Webinar-Exploring Variable Pay
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The document discusses the complexities of fair pay and variable pay, highlighting that while 73% of employers believe employees are fairly compensated, only 36% of employees feel the same. It outlines the importance of legal protections for equal pay, variations in compensation based on job roles, and the increasing prevalence of bonuses as part of employee compensation. Additionally, it emphasizes the need for organizations to create tailored variable pay plans that align with company and individual performance goals.
Webinar-Exploring Variable Pay
- 1. Exploring Variable Pay Fair isn’t equal Mykkah Herner, MA, CCP Modern Compensation Evangelist Paige Hanley, CCP Manager, Customer Operations A copy of the presentation and recertification credit will be sent out within a couple of business days
- 2. 15,000 Positions 3,500 Customers 11 Countries 250 Compensable Factors 54 Million Salary Profiles
- 3. www.payscale.com Paige Hanley, CCP Manager, Customer Operations https://www.linkedin.com/in/paige-hanley-ccp-26599716 Mykkah Herner, MA, CCP Modern Comp Evangelist https://www.linkedin.com/in/mykkahherner
- 4. www.payscale.com Protections for equal pay Fair pay isn’t equal Linking Fair Pay and Variable Pay • Variable pay basics • Creative variable pay Where to start
- 5. www.payscale.com Less than 100 Employees 100 - 1,000 Employees More than 1,000 Employees Nearly 7600 Respondents
- 6. www.payscale.com 73% of employers consider employees fairly paid 36% of employees feel they are paid fairly
- 8. Legal Disclaimer: this is intended to be informational, not to serve as legal advice. If you think you have a potential pay discrimination issue, seek out a lawyer.
- 9. www.payscale.com Definition what counts as a job? Secrecy non-retaliation for talking about pay Burden of Proof 100% of difference demonstrated from 1 of 4 reasons California Fair Pay Act WHAT’S THE BIG DEAL?
- 10. As California Goes… …so goes the nation.
- 11. 48/50 States have some version of a pay equity law on the books 9/10 Provinces* have some version of a pay equity law on the books
- 12. www.payscale.com Other legal protections Federal, State, and Local laws Minimum Wage Fair Labor Standards Act Other laws
- 15. There are some really good reasons to differentiate pay
- 17. www.payscale.com Linking Fair and Variable Pay
- 18. www.payscale.com Prevalence of bonuses has steadily increased over the past 4 years 68.5% 69.3% 73.4% 74.3% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 2013 2014 2015 Current Do You Give Bonuses?
- 19. www.payscale.com Is your bonus budget bigger in 2016 than 2015? 41% of all companies, 50% of top performing companies
- 21. Linking Pay to Performance Culture and perks that reward high performers Higher increases for top performers Results-based variable pay Performance-based rewards & recognition
- 22. The variable pay umbrella Incentive Project Bonus Retention Bonus Signing Bonus Perks
- 23. So you need to put together a variable pay plan Hint: keep it simple
- 24. www.payscale.com Mix of pay What ratio of base to variable?
- 25. www.payscale.com Aligned goals Company goals Team goals Individual goals
- 26. www.payscale.com Incentive Plan Incentive Level Mix of Base to Variable Mix of Company to Individual Overall, it may look like this… Bonus Level Possible Org Level(s) Bonus Payout as % of Base Bonus Percentage (Individual) Bonus Percentage (Organization) Level 1 Individual Contributor 5% 75% 25% Level 2 Lead, Supervisor 10% 60% 40% Level 3 Manager 15% 40% 60% Level 4 Director 20% 25% 75%
- 27. www.payscale.com Consider budget org culture job level job function company life cycle …
- 28. Overall pay structure may differ based on pay goals
- 29. www.payscale.com Mix of pay by life cycle High Rewards & Recognition High Rewards & Recognition Moderate Rewards & Recognition Moderate Rewards & Recognition Moderate Variable High Variable Moderate Variable Low Variable Low Base Low Base High Base Moderate Base High Equity Moderate Equity Moderate Equity Low Equity
- 30. www.payscale.com What other kinds of variable pay should we consider?
- 31. www.payscale.com What type of bonus? 15.8% 18.1% 61.8% 25.7% 40.0% 14.4% Retention bonuses Hiring bonuses Individual incentive bonuses Team incentive bonuses Spot bonuses or other discretionary bonus programs Other (please specify)
- 32. www.payscale.com Who gets bonuses? 69.0% 75.2% 69.3% 47.0% 12.6% Executives Directors and Managers Professional, Technical and Administrative Exempt Employees Non-Exempt Workers Other (please specify)
- 33. www.payscale.com How frequently? 4.9% 12.6% 6.4% 66.6% 9.4% Monthly Quarterly Biannual Annual Ad-hoc
- 34. Get Creative Passes to sporting events Catered lunches for winning teams Days off after big deadlines Choice of work assignment Development opportunities Lunch with the CEO Remote work
- 35. www.payscale.com Need help getting started? • If you don’t already have one, find an affordable legal resource in your state • Get to know the makeup of your workforce • Survey employees, formally or informally, to identify what motivates them • What is your current mix of pay? Do you offer something in all four tiers? • Evaluate your readiness for variable pay – what training is necessary?
- 36. PayScale Delivers Where Other Compensation Providers Fall Short PayScale leads the world in compensation knowledge with the freshest and most detailed data from over 54 million salary profiles. More than 3500 organizations use PayScale’s software and intelligence to get the greatest return on their talent. Smart businesses use PayScale Insight to recruit, retain and motivate their people. Visit our blog: www.payscale.com/compensation-today Join our Group on LinkedIn: Compensation Today: HR Best Practices Paige Hanley, CCP Manager, Customer Operations Mykkah Herner, MA, CCP Modern Compensation Evangelist www.payscale.com