Webinar-Comp Foundations-Overpayment/Underpayment
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The document discusses the foundations of compensation management, highlighting the importance of understanding legal, market, and organizational contexts. It provides guidelines for evaluating job market value, setting compensation ranges, and addressing underpayment and overpayment issues. Additionally, it emphasizes the need for effective communication and training for managers regarding pay-related conversations.
Webinar-Comp Foundations-Overpayment/Underpayment
- 1. Comp Founda+ons: So you’re paying, now what? Over Under
- 2. www.payscale.com Introduc+on Jenni Marquez, CCP Sr. Compensa+on Professional Camie Bailey Customer Training Specialist
- 3. 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
- 6. www.payscale.com Start by understanding your compensa+on context Legal Market Org
- 7. www.payscale.com Legal Context Federal, State, and Local laws Minimum Wage Fair Labor Standards Act Pay Equity Laws Other laws
- 11. www.payscale.com Examine your pay • Iden+fy Market Value for Jobs • Build Ranges • Evaluate Range Outliers
- 12. www.payscale.com Iden+fy Market Value for Jobs • Where do you compete for talent?
- 13. www.payscale.com • What are the unique compensable factors? Iden+fy Market Value for Jobs
- 14. www.payscale.com Match Jobs, not People
- 15. www.payscale.com 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
- 16. www.payscale.com Set Your Target Percen+le
- 17. www.payscale.com Set Ranges for Your Jobs
- 18. www.payscale.com Select All Market Reports in Live or Scenario
- 19. www.payscale.com Click in a row to bring up the menu and choose Set Ranges to Market
- 20. www.payscale.com 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
- 21. www.payscale.com Evaluate Range Outliers
- 22. www.payscale.com Range Outliers at a Glance
- 23. www.payscale.com min max mid Individual Range Outliers Be an Analy+cs Hero Webinar
- 25. www.payscale.com It’s +me to make some recommenda+ons
- 26. 26 Are they really over/under paid?
- 27. 27 Examine employee pay in the context of… • Organiza+onal goals • Policies • Compliance • Individual results and accomplishments
- 28. www.payscale.com Op+ons for addressing underpayment
- 29. www.payscale.com Increase all to boiom of range
- 30. www.payscale.com 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
- 31. www.payscale.com Priori+ze by those furthest from range
- 32. www.payscale.com Priori+ze by performance
- 33. www.payscale.com Priori+ze by business objec+ves
- 34. www.payscale.com Op+ons for addressing overpayment
- 35. www.payscale.com Freeze base pay • 95 employees in the red • $572k total, which is 2.10% of the total budget
- 36. www.payscale.com Offer performance-‐based lump sum payout
- 37. www.payscale.com *New -‐ PayScale Crew makes the increase process easy hip://payscale.hubs.vidyard.com/watch/FxUjY3g48VphMet4kYoXYL
- 38. www.payscale.com Allocate smaller increases • Using a merit matrix, those high in range already receive a smaller increase • Consider making “above” increases even smaller
- 39. www.payscale.com 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
- 40. High pay doesn’t necessarily mean overpayment Low pay doesn’t necessarily mean underpayment
- 41. A new, average performer may be “overpaid” here MINIMUM $50,300 $62,40 0 MIDPOINT MAXIMUM $74,40 0 Job Pay Range
- 42. A stellar performer, with high levels of experience, skills, and demonstrated results would be “underpaid” here MINIMUM $50,300 $62,40 0 MIDPOINT MAXIMUM $74,40 0 Job Pay Range
- 43. With certain comp policies, employees within their first 90 days in entry level roles may be appropriately paid here MINIMUM $50,300 $62,40 0 MIDPOINT MAXIMUM $74,40 0 Job Pay Range
- 45. 45 Communicate changes well
- 46. of companies are confident in managers’ ability to have tough pay conversa+ons 2016 PayScale Compensation Best Practices Report 17%
- 47. Train Execu+ves and Managers • Purpose of comp plan • Ra+onale for pay changes • Communica+ng changes
- 48. www.payscale.com Q & A (we’ll email this out)