1. Employee Compensation Planning
Presented By:
Jonathan McQuade
The Ensemble Practice LLC
ACR#88575

2. Compensation Planning Process
Define compensation philosophy
Benchmark compensation
Analyze benchmark results
Confirm roles and responsibilities
Set or review individual compensation
Review total firm compensation costs

3. What compensation planning is not
Important Points
What compensation planning is not
black and white
a comprehensive employee management tool
a sole driver of employee performance
So…what is it??
creates consistency and communicates expectations
determines whether incentives are driving performance
measures firm’s position and competitiveness with labor market
review of firm’s compensation costs and other related variables

4. What is Compensation Philosophy?
A statement similar to the strategy or “value proposition” of a firm.
Should tie in with strategy
Describes how compensation works in a firm and what principles govern compensation decisions
Should be clear enough to where it can be applied in practical situations without ambiguity
Print out Fusion compensation philosophy

5. Components of Compensation
Compensation positioning in relation to industry
Factors driving base pay compensation
Tenure and loyalty
Degrees and designations
Responsibilities
Experience
Performance
Incentive compensation
Benefits
Long term compensation

6. How to Use the Tool: A short demonstration

7. Incentive as % of Total Comp
Admin Staff %
Support Staff %
Advisor Staff %
Business Developers 30%+
Management Staff %
(Does not include ownership returns)

8. Examples of Targets for Incentive Pay
Support Staff
Professionals
3 or less NIGO’s
High level of client service
Attend training and demonstrate knowledge
Responsive to lead advisors
Support firm projects
98% Client retention
5 new qualified clients
8 referrals from existing clients
Good client survey results

9. Questions to Consider
How do I want my employees to behave and does their compensation help drive that behavior?
Are we appropriately using incentive and bonus pay? What does it achieve and is it measurable?
Is the compensation plan affordable for the firm?
What is the firms philosophical stance of the role compensation plays and is it communicated to employees?

10. Well thought out compensation plan needs:
In Review
Well thought out compensation plan needs:
Compensation philosophy
Awareness of position in relation to current labor market pay
To be affordable to firm
Should result in:
Consistency
Alignment of expectations between staff and firm
Appropriate use of extrinsic motivator to reward behavior and performance