Practical IT Research that Drives Measurable Results Craft a Compensation Strategy March 2012

Introduction In appreciation for your participation in this survey, we have created this exclusive summary of results. The data you provided is being leveraged in our research. Thank you for your participation. This document has these three main sections: Key Insights Respondent Demographics Survey Question Graphs If you have any questions or concerns please contact: Scott Koopman Panel Coordinator McLean & Company 2

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Developing a compensation philosophy is a high-return HR activity – it benefits recruitment and retention, and allows for compensation cost control. Organizations with an up-to-date compensation philosophy are 1.9 times more likely to achieve compensation success Compensation Strategy Success Compensation philosophy: stage of development ‘Compensation Strategy Success’ was computed using average agreement with the following survey statements:  We are able to attract job applicants that match our target applicant profile.  Job applicant compensation expectations are in line with what we offer.  Few job offers are rejected on the basis of the compensation we offer.  Employees rarely complain about their compensation.  Compensation is not a common reason for employees leaving.  We are able to accurately predict our compensation costs a year into the future.  We are able to control compensation costs to keep them within the set budget. Source: McLean & Company, 2012, N= 62 Why are organizations with no compensation philosophy, but who intend to create one experiencing less compensation success than organizations with no philosophy and no intent to create one? Most likely their low success prompted them to decide to invest effort in compensation planning. Why are organizations with no compensation philosophy, but who intend to create one experiencing less compensation success than organizations with no philosophy and no intent to create one? Most likely their low success prompted them to decide to invest effort in compensation planning. Surprisingly, only 26% of organizations have an up-to- date compensation philosophy. McLean & Company 4

Executives are by far the most commonly singled-out group in organizations when it comes to compensation differentiation Source: McLean & Company, 2012, N=55 Employee Groups Addressed through Segment-specific Compensation Planning Executives are the most common employee group to have a dedicated compensation plan. Not surprising given that they are generally the most difficult employee group to source and attract, as well as the highest-paid. Executives Only roughly 1/3 of organizations have a compensation plan in place for their salespeople. This is concerning because the pay of salespeople is typically heavily incentive-based and without clear articulation around incentives, risk of disengagement and turnover among this group are high. Salespeople Surprisingly few organizations reported having a separate compensation plan for their unskilled manual laborers. This may because many factories are unionized and collective bargaining agreements act as a substitute for compensation planning for covered employees. This statistic could also be skewed by respondents from organizations who do not employ unskilled manual laborers (e.g. professional services firms). Unskilled Manual Laborers McLean & Company 5

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Like this? Want more? Watch your inbox Within the coming weeks, McLean & Company will be launching several more short surveys that will offer similar results to these. If you participate, you will receive the results for every project you participated in. To ensure you are included or for more information please Scott Koopman Scott Koopman McLean & Company 20