Strategic Pay Systems

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Strategic Pay Systems
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Parts of the puzzle

• Direct Compensation
• Salary, Hourly Pay, Overtime, Bonus, Piecework
• Indirect Compensation
• Vacation
• Health and Pension
• Sick Leave
• Jury Duty

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Highly Legalistic System

• Landmines
• Overtime
• Break Time
• Independent Contractor Status
• Withholding, penalties, overtime, unemployment
  compensation, social security, and interest

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Other Issues

• Salary Compression
• Equity (sense of fair treatment)
• External Market rate
• Internal Other jobs in organization
• Individual Others doing similar work
• Procedure Is the rate calculated and
  administered fairly

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How do we set a rate?

• Salary Survey
• Worth of each job
• Point
• Factor
• Group by numeric scores
• Price according to statistical analysis
• Fine tune rates

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Paying Executives

• Base
• Short-term incentives
• Long-term incentives
• Benefits and Perks

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Paying Professionals

• Performance metrics are hard to determine
• Base set on education or professional
  qualifications not performance

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Competency Based Pay

• Acquisition of new skill, knowledge or ability
• How do you determine actually acquired skill?
• How do you determine is skills are being used?

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Broadbanding

• Reduce salary classes or grades

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Comparable Worth

• Gender issues in compensation
• Less leverage
• Stay in jobs longer
• Episodic work history
• Attracted to lower paid entry jobs
• Family friendly low pay
• How do you fix it?