1. Presented by Julie Caspar

2. Cris Wildermuth, Ed.D., SPHR Assistant Professor Drake University Adult Learning & Organizational Performance cris.wildermuth@drake.edu

4. Use the question & answer feature Participate in polls

7. Julie Caspar President, HR Hotline Ankeny, Iowa (515) 635-0180 julie@hrhotlineinc.net www.hrhotlineinc.net

8. Welcome Defining Compensation Business Strategy and Compensation Philosophy Compensation Specialties Additional Strategic Considerations Cases End Session

11. TRUE or False: – Compensation is cash provided by an employer for services rendered Answer TRUE

12. TRUE or False: – At the beginning of the 20 th century the focus of compensation was pay for work; by the end of the 20 th century the focus of compensation was more on pay for results. Answer TRUE

13. At its most fundamental level… Compensation is pay for work

14. Compensation Evolution Domestic Competition 1900 2012 Global Competition Pay for Work Passage of Fair Labor Standards Act (1938) Benefits (Compensation) Drive Performance Longer Term Strategy Achievement & Pay Equal Pay Act (1963) Equity Merit Ongoing Legislation e.g. Lilly Ledbetter Davis-Bacon Act 1931 Pay for Results Total Rewards American Compensation Association (1955) Work-Life Balance Development

15. ACA American Compensation Association WAW WorldatWork

16. TR Model: Created by WorldatWork © 2007

17. Cash provided by an employer to an employee for services rendered. Cash is comprised of …. Compensation is …

18. Base Pay Wages Salaries

19. Variable Pay Bonuses Incentives Stock Options “At Risk”

21. Focus of compensation today? MARKET-BASED

22. INTERNALLY EQUITABLE

23. PERFORMANCE DRIVEN

24. Where Compensation and the Business Imperative Meet

25. Vision & Mission

26. Goals

27. Strategically Aligned Compensation Objectives Legal compliance Cost effective Internally, externally, and individually equitable Drives performance and results

28. Compensation Philosophy

29. Seniority Basis Across-the-board raises Pay scales raised annually Industry comparisons of compensation only Holiday Bonuses No raises for length of service No raises for longer service poor performers Market adjusted pay structures Broader industry comparisons Bonuses tied to performance results Compensation Philosophy Continuum Entitlement Performance Mathis, R.L. & Jackson, J.H. (2006). Human resource management 11th edition. Mason: Thomson South-Western.

30. What is your compensation philosophy like?

32. Compensation Goals

33. Market Positioning

35. At Market Compensation programs are valued within close proximity to market. Lag Compensation programs are at an affordable level for organization. Takes advantage of abundant supply of potential employees in a loose labor market. Lead Paying for higher qualified, more productive workers by positioning pay above market.

36. Compensation Mix

37. Performance Based

38. Alignment

39. Decision Making

40. Communications

41. Changes

42. Compensation Philosophy Should include….

44. Pay level position against competitors (or market)

45. Amount of fixed vs. variable pay

46. Balance between external vs. internal equity

47. Link to business strategy

48. At what market level does your organization position your compensation programs?

49. Surveying the Market

50. International Sales Executive General o Base o Incentive Compensation Specialties

51. Additional Compensation Considerations

52. Competency Based Pay

53. Individual vs. Team Rewards

54. Pay Openness vs. Secrecy

56. Equity

57. Job Leveling / Pay Structures

59. Compensation Programs “Fitting” into the bigger picture

60. Research milestone achievements Case 1

61. Case 2 Power Company Skilled Worker Retention

62. Take Aways

63. Compensation is cash provided by an employer to an employee for services rendered. Compensation is one of multiple variables of what may drive a business strategy based on the Total Rewards Philosophy.

64. A clear depiction of company mission, vision, and goals need to be made before a strategic compensation plan / program can be developed. A compensation philosophy is critical to the successful alignment of the business strategy.

65. Organizations need to decide whether their compensation programs are to be more entitlement or performance based and how either will advance the business strategy.

66. There are multiple and various considerations to be made in determining compensation programs that will ultimately lead to business achievement.

67. Julie Caspar President, HR Hotline Ankeny, Iowa (515) 635-0180 julie@hrhotlineinc.net www.hrhotlineinc.net

68. Presenter: Jennifer Soma Title: Career Development and Happenstance Date: December 12, 2012 Time: 12:00 PM - 1:00 PM CST Register: https://www3.gotomeeting.com/register/176 333630