This document discusses strategies for attracting and retaining employees on a low budget. It covers setting an appropriate compensation philosophy and structure, analyzing the market and internal pay positioning, and delivering pay effectively. The presenters advise developing a pay system that is consistent, simple, integrated, transparent and appropriately competitive. They discuss using total rewards rather than just salary to recognize value. Even with tight budgets, the key is analyzing your situation, planning realistically, and clearly communicating compensation decisions.

1. Paying People Right
How to Attract and Retain Great
Employees On a Low Budget
Guest Presenters:
Andy Rosen, Andrew Rosen Consulting
Deb Grigson, eConsulting Network
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5. Andrew Rosen Consulting
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Andy Rosen, Principal,
Andrew Rosen Consulting;
Member, Pyxis HR Consultant
Consortium
Deb Grigson, Founding
Partner, eConsultingNetwork;
Member, Pyxis HR Consultant
Consortium
Introductions

6. Andrew Rosen Consulting
Today’s agenda
 Market realities/paying people right
 Setting pay philosophy/strategy
 Building a strong pay structure
 Pay delivery: doing it well
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Competitiveness / Budget
Requirements

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Market realities

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Market increases over time…
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0.0%
2.0%
4.0%
6.0%
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12.0%
1979
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Average Increase Average Salary Structure
Average Salary and Structure Increases Over time
Source: WorldatWork – 2016/2017 Executive Report and Analysis

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Poll 1
 2017 Annual Increase Budget
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10. Andrew Rosen Consulting
Glassdoor.com: Executive Assistant
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Today’s pay and program pressures
 Compliance issues
 FLSA – Specific future unknown; some believe an increase
in the annual threshold will happen, though not all the
way to $47,476; a bill passed the House allowing comp
time in lieu of overtime…
 Employment interview pay questions – changes
encouraging equal pay? – Massachusetts, Philadelphia,
New York City, California; Washington DC considering…
 EEO-1 – proposed reporting changes aimed at reduction
in pay discrimination effective as of March 31, 2018;
being reviewed by Congress: burdensome….
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12. Andrew Rosen Consulting
Hiring…
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Source: ManpowerGroup Employment Outlook Survey Q2 2017

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Let’s get right to the punchline…

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Paying people “right”
 Consistent – systematic and well-documented
 Simple – easy to explain, understand, and act upon
 Integrated – aligned with culture and mission; flows
from business and people plans
 Transparent – available for review and scrutiny
 Appropriately competitive
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15. Andrew Rosen Consulting
Paying people “right:” nuts and bolts
 Planning
 Create/apply a meaningful reward philosophy and compensation strategy CONSISTENTLY
 Plan compensation adjustments and targets aligned with business needs – some functions/jobs
might have faster moving or higher pay schedules
 Documenting/Analyzing
 Document your job/position content
 Conduct benchmark market assessments regularly – 2 – 3 years at a minimum
 Analyze your compensation structure, internal pay positioning, and overall/job/person
competitiveness annually, and more frequently if needed
 Evaluate performance fairly, consistently, in a timely manner, and communicate effectively
 Make pay adjustments looking at the big picture, including the internal and external market,
taking into account evaluated performance and affordability; and the little picture, down to the
individual level
 Training/Applying
 Create/apply standards for hiring, promoting, providing lateral or experience-related position
changes, demotions, equity, performance evaluations, and pay adjustments
 Train managers; ensure they know how to manage pay and communicate about compensation
and performance effectively
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Compensation philosophy/strategy

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Building your compensation system
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Mission Vision
Business
Strategy
Employee
Value
Proposition
Total Rewards Compensation
Philosophy
Compensation
Strategy

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Sample labor market strategy decisions
Employee Group Market:
Organization Size
Market:
Geography
Market:
Industry
Senior Management/
Executive
Revenue/
Operating Budget
National Industry Specific (as applicable) /
General Industry
Research/
Scientific
Revenue/
Operating Budget
National Industry Specific
Management Revenue/
Operating Budget
Regional Industry Specific (as applicable)/
General Industry
Professional/
Supervisory
Revenue/
Operating Budget
Regional Industry Specific (as applicable)/
General Industry
Administrative/
Support
All Organizations (as well
as Operating Budget for
Higher Ed)
Local General Industry (for cross-industry
jobs)/Industry Specific (as
applicable)
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19. Andrew Rosen Consulting
Philosophy/Strategy - pay components
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Reward Hire Retain Engage Primary Influencer Message
Typical
Position
Base Salary X X
Competitive value;
security
Commitment to fair and
equitable workplace
50th
Percentile
Commission X X X
Performance-based
recognition
Your immediate priority; sales
vs. service
50th
Percentile +
Annual
Incentive X X X
Performance and/or
results recognition
Propose and set priorities;
demonstrate the need for
results
50th – 75th
Percentile
Benefits X X X Human value; security
The value of the whole person;
work/life At Market
Perquisites X X
Retention; recognition
of executive
Acknowledgment
of value, uniqueness
Prevalence
over 50%
Retirement X Human value; security
Retaining employee;
longevity; value of institutional
knowledge Varies

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Structure
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Salary structures
 Salary structures represent the minimum and maximum levels of pay for a
job and how that job relates to other jobs in the company.
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Unbundling the pay range
1stQuartile
Limited
experience,
skill, or
training
2ndQuartile
3rdQuartile
4thQuartile
Above
Long service
and high
performance
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Longer service
and higher
performance
exceptional
training and
experience
Fully
qualified,
company
experienced,
strong
performance
Qualified,
experienced,
knowledge-
able, still
developing
Typical hiring range – Up to the
Midpoint
$62,400 $78,000 $93,600
Minimum Midpoint Maximum
(10th % ile) (50th % ile) (90th % ile)

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Analytics:
looking beneath the surface
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0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2.8
2.9
3.0
3.1
3.2
3.3
3.4
3.5
Below First Second Third Fourth Above
1 2 3 4 5 6
Average 3 Year Performance Average Service
Below 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Above
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Performance
Service
Service and performance based on position in
band

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There’s pay and then there’s Pay…Compensation
Population
Levels

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Pay delivery
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Performance management – evolution
(revolution?) away from traditional approaches
 From dictating what employees should do at work to
helping enhance their impact and develop their skills
as individuals
 From a look back to building performance and
opportunities going forward
 From quantitative annual rankings and specific
formula between performance and pay to more
nuanced approaches
 From once-a-year assessments to more frequent
conversations, feedback opportunities
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28. Andrew Rosen Consulting
Poll 2
 Pay for Performance?
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29. Andrew Rosen Consulting
Increases: typical and alternative
Performance Annual Increase
Above 7% 6% 5% 4% 2% Lump Sum
Meets 5% 4% 3% 2% 1.5% 0%
Below 0% 0% 0% 0% 0% 0%
Position in Band Below 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Above
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Annual Increase
0% - 7% 0% - 6% 0% - 5% 0% - 4% 0% - 2% Lump Sum
Position in Band Below 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Above
2. Alternative: Guidance on position in band freedom to vary on performance; budget is still 3%
1. Typical Matrix: Guidance on position in band based on performance; budget is 3%

30. Andrew Rosen Consulting
Increase options for low budgets and merit
increase-weary warriors
 Distribute the budget evenly (maintains inequities)
 Eliminate the increase for the majority (pay freeze)
 Focus on the broader value proposition (what else
do you have to offer – Total Rewards?)
 Provide increases only for market gaps and
performance-based payments using only variable
dollars
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31. Andrew Rosen Consulting
Summary and questions
 In summary – budgets are tight
 Analyze where you are, plan for where you want to be,
and make a realistic plan to get there…
 Be consistent
 Always consider what, how, and when to
communicate…and to whom
 Questions?
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Contact information
Deb Grigson
(e) deb_grigson@econsultingnetwork.com
(p) 484.883.0318
Andy Rosen
(e) andy@andyrosen.net
(p) 610.299.0904
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Cover photo by landscape photographer Jack Zigon at www.jackzigon.com