Salary & Benefits Benchmarking

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Presentation transcript:

Salary & Benefits Benchmarking April 18, 2018

Question Do you pay competitive salaries and benefits for your employees? Yes No ?

Underlying Principles 1. Internal Equity 2. Competitiveness 3. Meritocracy 4. Return on Investment

Internal Equity

Competitiveness

Meritocracy

Investment Return on

Salary & Benefits

What is Benchmarking? The process of measuring the performance of a company's products, services, or processes against those of another business considered to be the best in the industry, or “best in class.” Thru measurement and acceptable quantitative methods, the objective of benchmarking is to identify internal opportunities for improvement.

Benchmarking Guidelines What is your company? Which industry do you belong? BPO? Banking? Mining? Manufacturing? Etc. What is your company size? Revenue Size Employee Size Which companies are your target comparators? Direct competitors from the same industry Customized target comparators Functional Benchmarking Guidelines Internal equity guidelines Job Evaluation, Global Job Grading System Functional Disciplines Sales, Operations, Finance, IT, HR, Marketing, Supply Chain etc.

Components of Total Rewards Level One: Annual Base Salary 12 months Level Two: Guaranteed Pay The Annual base salary plus all fixed and guaranteed bonus (Example: 13th, 14th month etc.) Level Three: Benefits and Perks Guaranteed pay plus the monetized value of all benefits and perks such as HMO, VL and SL, allowances such as rice, meal, clothing, communication and etc. plus other perks such as car, club membership if any.

Components of Total Rewards Level Four: Variable Pay Any compensation of a variable or discretionary in nature. Items included here are commissions, sales incentives, profit shares, performance bonuses, management incentives and etc. Level Five: Total Annual Compensation (TAC) Sum total of Level one to Four

Analysis of Total Rewards What is Compensation Mix? Compensation Mix or Pay Mix measures the ratio of Base salary, benefits, guaranteed pay and variable pay or performance bonuses to total compensation or TAC. Analysis of Compensation Mix Ratio of Base Salary to TAC Ratio of Guaranteed Pay to TAC Ratio of Benefits and Perks to TAC Ratio of Variable Pay to TAC

Analysis of Total Rewards What is Compa-Ratio? Index of measurement to determine the competitiveness of a given salary with respect to its “Market Data Point” or MDP. 100% compa-ratio indicates that a given salary is competitive. Formula: Present Salary/Desired MDP Analysis of Compa-Ratio Base Salary to Base Salary of Target MDP TAC to TAC of Target MDP

Example: Analysis of Compensation Mix and Compa-Ratio PMAP CR&P - Salary & Benefits Benchmarking Webinar - April 18, 2018.xlsx

The 2018 PMAP Salary and Benefits Survey: PMAP CR&P - 2018 PMAP Salary & Benefits Survey Flyer.jpg

The 2018 PMAP Salary and Benefits Survey: PMAP CR&P - 2018 Salary & Benefits Survey - Report Outline.docx

The 2018 PMAP Salary and Benefits Survey Questionnaire: PMAP CR&P - 2018 Salary and Benefits Survey Questionnaire.xlsx

Q and A

Thank You!