ian Englund, CCP Sr Compensation Professional PayScale, Inc. www.payscale.com

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14,000 Positions 3000 Customers 11 Countries

250 Compensable Factors 40 Million Salary Profiles

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Three-part Series on Compensation Budgeting

Part I: Managing Pay Inequities

Part II: Determining Raises

Part III: Putting it all together with PayScale Insight

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Agenda

Recap of Parts I & II

Part III

• Identifying Pay Inequities – Org Level

• Identifying Pay Inequities – Position Level

• Identifying Pay Inequities – Employee Level

• Calculating Pay Increases

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Start with a plan

• Know your comp Philosophy, Strategy, and Policy

• Get reliable market Data

Identify comp inequities at Org, Dept, Position, and Individual levels

• Org/Plan level: fair pay to market

• Dept level: fair pay across departments

• Position level: have some positions move faster than others?

• Employee level: are you paying according to your policy? Fairly based on EEO status?

Develop solutions

Recap of Part I

http://resources.payscale.com/hr-webinar-recorded-compensation-budgeting-three-part-series.html

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Know what you want to reward

Streamline the increase process

Calculate pay increases

• Market-based

• Merit-based

Develop budget recommendations

• Range Adjustments (Org level)

• Market Adjustments (Position level)

• Equity Adjustments (Individual level)

• Pay Increase Adjustments

Recap of Part Il

http://resources.payscale.com/hr-webinar-recorded-compensation-budgeting-three-part-series.html

Organizational Level Pay Inequities

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Identifying Org Level Inequities

Ranges to Market

o Examine Ranges to Market on the whole – do most move up? Most move down? What’s the average?

o Do you want to move ranges at this time?

o Budget

o Organizational demands

Position-Level Pay Inequities

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Identifying Position Level Inequities

Ranges to market by position

o Does the market suggest moving the position to a new grade?

o What are the EE compa-ratios for those positions?

o Decide which to move – examine where other positions are in the job family

o How to identify what type of market premium could be applied to a position (vs moving the grade)

Employee-Level Pay Inequities

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Identifying Employee Level Inequities

o Paying according to policy:

• green-circled, red-circled

• compression

o EEO Concerns

• resolve critical issues asap

Calculating Pay Increases

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Using a Matrix (Merit or Proficiency)

Tier increases by position in range & performance

o Start with a budget increase %

o Allocate increases to EEs based on range penetration and performance

o Create spreadsheet o Note: Proficiency, or another factor, can work like

performance in this example

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Increase Spreadsheet

Name Job Title Current Annual Base

Range Min

Range Mid

Range Max

Compa-Ratio

Range Penetration

Increase %

Annualized Increase

New Annual Base

New Compa-ratio

New Range Penetration

Alexander, Maria Account Manager $45,900 $46,300 $57,100 $67,900 0.804 -2% 3.80% $1,744 $47,644 0.83 6%

Arnold, Alexandra Driver I $29,600 $29,300 $35,700 $42,100 0.829 2% 3.80% $1,125 $30,725 0.86 11%

Baker, Nicholas Account Executive $46,500 $40,400 $49,800 $59,200 0.934 32% 3.80% $1,767 $48,267 0.97 42%

Allen, Ryan Program Manager $86,700 $73,600 $93,300 $113,000 0.929 33% 3.80% $3,295 $89,995 0.96 42%

Bailey, Sara Senior Account Executive $64,000 $54,700 $68,400 $82,100 0.936 34% 2.80% $1,792 $65,792 0.96 40%

Anderson, James Customer Service Rep $45,500 $34,900 $42,500 $50,100 1.071 70% 1.90% $865 $46,365 1.09 75%

Andrews, Vincent Senior Account Executive $76,700 $54,700 $68,400 $82,100 1.121 80% 1.90% $1,457 $78,157 1.14 86%

Adams, Christina Account Manager $63,800 $46,300 $57,100 $67,900 1.117 81% 1.90% $1,212 $65,012 1.14 87%

Total/Average $458,700 0.967625 41% 2.96% $13,257 $471,957 1.00 49%

SUM AVG AVG AVG SUM SUM AVG AVG

• Compa-Ratio = Current Annual Base / Range Mid • Range Penetration = (Current Annual Base – Range Min) / (Range Max – Range Min) • Annualized Increase = Increase % * Current Annual Base • New Annual Base = Annualized Increase + Current Annual Base • New Compa-Ratio = New Annual Base / Range Mid • New Range Penetration = (New Annual Base – Range Min) / (Range Max – Range Min)

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Mykkah Herner, MA, CCP Manager of Professional Services, PayScale, Inc.

www.payscale.com