All you need to know about pay in late 2015 by Toronto Training and HR September 2015
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All you need to know about pay in late 2015
by Toronto Training and HR
September 2015
CONTENTS3-4 Introduction5-6 Definition7-8 Elements of pay structures9-10 Pay compression11-15 Linking pay to competencies16-18 Pay progression and pay structures19-20 Building pay grades and salary ranges21-22 Performance-related pay22-23 Extroverts and introverts23-25 Ways in which employees may be paid26-27 Factors that influence pay raises28-30 Reasons for dissatisfaction with a pay raise31-33 Reasons for satisfaction with a pay raise34-36 Explanations given to employees about the pay decision37-38 Recognizing all parts of total rewards39-40 Assessing the suitability of an employee for a raise41-42 Myths around equal pay43-44 Tests around equal pay 45-46 What does a top 100 CEO earn in Canada?47-48 How much should I pay?49-50 Conclusion, summary and questions
Page 2
Page 3
Introduction
Page 4
Introduction to Toronto Training and HR
Toronto Training and HR is a specialist training and human resources consultancy headed by Timothy Holden
10 years in banking
15 years in training and human resources
Freelance practitioner since 2006
The core services provided by Toronto Training and HR are:
Training event design
Training event delivery
HR support with an emphasis on reducing costs, saving time plus improving employee engagement and morale
Services for job seekers
Page 5
Definitions
Definitions• Pay
• Compensation
• Reward
Page 6
Page 7
Elements of pay structures
Elements of pay structures
• Pay schedules
• Pay grades
• Pay ranges
Page 8
Page 9
Pay compression
Pay compression • Definition
• Root causes
• Consequences
• Steps involved in auditing for compression
• Challenges in auditing for compression
• Solutions
Page 10
Page 11
Linking pay to competencies
Linking pay to competencies 2 of 4
• Essential competencies
• Differentiating competencies
• The iceberg model of competencies
• Questions to ask
Page 13
Linking pay to competencies 1 of 4
• Skill-based pay
• Team-based programs
• Traditional compensation systems
• Predictors of superior performance
Page 13
Linking pay to competencies 3 of 4
Designing and implementing a competency model
• Core competencies & strategic context
• Identify sample of superior performers
• Collect data
• Design, validate and communicate models
• Evaluate individuals based on competencies
Page 14
Linking pay to competencies 4 of 4
Alternative approaches
• Define how pay will be linked to competencies
• Salary structure
• Promotional increases
• Annual salary increases
• Merit pay
• Incentives
Page 15
Page 16
Pay progression and pay structures
Pay progression and pay structures 1 of 2
• Definitions
• The impact of pay structures
• Objectives of pay structures
• Types of pay structures
• Issues in introducing or replacing pay structures
Page 17
Pay progression and pay structures 2 of 2
• Factors contributing to local pay variation
• Methods of determining pay progression
• Techniques to control pay progression
Page 18
Page 19
Building pay grades and salary ranges
Building pay grades and salary ranges
• Identify multiple schedules
• Determine pay grades
• Develop ranges
• Assign grades to positions and adjust for internal equity
Page 20
Page 21
Performance-related pay
Performance-related pay
• Definition
• Objectives of performance-related pay
• The pay review process
• Issues when implementing performance-related pay
Page 22
Page 23
Ways in which employees may be paid
Ways in which employees may be paid 1 of 2
• Based on how well I perform
• Linked to inflation/ cost of living
• Based on my experience
• Linked to the going rate for the job that I do
• Linked to how well my organization performs
Page 24
Ways in which employees may be paid 2 of 2
• Based on how long I have worked for the employer
• Linked to how well the team or department performs
• Based on a trade union negotiated deal
• Based on how old I am
Page 25
Page 26
Factors that influence pay raises
Factors that influence pay raises
• Market
• Proficiency
• Performance
Page 27
Page 28
Reasons for dissatisfaction with a pay raise
Reasons for dissatisfaction with a pay raise 1 of 2
• It did not keep pace with increases in the cost of living/inflation
• It did not reflect how well I had performed at work
• My pay is below what I could get elsewhere for doing the same job
• It was below the pay increase of senior management
Page 29
Reasons for dissatisfaction with a pay raise 2 of 2
• It did not reflect the state of the economy
• It did not reflect my experience
• It did not reflect how much money the organization had to make a pay award
• It did not reflect how well my team has performed at work
Page 30
Page 31
Reasons for satisfaction with a pay raise
Reasons for satisfaction with a pay raise 1 of 2
• It reflected the state of the economy
• It reflected how well I had performed at work
• It was more than I received last year
• My pay is at or above what I could get elsewhere for doing the same job
Page 32
Reasons for satisfaction with a pay raise 2 of 2
• It kept pace with increases in the cost of living or inflation
• It reflected how much money the organization had to make a pay award
• It reflected my experience
• It did not discriminate against me because of my minority background
• It reflected my length of service
Page 33
Page 34
Explanations given to employees about the pay
decision
Explanations given to employees about the pay decision 1 of 2
• How much money my organization had to spend
• The state of the economy
• My individual performance
• The cost of living or inflation
• A trade union pay deal
• The going rate for the job
• My team’s performance
• How long I have worked for the employer
Page 35
Explanations given to employees about the pay decision 2 of 2
• The value of my benefits package
• An increase in the minimum wage
• The implementation of equal pay
Page 36
Page 37
Recognizing all parts of total rewards
Recognizing all parts of total rewards
• External position equity
• Internal position equity
• Employee pay and recognition equity
• Total non-cash compensation
• Ability to fund all aspects of the program
Page 38
Page 39
Assessing the suitability of an employee for a raise
Assessing the suitability of an employee for a raise
• Achievements of the individual
• Traits
• Improvement potential
Page 40
Page 41
Myths around equal pay
Myths around equal pay
• Equality is all about making everyone the same
• It’s a pay problem
• If you take it in the round it works out broadly the same
• We have a points-based job evaluation scheme so we’re OK
• We can’t afford to do anything about it
Page 42
Page 43
Tests around equal pay
Tests around equal pay
• Starting pay
• Women returning after mat leave
• Performance rating curve
• Performance rating aligned to pay outcomes
• Pay increases on promotion
Page 44
Page 45
What does a top 100 CEO earn in Canada?
What does a top 100 CEO earn in Canada?
• Total compensation
• Base salary
• Cash bonuses
• Grants of company shares
• Stock options
• Other compensation
• Pension compensation value increase
Page 46
Page 47
How much should I pay…?
How much should I pay…?
• Admin assistants
• Chemical engineers
• Creatives
• Credit and collections people
• Directors
• Engineers
• HR
• In-house counsel
• Sales
• Web and internet professionalsPage 48
Page 49
Conclusion, summary and questions
Page 50
Conclusion, summary and questions
Conclusion
Summary
Videos
Questions
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