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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 email@example.com.
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
Cash flow. To stay in business, you've got to keep a steady stream moving through your company.
Employee Email and Internet Use - A Small Business Guide
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Your Practice is Only as Valuable as Your Referral Base
Many physical therapists in private practice have the appearance of a very successful business that is built on the backs of about four to five doctors. Now if anything would happen to any of these guys, the value of these practices would drop markedly. How can you run a practice for many years and then take a good look at it and realize that you have five doctors that represent more than 50% of the referral base? Exactly how can that happen?
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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.
Home Based Franchise Case Study
Here is an interesting case study of a company, which franchised mobile car wash units. It started with the humblest of beginnings indeed. I can say that with complete knowledge because this is a company I started at age 12 years old. It was not until I was nearly 32 years old that we franchised my business. This franchise was great in concept but franchisees would not follow the system enough, they deviated from the plan in most cases. The franchisees that stayed with the plan did very well, the ones who did not, did okay, but could have done better.
Top 10 Record Keeping Mistakes Business Owners Make (and How To Avoid Them)
If you interviewed business owners of failed businesses, a majority will tell you that they didn't understand or feel comfortable dealing with the "book work". Your ability to understand and perform day to day accounting tasks in your small business is a critical success factor. Here are some tips to help you avoid the most common mistakes business owners make.
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
There are almost as many opinions and views on marketing as there are companies to market. The big names and multinationals will have an extraordinary amount of funding set aside in which to convey their marketing message to the masses.
How to Get Maximum Results With Minimum Effort
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Pressure Washing Aircraft Hangers at the Airport
If you are looking for a way to own your own business using a pressure washer or expand your current pressure washing business you might consider cleaning Aircraft Hangers out at the airport. Why Wash Aircraft hangers? For one it can lead to much more work cleaning all sorts of things at airports which is an encapsulated market. Larger airports have terminal buildings, staging areas, parking structures, fuel depots, retaining walls, security vehicles, airport shuttles, rent-a-cars and of course aircraft. If you get a job cleaning a hanger or several you will be seen by others who need services desperately.
S Corporation ? What Is It?
For many small businesses, the "S" corporation is the business entity of choice. The "S" in S corporation refers to a tax designation. All corporations are created the same way under state law. A small business must then chose a tax status, to wit, "C", "S" or non-profit. Important issues concerning S corporations are covered in this article.
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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