Strategic Human Resources, Llc

Value Stream Meeting

September 12, 2011

Kathy Chiaravalli

Managing Director

STRATEGIC HUMAN RESOURCES, LLCINTRODUCTION

STRATEGIC HUMAN RESOURCES

•We advise clients in areas of total rewards and international HR

•We help clients

• Grow revenue, profit and market share

• through compensation systems that drive corporate performance

• Executive

• Sales

• Variable

• Base

• Expand globally,

• successfully, legally and cost effectively

• Reduce expenses

• through benefit design and administration

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HOW DO WE DO IT?Compensation and Benefit Design

• Tie sales, executive and base compensation to corporate objectives

• Strategic plan design and objective, aggressive vendor selectionInternational Expansion

• Pragmatic, customized expatriate solutions• Agreements• Process checklists• Objective Service Provider Selection

• 25 Years experience in 30 countries • Anticipate and prevent pitfalls

WHO HIRES US AND WHY?

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• C - Level executives –

• Discretionary incentive structures are no longer working

• Perceived as unfair

• Perceived as post hoc handouts, not drivers of business strategy

• Compensation does not motivate or retain critical talent

• Lack of alignment among various incentives such as sales, executive, variable.

• Base / Variable pay mix does not match business strategy

• Incentive structures do not work in volatile economy

• Lack of line of sight between business strategy and compensation design

• Current compensation plans do not support new strategies (sales, growth, etc)

• Total Rewards Strategy and Plans do not reflect Employer Brand

• Globalization

• Mergers and Acquisitions force realignment

COMPENSATION

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COMPENSATION – EXECUTIVE, SALES AND VARIABLE

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Problem

•Discretionary bonus plans perceived as random and unfair

•Lack of timely documentation and/or communication regarding compensation

•No link with performance management

•Plans did not provide incentive or line of sight to business objectives

Solution

•Designed, modeled and communicated executive, sales, and variable compensation systems that supported key business objectives and are integrated with performance management process.

Benefits

•Executives, sales and other staff understand prior to start of year what is important, how they can affect outcomes and how they will be paid if they meet objectives.

•Profit and revenue growth, attract new sales and executive talent, retained top executives

•Research has demonstrated higher ROI among companies with better compensation practices.

BASE COMPENSATION

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Problem

•No formal base compensation system

•No salary planning process

•Worry about losing key talent post recession

Solution

•Developed simple, market based grading solution

•Developed two pool salary planning process to reward critical talent .

Benefits

•Equitable, explainable compensation model

•Executive team alignment on job value

•Leveraged resources to ensure that critical talent is retained.

SALES COMPENSATION

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Defining Sales Strategy Winning at the Front Line Building and Sustaining PerformanceSegmentation

Value Proposition

Efficiency Effectiveness

Recruiting and Training

Supervision and Coaching

Organizational Support

Where is the money, what segments should the sales force focus on for growth and profitability?

What is the winning value proposition?

Are sales force and channels deployed to efficiently cover priority segments?

What do customers need from sales representatives?

How do we get the right people with the right skills at the front line?

What role can coaching play in sales force/ channel development?

Do sales channels have the support they need to sell efficiently and effectively?

What combination of sales and service capabilities represent a winning formula?

Is sales force time spent selling?

What skills are required to sell the value proposition to the target segments?

How should channels be developed?

Are sales managers skilled and motivated to coach required skills? External Coach?

Do sales compensation plans drive high, objectives-linked and strategy-consistent performance?

How can more time be freed for high value selling?

What are the key skills to be developed?

GLOBALIZATION

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GLOBALIZATION

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Problem

• Companies must globalize to match customer footprints

• International mobility is complex and expensive

• Companies may not have internal resources to handle global issues

Solution: • International HR Strategy and tools to support expansion, policy framework, process

checklists, agreements, service delivery models, multi year cost projections, vendor selection • Outsourced administration solutions

Benefit: • Successful subsidiary launches, productive expatriates, minimal tax and service costs, lack of

legal problems

BENEFITS – TOTAL REWARDS STRATEGY

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BENEFITS – TOTAL REWARDS STRATEGY

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Problem: • Auto suppliers experiencing increasing benefit expense and global liability.

Solution: • Multi year benefit strategy, plan design and communication plan • Global pension governance policy• Retiree Medical plan redesign• Vendor selection process

Benefit: • Total rewards aligned with strategy and employer brand• Substantially reduced plan design and administration costs.• Reduced liability and improved SOX compliance• Reduced FAS 106 liability without retiree complaints

TARGET MARKET

• Companies growing or changing strategy

• Companies beginning to expand internationally

• Foreign firms doing business in USA

• Benefit broker / consultants looking for international strategic partners

• Accounting firms looking for international strategic partners

• Industry experience in high tech, automotive and wine and spirits

BIOKathy Chiaravalli has been a global business leader for more than twenty five years. As a global human resource consultant, Ms. Chiaravalli offers client organizations her wealth of international and domestic expertise in compensation, benefits, expatriate program management, and human resource planning in Fortune 250 organizations. Ms. Chiaravalli has led a wide range of human resource functions in global consumer products, automotive, high tech, and service organizations. Known for revolutionizing chaos, Ms. Chiaravalli has traveled to over twenty-five countries to design and implement business solutions and has been responsible for international human resource programs covering fifty countries for four different multi-national companies. As Vice President – Total Reward Systems, she was one of the five highest ranking women at Allied Domecq (the world’s second largest wine and spirits company).Ms. Chiaravalli has a Masters degree in Human Resources from Cornell University and a Bachelors degree in Economics from the University of Wisconsin-Madison. She has completed extensive multi-week executive education programs at INSEAD in Fontainebleau France and a Global Leadership program at Babson College in Wellesley Massachusetts.She has taught International Benefits for the International Employee Benefits Foundation. She was a Global Team Advisor for the W@W and a Board Member and Editor for the New England Chapter of the Human Resource Planning Society. In addition she co chairs the Detroit International Special Interest Group of SHRM and has been affiliated with AIESEC and the NFTC. Ms. Chiaravalli has published four articles related to Human Resources including “Working Abroad: Profiting from the Experience in the Journal of International Compensation and Benefits.

CONTACT INFORMATION

Kathy ChiaravalliManaging Partner

Strategic Human Resources LLC

Tel: 1-248-790-6278 [email protected]

www.HRStrategy.biz