Last week, we took a look at ERI´s Executive Compensation Assessor. The article included some research on the strategy behind compensation systems. We learned that there are basic reasons and structures that should be followed in order to design an effective compensation system. One of the fundamentals to designing an effective executive compensation system is to attract talent yet still balance internal equity concerns. The plan should also be designed to meet corporate strategic objectives by maximizing shareholder return and reflect the company´s value statement.
However, as we have seen evidence in the recently highlighted AT&T executive compensation blunder, organizations often don´t balance equity and efficiency principles; the result can lead a company to ruin.
What happened at AT&T was that there is evidence of the mismanagement of their executive compensation system. As a result, their stock value has declined by about 66 percent and has received three shareholder proposals to change its pay structure. Tim Smith, senior VP at AT&T shareholder Walden Asset Management states "This is another case of executives having their nests feathered while shareholders are performing really poorly".
Normally undisclosed astronomical executive compensation plans are being published and publicly scrutinized. In fact, AT&T´s chairman received almost $28 million in salary, bonus, stock options and other pay, an 86% increase over his 1999 compensation package.
Some of the primary benefits of effective compensation management include:
- Recruit qualified employees
- Maintain employee satisfaction
- Retain current workforce
- Strive toward internal and external equity
- Reward desired employee behavior
- Control costs
- Comply with state and federal regulations
Although not designed for executive compensation plan design, Queue is intended to assist organizations with establishing a degree of pay equity using calculated salary ranges and a level of objectivity. Let´s see what Queue can offer...
The program is also called the "Pay Equity Analyzer" and is designed to assist managers with developing and maintaining an equitable salary administration system.
The goal behind Queue is to provide managers with a tool to maintain the internal pay equity of your employees. Therefore, without considering race, age, gender, disability, etc., Queue allows users to establish a base salary and determine program parameters according to experience and performance. Queue then analyzes the situation and calculates the appropriate salary.
The equity parameters of the application can be changed
It contains the following features:
This product is best suited for small companies between 5 to 500 employees.
Queue is based on 6 basic steps to input information. Users must first enter company specific information such as locations, and departments. This is where users outline the lowest salary ranges from which the compensation plan is built. A table can be automatically printed that outlines the salary grades previously defined.
There is a surprising but basic level of functionality integrated into this little application. For example, users can track basic employee information such as hire date, employment status, and years/months of industry experience. Queue also tracks employee personal data such as address and education, benefit data, appraisal data, and additional information. Although these additional functions are available in the application, they have very basic functionality and are used mainly for tracking information.
Users are given 30 days of free support after which users must either email, fax, phone (not toll-free), or use their tech support page on their website. If you still require tech support services, there is a charge of $75 per incident.
- Windows 95
- Pentium CPU
- 75 MHz or higher
- 16 MB of RAM
- 12 MB of hard disk space
- Super VGA monitor
- Compatible DOT Matrix or Laser Printer
The software includes one user license and is priced at $179. Additional licenses are $100 each.
You need to have Access2000 installed on your computer to be able to run the demo program; however, Queue was designed to perform on a run-time version of Access and therefore, only require Windows 95 to run Queue. If you need to create your own customized reports, you will require a full version of Access as well as some knowledge of Access programming. For copyright purposes, it is required that on each workstation that Queue is installed, Access must also be installed.
The application is currently quite limited especially with respect to external integration and functionality. For example, global changes such as position progression and salary increases cannot be made to the system as any changes that are made are related to the individual instead of the field. There are also no import or export data capabilities; the program doesn´t allow users to save or export files to another directory. Finally, Queue cannot currently calculate both wages and commissions. However, Bauschke & Associates is considering these features for future development.
Another major problem with the system is that in order to maintain internal equity, which is one of the main selling points of the application, users are required to apply consistent changes to the group of employees involved, or everyone in the organization. However, global parameter changes cannot be applied to the entire database. Therefore, in order to maintain internal pay equity, each individual employee must be manually adjusted.
Although Bauschke & Associates promotes the product as being suitable for use for either beginners or veterans, users should have a good grasp of compensation concepts and terminology to understand the impacts of changes on the organization´s compensation system. It is true that Queue is not a highly technical application; it is easy to navigate as the functions are broken down into six basic steps.
The application is most useful in its ability to calculate the appropriate salary grades as well as to track your basic salary information. By doing so, it automates the tedious calculation process of salary grades. However beyond, this, users may find the additional features either too basic or redundant, depending on what applications your organization currently uses.
In the end, although the goal is to inject a degree of objectivity into the salary system, managers still have ultimate control over an employee´s salary within the salary range. If the manager perceives the employee to have contributed outstanding work during that performance period, they are still able to give the individual a less than objective salary increase, if they so desire.
About the company
"Bauschke & Associates Ltd. was formed in 1971. Throughout the years both our business clients and Bauschke & Associates have grown together. Both have become increasingly professional, both have expanded their scope of operations, and both have built solid reputations of leadership and service.
Today, Bauschke & Associates is a full service consulting firm. Its exposure to a wide spectrum of business challenges in many industries, both in the U.S.A. and Canada provides considerable depth and expertise in providing advisory services. These credentials, coupled with our acute awareness of the complex challenges facing management today, enable us to provide superior objective advice."
Bauschke & Associates Ltd.
Suite 400 - 93 Lombard Avenue
Winnipeg, Manitoba
Canada R3B 3B1
Telephone
Toll Free at 1-800-665-7776
or 1-204-949-1890