HR Wave - Human Resources Consulting

Compensation is much more than deciding to pay employees the going local rate for their contribution to the organization. There are many questions that need to be addressed before beginning the process of analyzing and implementing a compensation strategy and structure.

Starting with a compensation philosophy, does the organization wish to pay the talent above, below or at market? Is the compensation philosophy structure equal across the organization? Does the organization need a demographic or regional structure or are the competitors in a different demographic? How does the organization want to address cost of living locally for comparable position regionally?

Traditionally, organizations that pay above market experience low turnover and higher productivity and organizations that pay below market experience high turnover (which may be intentional for growth, reorganization or industry trends), along with lower productivity and other inappropriate behavior. Organizations that pay at market tend to experience both tenure and turnover yet spend more time hiring quality talent that possess the dedication to remain loyal when contacted by a recruiter. There are pros and cons to all of the above.

These and other questions are imperative to the success of the project and ultimate success of the organization’s compensation program(s) and employee satisfaction.

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Proposed Compensation Analysis Functions:

Glossary of terms:

EEO - Equal Employment Opportunity	FLSA - Fair Labor Standards Act
DLSA - Day and Temporary Labor Service Act	DOL - The Department of Labor
ADEA - Age Discrimination in Employment Act	EPA - Equal Pay Act
ADA - American Disability Act	CRA - Civil Rights Act


Compensation Structure Analysis: Including Local, State and Federal Law

o Identify all employee compensation (Corporate and Nationally) (10-12 Hours)
		- Annual salaries	- Bonuses
		- Incentives	- Commissions
		- Stock	- Other forms of pay

o Interview department teams and select employees (Corporate) (50-60 Hours)
	To determine:
		- True job description	- Skill
		- Effort	- True responsibility
		- True working conditions	- True job title

o Analysis of all employee compensation (Corporate and Nationally) (60-80 Hours)
	Analyze current compensation philosophy
	Analyze job descriptions including:
		- Skill	- Effort
		- Responsibility	- Working conditions
		- Education	- Experience
	Identify discrepancies within the current plan (Corporate)
	Identify like positions within the company (Corporate) (CRA)
	Comparison within like positions (Nationally) (CRA)
	Identify discrepancies within like positions (Nationally) (CRA)
	Identify discrepancies with State and Federal mandates (EEO - FLSA - DLSA - ADA - EPA - ADEA)

o Analysis of Vertical Market (Corporate and Nationally) (40-50 Hours)
	Identify competition compensation plan including:
		- Competition	- Competition
		- Competition	- Others
	Comparison of like positions within the vertical market (Corporate)
	Comparison of like positions within the vertical market (Nationally)

o Travel for above analysis (Corporate and Nationally) (50-55 Hours - Per location - if applicable)
	Research select site to determine:
		- Vertical market	- Market location
		- Size and productivity	- Comparison within local market
	Interview select site employees to determine:
		- True job description	- Skill
		- Effort	- True responsibility
		- True working conditions	- True job title

Areas of Compensation Analysis Planning:

o Design of proposed Compensation Plan (Corporate) (15-20 Hours)
	Create compensation matrix for all employees
	Create bonus and incentive plan for all employees
	Create commission plan for applicable employees

o Design of proposed Compensation Plan (Nationally) (15-20 Hours)
	Create compensation matrix for all site employees
	Create adjusting percentage scale for variables by state
	Create bonus plan for applicable employees
	Create bonus adjusting percentage scale for variables by state
	Create incentive plans for productivity including:
		- Incentives for top producing sites	- Incentives for top producing employees
		- Other incentives	- Percentage scale variables by state

Areas of Compensation Analysis (Other):

	Meet with Client and others regarding project (5-10 Hours)
	Meet with other colleagues regarding market research (2-6 Hours)
	Obtain State and Federal mandates for compensation nationally (2-4 Hours)
	Unforeseen issues (16-20 Hours)
	Create proposal (2-4 Hours)

List of Collect:

	All Compensation information for all employees (Current and historical)
	Job descriptions for all positions (filled or not)
	All locations and list of it's employees, titles, length of tenure, education and experience

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