Categories - Compensation

I recently heard a story about a troubled HR manager who was in the market for a compensation system. She had been comfortably working in a jumble of spreadsheets for quite awhile – until she ran into some major legal problems. With no knowledge of the kinds of systems that are available, she hired a costly consultant to make the decision for her.

I’ve heard a handful of similar stories over the past month about HR professionals who are technology adverse. In this digital age, and with so many great HR tools available, I’m a bit surprised and worried, so I thought I’d address a few possible reasons for this technophobia.

Some people don’t understand technology. Sometimes I find it hard to imagine that the Internet and personal computers didn’t always exist. We often take for granted the great innovations that we work with every day, but it wasn’t long ago when employees weren’t tech savvy because they didn’t have to be to be productive. Many people in today’s workforce weren’t required to be masters of technology for most of their careers, but they now find themselves at a disadvantage to workers who grew up with technology at their fingertips. To succeed in the modern day workplace, these veteran employees need to adapt by embracing and understanding technology, or they will be quickly replaced by those who already do.

Haven’t gotten around to designing your 2010 comp plans yet? You are not alone.

Sales execs are telling us that they are busier than they expected. Demand is increasing, sales team resources are being stretched, and there isn’t a minute to sit down and come up with new plans.

But if you don’t carve out some time now, you’ll be playing catch up the rest of the year, and you will leave money on the table. Here’s why:

- This year promises to bring its own set of challenges and opportunities. Your revenue and profit goals reflect your expectations for 2010. But you won’t achieve them if your sales comp plans are designed to meet 2009 goals and conditions.

- A new year gives you the opportunity to improve on your sales plans – align them better with your goals, and make them clearer for your sales reps to understand.

- New and improved plans will help inspire trust in management and the organization. And by giving your team clear direction, you motivate your reps to greater achievement.

Great sales comp plans provide a great evaluation and management tool. If you don’t spend some time now developing a good plan, you will spend much more time the rest of the year figuring out how to evaluate your reps’ performance.

If you are not sure how to get your sales comp plan process started, no worries. Join us for a webinar on February 2, and we’ll take you through the process, step by step. With our approach, you’ll be creating plans in minutes.

Recently a colleague forwarded me a study on geographic differential practices. According to this study, more than two-thirds of companies who use these differentials (to compare relative pay levels across locations) review them annually. This statistic wasn’t surprising to me, but it did remind me that it’s time for us here at Salary.com to review and update the differentials used in CompAnalyst Market Data.

As I was gathering the data needed for our analysis, I wondered what impact the economy would have on the differentials. We’ve given so much thought to the impact of the economy on wages overall, but less consideration to the impact on wages in specific locations.

Please give us your opinion in a short, four question survey – what impact will the economy have on geographic differentials? We'll publish findings, and I'll share my own thoughts on the matter, on these pages in the next couple of weeks.

Take the survey >>

A dirty little secret about the current economic downturn is that it provides companies with an opportunity to make changes that otherwise would have been difficult.

Promoting employees without giving them a salary increase is one example.

Can’t do that, you say? Employees would never stand for it?

“That’s not the way we handle things around here?”

The fact of the matter is, for the majority of companies competing in today’s challenging environment, a number of rewards are offered to full-time, regular members of the workforce, including eligibility for both a regular bonus and an equity grant.

I can’t keep up anymore.

One day the economy is up, the next day it is down. One month job losses are steady, the next they’re higher than expected.

We hear the economy has turned the corner, only to be warned that it might be a temporary thing. For the past 18 months, it has been a wild roller coaster ride, and I think most everyone would agree that the ride isn’t over yet.

For human resources departments, it’s been trying times as they work to balance organizational and business pressures with the needs of a stressed and fragile workforce. I think the next few months are going to push HR folks even more, as an increasing number of their employees express discontent over their pay.

The Securities and Exchange Commission announced on December 14 that it is re-opening the comment period on its proposal to allow shareholders to nominate directors to corporate boards. The SEC intends to make its final recommendations early this year.

Under the proposal, companies would be required to include in their proxy statements information on proposed shareholder nominees and to include names on the proxy card. Nominating shareholders would need a minimum ownership percentage of 1-3 percent for large accelerated filers and 5 percent for all others. Those shareholders would need to provide notice to the SEC of their intent to include a nominee.

Reading all the headlines about excessive variable pay in the financial services industry started me thinking about variable pay trends for the rest of us. With 2009 drawing to a close, I took a look back at data for all US organizations in the two most recent years of Salary.com’s National Salary Budget Survey to see what kind of bonuses we could expect to be paid in 2009.

It turns out that, unless you’re an executive, your chances of being eligible to receive a bonus are decreasing:

Last week Mark Szypko (pictured right), one of our global compensation experts and a frequent blogger, hosted a webinar on how global high-tech organizations are managing compensation in a challenging economy. The audience was comprised of compensation and HR practitioners from 40 organizations across the United States. Mark covered a number of topics, and here are a few key takeaways based on the polls we conducted during the webcast:

- Nearly half the participants feel that based on what they are seeing in their own organizations, the economic downturn has begun to subside. It wasn’t a majority, but I still find this optimism promising…

- Among organizations still giving increases, the increases delivered in 2009 lagged original projections by an average of 2 percent around the world, with the biggest lags coming from some of the Latin American countries such as Argentina and Venezuela, and other emerging markets like Vietnam and the Ukraine.

The Securities and Exchange Commission last week finalized revisions to its proxy disclosure requirements. Many thought - or shall I say hoped - that with the 2010 proxy season so soon upon us, changes would not be put through. But these disclosure changes were outlined by the SEC in an open meeting last week, so hopefully filers have been keeping up and preparing to comply - just in case.

New rules (outlined here) will require additional or more specific information disclosure regarding risk, director qualifications and selection process, board structure and compensation consultant usage, and faster reporting of voting results. Most of these changes should not require significant adjustments on the part of filers.

Compensation professionals will be wise to keep close watch on the continuing debate about the United States’ national healthcare policy, as there are some key policy changes that would impact how businesses manage compensation and remuneration and use benefits as tools to recruit and maintain their workforce.

Whether your organization makes the effort to calculate total remuneration – compensation plus benefits valuation – or just want some semblance of how your organization stacks up in the market, this federal change would likely have a major impact in both the short and long term.

If standardized benefit plan designs of any fashion hit the market, this will create less differentiation between the plan valuations that we now see in the marketplace. This will leave supplemental benefits and compensation as the variables for total remuneration, and supplemental benefits typically do not carry high valuations. This will cast an even greater light onto the comp function to create differentiation for the employee population, as if there wasn’t already enough pressure to do more with less!  Long term, healthcare reform may also lead to legislative changes along the retirement defined contributions and benefits as well as LTI reform.

So as you watch the evening news, remember you now have more than one reason to pay attention, since more attention may be on you!