Rewarding Staff w/o Breaking the Bank
1
Pay Model / Total Rewards
2
Pay Philosophy
Lowest
Pay
Possible
Highest
Pay
Possible
COLA
Pay
Pay
Philosophy
Low Pay
– High
Benefits
3
Pay Philosophy –
Market Based Pay Philosophy
• Examines four key principals
– External Equity – what are employees paid in the
market place for similar jobs
– Internal Equity – are the pay scales for similar jobs
alike
– Employee’s Performance – Performance Criteria
– Organization’s ability to pay
4
External Competiveness
• Non Profit / For Profit
– Candidate Pool –where do you find candidates to fill
your positions?
– Where could current staff members work (for profit /
non profit)?
5
External Equity –
Market Pricing
• Minnesota Nonprofit Salary and Benefit Survey
• Salary.com (IBM owned) Nonprofit / For Profit
Survey Data
• Towers Watson
• Aon - Hewitt
6
External Market Matches
• Market match the job to the survey
• Not all survey data is alike
• Match the duties to the survey – don’t get hung
up on the title
7
Survey Data
MN Non Profit Survey –
2014
Salary.com Survey - 2014
Title
Program Director
Program Director
Position
Description
Manages all programs related to the
organization’s mission and either
directly or indirectly manages all
program staff. Analyzes community
needs to develop new programs and
enhance current programs…….
Supervises and implements a non-profit
organization's programs. Organizes and
oversees fundraising events. Responsible for
budgeting and community outreach.
Assesses needs and ensures that program
objectives are met……..
50th %
$71,156
$77,500
# of Organizations
Participating in
Survey
65
Over 100
# of Incumbents
178
Over 700
Data Collection
Twin Cities
Twin Cities
Survey
Information
8
Survey Data Levels
• All jobs have different levels
– Management, Professional, Support Staff
•
•
•
•
•
•
Entry
Intermediate
Career
Specialist
Master
Guru
• Ensure the market match matches the level
9
Leveling Charts
10
Analyze your Data
• # of organizations and participants
• Job Levels –
– MN Non Profit Survey – Account (CPA) – One Level
$53,136
– Salary.com – Three Levels
• Accountant I: $47,282
• Accountant II: $57,130
• Accountant III: $70,297
• Develop the market median best for your
situation
11
Make your Match
• Match your jobs to the market data
• Not a perfect match – group matches and take
an average
Market Median /
Mean
80%
120%
12
Internal Equity
• Three people in the same job (Robert, Beverly,
and Ted)
• Ted is making 20% more than Robert & Beverly
• Is anyone in a protected class?
• What created the salary discrepancies
(performance, time in position, level of
position)?
13
Performance Criteria
• Performance Reviews
– Capture objective performance criteria
– Set employee up for success the next 12 months
• Varies scales can be used
–
–
–
–
–
Consistently exceeds expectations (5)
Often exceeds expectations (4)
Fully meets expectations (3)
Occasionally below expectations (2)
Consistently below expectations (1)
14
Organization’s
Ability To Pay
• What can the organization pay?
• Establish the pool of dollars for pay increases
• What other employee paid factors come into
play?
15
Salary Planning
•
•
•
•
•
•
Market Match
Internal Equity Check
Pay for Performance Model
Budget Amount Known
Pay for Performance Reviews
Terminology
– Performance pay (is this a bonus or salary increase)
16
Rewarding
• Developing Performance Criteria
• Increase scale is based on ability to pay and
market trends
2015 Salary Increase Guidelines
Less than 80%
Compa-Ratio
80-120%
Compa
Ratio
Over 120%
CompaRatio
Outstanding Performance - 5
4 - 5%
4 - 8%
2 - 4%
Exceeds Expectations - 4
3 - 5%
3 - 5%
0 - 3%
1 - 2.8%
0 - 2.8%
0%
0 - 2%
0%
0%
0%
0%
0%
Good Solid Performance - 3
Improvement Required - 2
Unsatisfactory Performance - 1
17
Pay Practice
• When do you reward – Focal Point Review or
Employee Anniversary Date
Pros
Cons
Focal Point
Review
Easy to distribute Time consuming
salary pool based
on performance
Employee
Anniversary Date
Easier to
schedule
Harder to
determine % of
salary increase
18
Compa-Ratio
• Compa-Ratio is a tool that allows you to see
where the employee falls in comparison to their
market match (external market place).
• Salary/Market Median or Market Mean
19
Practice
Organization: Eating Healthy in Minnesota
• Employees: Five Employees
• Revenue Generation: 15 million
• Project Revenue next year: $16 Million
• Salary & Incentive Budget: 4% Salary;
1% Incentive
20
Employee Population
Name
Title
Annual Salary
Market Data
Compa-Ratio
(Salary/Market
Data)
Robert
Executive Director
$120,000
$120,000
1.00
Beverly
Program Manager
$38,000
$48,797
0.78
Ted
IT & Web
Manager
$50,000
$48,613
1.03
Susan
Grant Writer
$60,000
$50,000
1.20
Kevin
Secretary
$30,000
$31,803
0.94
Total Salary
$298,000
4% Salary Pool
$11,920
1% Incentive Pool
$2,980
21
2015 Salary Increase
Guidelines
2015 Salary Increase Guidelines
Less than 80%
Compa-Ratio
80-120%
Compa Ratio
Over 120%
Compa-Ratio
Outstanding Performance - 5
4 - 5%
4 - 8%
2 - 4%
Exceeds Expectations - 4
3 - 5%
3 - 5%
0 - 3%
1 - 2.8%
0 - 2.8%
0%
0 - 2%
0%
0%
Good Solid Performance - 3
Improvement Required - 2
22
Performance Scale
Performance Scale
• 5 - Consistently exceeds expectations
• 4 - Often exceeds expectations
• 3 - Fully meets expectations
• 2 - Occasionally below expectations
• 1 - Consistently below expectations
23
Performance Worksheet
Name
Title
Robert
Executive
Director
Program
Manager
IT & Web
Manager
Grant Writer
Secretary
Total
Beverly
Ted
Susan
Kevin
4%
Current
Salary
$120,000
Perf.
Rating
4
% Inc.
Increase
Amount
New
Salary
Market Data
$38,000
3
$48,797
$50,000
5
$48,613
$60,000
$30,000
298,000
3
3
$50,000
$31,803
Updated
Compa
Ratio
$120,000
$11,920
24
Questions
• Kathy Smith
–
–
–
–
Partner HR Service Team
www.hrserviceteam.com
763-432-5633
[email protected]
25