|Small Business Information|
Its Spring - Time For A Compensation Program Tune Up
Now that winter has passed, the annual ritual of spring cleaning is in full swing. Spring cleaning is more than cleaning the windows and clearing the cobwebs that hid in the corners during the winter. "Spring is a time to take a serious look at your compensation program and begin planning for the next budget cycle. Depending on your organization's fiscal year, it may also be time to determine appropriate market adjustments and pay increases for the coming year," said Michael Maciekowich, National Director, Astron Solutions.
Compensation program spring cleaning is more than looking at the market and determining adjustments. It is a time to step back and determine if the system remained in alignment with organizational and employee needs. Most organizations have long-term strategic plans with short-term objectives to determine progress. A compensation program designed at the beginning of a long-term strategic cycle also needs flexibility to address yearly short-term organizational objectives. As new objectives come to the forefront, or current ones are modified, the compensation plan must also change.
This is a different way of thinking about compensation programs. There are a number of tools and processes to help with this matter. One is a survey of the compensation program's effectiveness for users, including executive management, department management, and employees. The focus of this annual survey is the following:
? What aspects of the current compensation program were most effective in the past year?
o What aspects seem to have had a positive impact on employees in terms of retention and morale?
? What aspects of the current compensation program were least effective in the past year?
o What issues did human resources seem to spend the most time discussing with employees and managers?
? What should be the focus of the compensation program in the coming year? o What are managers' and employees' expectations in terms of compensation determination? ? What will prevent this from happening?
o To what extent do managers and employees understand current financial issues facing the organization?
With this understanding, human resources must answer the following five questions:
? What external market challenges or pressures will be placed on the compensation system in the coming year?
o Has the market shifted? Is there a new strategic need in the organization that will alter our market focus, either by type of job or market definition? Is the organization in a position to remain competitive?
? What internal job equity challenges or pressures will be placed on the compensation program in the coming year?
o If a job evaluation system is used, are the factors and factor weights applicable based on current strategic direction? If not, what modifications are required?
? What employee equity challenges or pressures will be placed on the compensation program in the coming year?
o Have recent market adjustments and system modifications forgotten the employees? Are we able to attract employees without causing internal pay compression?
? What financial challenges will impede the ability of the organization to successfully fund and implement needed compensation program elements?
o Can the organization sustain past financial commitments to the compensation program? If not, how will spending priorities be set?
? What changes need to be made as to how employees are recognized and rewarded for their contributions to the organization?
o Do the current recognition and reward mechanisms work to motivate employees to contribute to the organization's strategic direction? With these questions answered, human resource next must develop a strategic response. Take the five questions above and overlay the four question survey responses. This helps to develop a strategic response to each of the five key compensation issues.
Here are basic examples of the thought process for auditing current compensation processes:
? External Equity Issues: Most effective. Continue current process.
? Internal Equity Issues: Least effective. Additional focus on internal job placement required.
? Employee Equity Issues: Least effective. Serious compression issues developed that need further action.
? Ability to pay issues: Most effective. Required funding of the program is understood and available.
? Reward and Recognition Issues: Most effective. High level of satisfaction with current performance assessment and rewards systems. With this information in hand, the final step is to create a focused strategic response to present to senior management. The result is a fresh look at your compensation program and a focused direction for the year ahead.
Michael Maciekowich is a National Director for Astron Solutions. His areas of expertise include the development, design, and implementation of executive, physician, and employee total cash compensation and performance management systems in all industries. His primary focus is the integration of compensation and human resource strategies with organization-specific missions, visions, values, and strategic operating plans. Michael has twenty-five years of consulting and industry compensation experience. He can be reached at 800-520-3889 or firstname.lastname@example.org.
Astron Solutions is a consulting firm dedicated to the delivery of HR consulting services and supportive technology. For more information about giving your compensation program a spring cleaning, please call Astron Solutions at 800-520-3889.
Does Your Company Have a Business Image Manual
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Your Babys Ugly..and Youve Got Bad Breath
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Dispute Resolution of Territory for Mobile Franchised Companies
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Business Development Is Not An Event
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Employee Email and Internet Use - A Small Business Guide
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Your Practice is Only as Valuable as Your Referral Base
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Lance Armstrong this week won an unprecedented 7th Tour de France victory, confirming him as one of the greatest cyclists of all time. The fact that he won more Tour victories than anyone else in history is remarkable. But more incredible is that had to overcome life threatening cancer to dominate the Tour de France like no other athlete has ever done. From the Lance Armstrong story, there are many lessons we aspiring business champions can learn.
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Top 10 Record Keeping Mistakes Business Owners Make (and How To Avoid Them)
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Reverse Merger: Have They Taken the Reverse out of Reverse Merger?
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But This Is Just My Opinion
Hi, Charles...here, Your Cap and t-shirt guy From Texas. How are you doing today.
Window Cleaning Business Future Challenge With Self Cleaning Glass
Self-cleaning glass has been talked about a lot, with such a catchy name in his hit the headlines of not only the trade journals, but also the mass media. Does self-cleaning glass mean that all the window cleaners and small businesses across this country are doomed? No, not yet. First of all, self-cleaning glass is not really self-cleaning at all, so many Industry call it low maintenance glass, but either way the idea is intriguing and appeals to consumers. In a recent article in Window and Door magazine, in March of 2003 the industry was asked what they thought of self-cleaning glass many of those interviewed were among the building industry, interior designers, architects, glass manufacturers, new homebuilders, tenant improvements retrofitters and window cleaning service companies. Having been watching the developments of self-cleaning windows for quite some time, we see a time when the big mirrored glass buildings will no longer need the same frequency of services. What does this mean for companies like; the Window Genie; the Window Gang; the Window Butler; and the Window Wash Guys.
Success Tips for Small Business Owners
Running a small business requires many skills. However, to do this successfully you need to organize yourself first. Avoid procrastination - read the following and take action.
Marketing a New or Small Business on a Budget
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How to Get Maximum Results With Minimum Effort
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Pressure Washing Aircraft Hangers at the Airport
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S Corporation ? What Is It?
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Dynamics of Daylight Savings Time on Service Businesses in the United States
The Dynamics of Daylight Savings Time changes the way we live and do business. What are the true dynamics of daylight Savings. It was to improve the efficiency of energy supply and demand issues originally. Does it still work for that purpose. To some degree yes. But, not as much as you think. As a matter of fact until people readjust a little it actually hurts energy costs for those cities burning coal. Some cities use fuels to power up. Nuclear is best next to hydroelectric power. Wind sounds great, but we have not perfected that and the tax write off scandalists made a mockery of what could have been great technology and environmentally sound energy. Solar, may work better more now than previously due to the Infrared knowledge and more efficient solar cells due to nano tech. Solar sounds good since it is coming from the sun or space, stuff that happened billions of years ago now reaching us in other spectrums too.
How to Promote Your Business by Entering Contests
You are probably hard at work promoting your business (and if you're not, you should be!), but if you haven't submitted your profile to any contests yet, you may be missing a golden opportunity.
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