Path to pay for performance

The Path toPay for Performance

Joe BrownSlope Resources

Nonprofit HR SymposiumSan Diego, CA

June 16, 2010

Founded in 1998

Human resources and organization managementconsulting services for nonprofits

Compensation and performance management

“Big firm” background

Blog: Done by People

How many utilize…

Formal pay for performance program

Formal, non-performance-based compensation program

Informal/ad hoc compensation practices

Where are you?

?

Barriers to pay for performance?

Building blocks

Rewardopportunity

Compensation program

Internal equity

Market competitiveness

Performance management program

Individual/team contribution

Base salary

Incentive compensation$Actualrewards

Performance

What…

Job responsibilities

Goals

…how

Competencies

Expectations

Performance management program essentials

Focus on “management”…

…not “evaluation” or “rating”

Emphasize communication…

…not the form

Keep it simple…

…and make it fit

Performance management program essentials

Communication and input

Job descriptions

Employee ► manager ► HR

Grouping/grades

Assess internal equity

Compensation program development

$0

$20

$40

$60

$80

$100

Job Size

Co

mp

ensa

tio

n

Identify markets

Assess market competitiveness

Published surveys

Custom surveys

Informal data collection

…caveat emptor

Compensation program development

Articulate compensation philosophy

What does the organization pay for?

What values should be communicated and reinforced?

In what forms is compensation delivered?

What budgetary constraints are reflected?

How competitive should compensation be?

With what market(s)?

Compensation program development

Develop salary policy

E.g.: median of metro area organizations with operating budgets of $5 million to $10 million

Costs

Under minimum

Equity increases

Short-term/long-term targets?

Compensation program development

Construct salary ranges

Compensation program development

Minimum(80%)

Maximum(120%)

Midpoint(100%)

Performance over time

Low HighAverage

Hiring range

Salary administration guidelines

New/changed jobs

Promotions

Hiring

Over maximum

Implementation

Communication and feedback

Compensation program development

Merit increases

Performance evaluation

Position in salary range

Merit increase

0%0%0%Unacceptable

0%2%3%Below Requirements

2%3%4%Successful

3%4%5%High

4%5%6%Exceptional

>110%90% - 110%<90%Performance evaluation

Position in salary range

0%0%0%Unacceptable

0%2%3%Below Requirements

2%3%4%Successful

3%4%5%High

4%5%6%Exceptional

>110%90% - 110%<90%Performance evaluation

Position in salary range

Merit increase grid (example)

Periodically…

Review internal equity and market competitiveness

Adjust salary ranges

Ensure alignment with compensation philosophy

Compensation program management

Continue building

Strategicplanning

Non-cashrewards

Professional development

Career development

Succession planning

Joe BrownSlope Resources

jbrown@sloperesources.com

908 241-8592

sloperesources.com

twitter.com/joe_brown

Thank you!