Archive for the ‘Compensation’ Category
Sales Compensation – Keeping It Simple
Most of us would agree that it’s a good idea to try to keep sales compensation plans simple, but in practice we rarely find an organization that accomplishes this goal. This is why I now start all sales compensation plan design discussions with the following question: If you can only include one component in your sales compensation plan, what would it be? This doesn’t mean you are selecting ...
Read More →Setting Up a Manager’s Guide to Performance and Rewards
It’s important for companies to have a guide to compensation for their managers and employees. They need to have a framework so they are effectively spending compensation dollars. A company should want to foster fair and consistent pay decisions through the use of compensation tools and performance processes, ultimately to link total pay with both individual and the business's performance. It’s also equally important that employees have ...
Read More →Variable Compensation Cost of Sales
Variable compensation cost of sales (VCCOS) illustrates an organization's variable compensation costs as a percentage of sales. Many organizations search for the market benchmark. The challenge is every company is different. Here are some of the factors that prevent you from using a market benchmark: Pay Mix Variation – Not all companies have the same mix of pay between base salary and incentive compensation. It’s not appropriate to compare ...
Read More →Remote Work is Here to Stay – How Do We Pay Our People?
Historically, compensation has been typically tied to where a job is based, meaning the company location, through the use of geographic differentials. In recent years, trends show that remote work has been increasing, and forecasts show that it will continue to do so. In fact, Mark Zuckerberg said he believes that about half of Facebook’s workforce will be remote by 2030. The rapid and sudden increase in remote ...
Read More →2021 Compensation Strategy Benchmarking
According to a recent Willis Towers Watson Salary planning survey during the pandemic, one-third of companies halted their salary increases through freezing or postponement, while the rest implemented salary adjustments that on average are 0.6% lower than the pre-crisis level. As the world steadily moves towards restoring stability, many organizations are relying on extreme cautiousness and cost-saving strategies to navigate through the rest of 2020 and to create ...
Read More →Sales Compensation Reaction to COVID-19
The nation’s response to the COVID-19 crisis is forcing a change to most companies’ sales processes. Many outside sellers are having to rely on phone and electronic means to communicate with their customers and prospects vs. being able to visit them in person. The bigger issue is that many companies are experiencing a slowdown in their business and the extent of that slowdown is unknown. The question ...
Read More →Rethinking Compensation in a COVID-19 Environment
This article addresses the current economic COVID-19 realities and provides alternative compensation guidelines to minimize its impact while still retaining valued and high-performing employees. While some companies might be actually growing, that's not the reality for a lot of them. This article doesn't deal with businesses that are in dire straits and need government aid to survive, which may be the case for the airline industry, travel/entertainment businesses, retail and restaurants. It also doesn't address those ...
Read More →Spending on Variable Pay
We know that publicly-held companies have increased their spend on variable pay plans. In 2019, variable pay as a percent of total payroll was around 14%, excluding sales personnel, while merit budgets have been stagnant at 3% for over two (2) decades. Given that shift in pay, are privately-held companies following suit? WorldatWork and Vivient Consulting conducted a ...
Read More →Keeping Cool with Hot Jobs
Pricing hot jobs is a hot topic in the compensation arena. Hot jobs typically fit into two categories: • A new/emerging job typically requiring specialized skills • An existing job with high demand and low supply of skilled laborers for the job Why is this such an area of concern for HR and Compensation professionals? There is a lack of accurate and up-to-date compensation survey data for hot jobs. In addition, it’s difficult to stay ahead of ...
Read More →Non-Exempt (NE) Employees and Calculating Overtime (OT) as Part of Incentives, Commission and Bonuses
NE Salaried Classification A company can create a NE salaried employee classification. A NE salaried employee is paid a set salary on a weekly, bi-weekly or semi-monthly pay period. However, if the position is classified as non-exempt (NE), they must be paid OT for all hours above the defined workweek. If a NE employee is hired at a ...
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