| It's Spring - Time for a Compensation | | | | Has the market shifted? Is there a new |
| Program Tune Up | | | | strategic need in the organization that |
| Now that winter has passed, the annual | | | | will alter our market focus, either by |
| ritual of spring cleaning is in full | | | | type of job or market definition? Is the |
| swing. Spring cleaning is more than | | | | organization in a position to remain |
| cleaning the windows and clearing the | | | | competitive? |
| cobwebs that hid in the corners during | | | | - What internal job equity challenges or |
| the winter. "Spring is a time to take a | | | | pressures will be placed on the |
| serious look at your compensation | | | | compensation program in the coming |
| program and begin planning for the next | | | | year?o If a job evaluation system is |
| budget cycle. Depending on your | | | | used, are the factors and factor weights |
| organization's fiscal year, it may also | | | | applicable based on current strategic |
| be time to determine appropriate market | | | | direction? If not, what modifications |
| adjustments and pay increases for the | | | | are required? |
| coming year," said Michael Maciekowich, | | | | - What employee equity challenges or |
| National Director, Astron Solutions. | | | | pressures will be placed on the |
| Compensation program spring cleaning is | | | | compensation program in the coming |
| more than looking at the market and | | | | year?o Have recent market adjustments |
| determining adjustments. It is a time to | | | | and system modifications forgotten the |
| step back and determine if the system | | | | employees? Are we able to attract |
| remained in alignment with | | | | employees without causing internal pay |
| organizational and employee needs. Most | | | | compression? |
| organizations have long-term strategic | | | | - What financial challenges will impede |
| plans with short-term objectives to | | | | the ability of the organization to |
| determine progress. A compensation | | | | successfully fund and implement needed |
| program designed at the beginning of a | | | | compensation program elements?o Can the |
| long-term strategic cycle also needs | | | | organization sustain past financial |
| flexibility to address yearly short-term | | | | commitments to the compensation program? |
| organizational objectives. As new | | | | If not, how will spending priorities be |
| objectives come to the forefront, or | | | | set? |
| current ones are modified, the | | | | - What changes need to be made as to how |
| compensation plan must also change. | | | | employees are recognized and rewarded |
| This is a different way of thinking | | | | for their contributions to the |
| about compensation programs. There are a | | | | organization?o Do the current |
| number of tools and processes to help | | | | recognition and reward mechanisms work |
| with this matter. One is a survey of the | | | | to motivate employees to contribute to |
| compensation program's effectiveness for | | | | the organization's strategic direction? |
| users, including executive management, | | | | With these questions answered, human |
| department management, and employees. | | | | resource next must develop a strategic |
| The focus of this annual survey is the | | | | response. Take the five questions above |
| following: | | | | and overlay the four question survey |
| - What aspects of the current | | | | responses. This helps to develop a |
| compensation program were most effective | | | | strategic response to each of the five |
| in the past year?o What aspects seem to | | | | key compensation issues. Here are basic |
| have had a positive impact on employees | | | | examples of the thought process for |
| in terms of retention and morale? | | | | auditing current compensation processes: |
| - What aspects of the current | | | | - External Equity Issues: Most |
| compensation program were least | | | | effective. Continue current process. |
| effective in the past year?o What issues | | | | - Internal Equity Issues: Least |
| did human resources seem to spend the | | | | effective. Additional focus on internal |
| most time discussing with employees and | | | | job placement required. |
| managers? | | | | - Employee Equity Issues: Least |
| - What should be the focus of the | | | | effective. Serious compression issues |
| compensation program in the coming | | | | developed that need further action. |
| year?o What are managers' and employees' | | | | - Ability to pay issues: Most effective. |
| expectations in terms of compensation | | | | Required funding of the program is |
| determination? | | | | understood and available. |
| - What will prevent this from | | | | - Reward and Recognition Issues: Most |
| happening?o To what extent do managers | | | | effective. High level of satisfaction |
| and employees understand current | | | | with current performance assessment and |
| financial issues facing the | | | | rewards systems. |
| organization? | | | | With this information in hand, the final |
| With this understanding, human resources | | | | step is to create a focused strategic |
| must answer the following five | | | | response to present to senior |
| questions: | | | | management. The result is a fresh look |
| - What external market challenges or | | | | at your compensation program and a |
| pressures will be placed on the | | | | focused direction for the year ahead. |
| compensation system in the coming year?o | | | | |