Path to pay for performance
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The Path toPay for Performance
Joe BrownSlope Resources
Nonprofit HR SymposiumSan Diego, CA
June 16, 2010
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Founded in 1998
Human resources and organization managementconsulting services for nonprofits
Compensation and performance management
“Big firm” background
Blog: Done by People
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How many utilize…
Formal pay for performance program
Formal, non-performance-based compensation program
Informal/ad hoc compensation practices
Where are you?
?
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Barriers to pay for performance?
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Building blocks
Rewardopportunity
Compensation program
Internal equity
Market competitiveness
Performance management program
Individual/team contribution
Base salary
Incentive compensation$Actualrewards
Performance
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What…
Job responsibilities
Goals
…how
Competencies
Expectations
Performance management program essentials
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Focus on “management”…
…not “evaluation” or “rating”
Emphasize communication…
…not the form
Keep it simple…
…and make it fit
Performance management program essentials
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Communication and input
Job descriptions
Employee ► manager ► HR
Grouping/grades
Assess internal equity
Compensation program development
$0
$20
$40
$60
$80
$100
Job Size
Co
mp
ensa
tio
n
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Identify markets
Assess market competitiveness
Published surveys
Custom surveys
Informal data collection
…caveat emptor
Compensation program development
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Articulate compensation philosophy
What does the organization pay for?
What values should be communicated and reinforced?
In what forms is compensation delivered?
What budgetary constraints are reflected?
How competitive should compensation be?
With what market(s)?
Compensation program development
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Develop salary policy
E.g.: median of metro area organizations with operating budgets of $5 million to $10 million
Costs
Under minimum
Equity increases
Short-term/long-term targets?
Compensation program development
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Construct salary ranges
Compensation program development
Minimum(80%)
Maximum(120%)
Midpoint(100%)
Performance over time
Low HighAverage
Hiring range
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Salary administration guidelines
New/changed jobs
Promotions
Hiring
Over maximum
Implementation
Communication and feedback
Compensation program development
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Merit increases
Performance evaluation
Position in salary range
Merit increase
0%0%0%Unacceptable
0%2%3%Below Requirements
2%3%4%Successful
3%4%5%High
4%5%6%Exceptional
>110%90% - 110%<90%Performance evaluation
Position in salary range
0%0%0%Unacceptable
0%2%3%Below Requirements
2%3%4%Successful
3%4%5%High
4%5%6%Exceptional
>110%90% - 110%<90%Performance evaluation
Position in salary range
Merit increase grid (example)
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Periodically…
Review internal equity and market competitiveness
Adjust salary ranges
Ensure alignment with compensation philosophy
Compensation program management
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Continue building
Strategicplanning
Non-cashrewards
Professional development
Career development
Succession planning
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Joe BrownSlope Resources
908 241-8592
sloperesources.com
twitter.com/joe_brown
Thank you!