Effective Compensation Inc
12136 W Bayaud Ave Ste 100
80228 Lakewood
Web: -
Actions| Strategic Total Compensation Review and Design |
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Whether ECI is retained to design a compensation program from scratch, or to audit an existing program, it is important to be sure that the program accomplishes several objectives, including:
1. The program elements reinforce company goals 2. Employees and managers can understand the programs 3. The programs provide compensation or benefits in the most cost effective manner possible to the company 4. The programs are reasonable considering the organization's resources and practices of other organizations who compete with the organization for employees. ECI’s consultants ahave the technical knowledge that is required to assess the programs that you have or are considering, or we can help you by generating alternatives that you might not have otherwise considered. We can look at any individual compensation element if you desire. It is often most cost effective to examine your entire pay package to assure that it is designed considering the integrated issues that impact compensation. |
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| Salary Administration Programs |
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The table to the right shows the steps involved in designing any job based salary program. Simply put, the process involves agreeing on what is to be valued, internally determining the relative value of the job (of skills), obtaining the external value if possible, and then resolving any differences in an intelligent manner. The results may then be used to develop a grade hierarchy and to determine pay ranges that can be used to help determine salary levels in an equitable manner. All of this must be done within a philosophical framework that is consistent with the organization's managerial style.
ECI consultants specialize in helping employers determine simple, cost effective approaches to designing pay for performance, skill based, competency based and other approaches to base salary programs. We developed "Career Path Job Evaluation" as a simple answer to the complicated issues involved in most approaches. Contact us for details. |
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| Executive Compensation Programs |
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While many aspects of compensation do not differ at the executive level (except that the dollars are normally larger), there are some important aspects that are significantly different such as: insider trading constraints, public reporting requirements (proxies) for public firms, high paid employee limits in qualified benefit programs, and more frequent use of long term incentives such as stock programs and employment contracts.
ECI's consultants can work with your Board and your management to develop an effective strategy and the relevant executive compensation programs to support your organizations long term strategies. As part of this effort, we can identify concerns that your executives, shareholders and Board members may have that need to be addressed in the programs. We can also identify relevant competitive practices and other factors that should be considered in the program design. We also can assist in the development of compensation for your outside Board members. Many of these issues involve legal issues. We can either work with your law firm or utilize our legal associates to help you not only meet the letter of the law, but to assure that the programs designed are strategically appropriate for your firm and that they are competitive within your industry. We can also assist in designing the right compensation program for members of your Board of Directors. |
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| Compensation Surveys |
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| Product Manager | unknown user |
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Determining competitive pay levels has become much easier as more compensation surveys have been developed. Thousands of surveys are conducted each year. Some of these are good, some bad and some very misleading.
Poorly conducted surveys can be misleading. For that reason, it is important to use surveys that are carefully processed: * We prefer not to use "self reporting" surveys (like you often see in magazines) where employees submit data about their own pay. Better surveys are normally conducted through human resource departments. * Surveys that show data by participant run the risk of violating anti-trust rules. Recent court cases have created embarrassment and significant legal fees for participants in surveys that failed to pay attention to some straight-forward legal requirements. (Contact ECI for information about relevant legal cases.) Based on legal precedents, surveys should: o not ask questions about future compensation plans o present data in aggregate form only o not report data in a format that would allow individual company data to be identified o be conducted by a neutral third party, not by a firm that will use the data (this creates concerns even about casual sharing of information over the telephone). * Good surveys will normally include data on incentives, work practices and other compensation elements, not just base pay. * The most critical criteria for a good survey is that the data should be carefully reviewed by a knowledgeable analyst to assure that each of the survey matches is reasonable and accurate (avoid GIGO - garbage in - garbage out) * Good surveys provide meaningful data subsets - such as location data for lower level jobs that tend to be hired locally and industry and size subsets for professional and managerial positions. It is important to remember when using surveys that the data is only a sampling of the entire relevant universe and should be used cautiously. In addition, remember that the data is historical and should be "aged" to the time period when you will be using the data. To learn more about surveys conducted by ECI, see our "Compensation Surveys" section. |
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