Creating a Compensation and Budget Plan

2. Agenda Elements of Compensation
Compensation Philosophies
Position Grading
Location and Compensation
Communicating Compensation

4. How do I create a
compensation plan that is
fair, appropriate,
and consistent?

5. Paul’s Story

6. Many Overpaid Workers are Still Dissatisfied with Earnings

7. Dissatisfied Satisfied
Dissatisfied Satisfied

8. Elements of Compensation
Base Pay
Salary, Hourly
● Regulations
○ FLSA
○ State
● Market
● Business Impact
Variable Pay
OT, Bonus, Commission
● Regulations
○ FLSA
○ State
● Market
● Business Success
● Role Specific
Benefits
Cost, Value
● Regulations
○ FLSA
○ State
● Market
● Culture

9. Compliance

10. External
● Regulations
● Competitive
● Lag - Match - Lead
● Total Compensation Mix

11. Internal
● Fairness
● Consistency
● Appropriateness
● Discipline

12. Compensation
Philosophy

13. Market
Influence

14. Work/Life
Balance

15. Total Rewards
Package

17. Fairness, Consistency,
Appropriateness, Discipline

19. Position Grading

20. Consistency

21. New Positions and Backfills
● Establish base pay
● FLSA review
● Position grading
● Determine appropriate salary band
● Start hiring process

22. Skills, Location,
and Compensation

25. Training Managers
on Compensation

26. Manager’s Responsibilities
● Answer questions from direct reports
● Seek guidance from HR
● Maintain confidentiality
● Assist with position grading
● Recommend salary adjustments

27. Communicating
Compensation
with Employees

28. A study of 71,000 employees found
that clear and honest communication
about pay was a top predictor of
employee sentiment.

30. Transparency Spectrum

31. Closing Remarks

32. Questions?

33. Thank you!
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