5 essentials for a compliant, defensible & effective comp program

TalentTakeawayswebinar & podcast series

5 Essentials for a Compliant, Defensible and Effective Compensation Program

AGENDAThe Series

Talent Takeaways | Compensation Compliance


AGENDAThe Sponsor


AGENDA

Brian SharpChief Marketing Officer , HRsoft

Bruce JohansonPrincipal Partner, DB Squared

Guest Presenter


What We Will Cover:


Essential Compensation Management components

Creating consistent & ADA compliant job descriptions

Benefits of using a point-factor rating system

Obtaining salary data to compare against

Integrating internal equity with external competitiveness

Essential Comp Management Components


PAQ – Position Analysis Questionnaire/Review Interviews

ADA Compliant Consistent Job Descriptions

Point-Factor Rating or some form of an Internal Validated Rating System

Employee Data

Market Data

These essentials create an internally equitable & externally competitive defensible base compensation management

structure.

PAQ – Position Analysis or Assessment Questionnaire (1)


Hard copy can be 3 to 7 pages in length covering:

Position Basics – Title, Supervisor’s Title, Department, Exempt/NE Classification, Date

Position Summary or Purpose Statement

Position Duties or Responsibilities

Experience, Education, and other Knowledge, Skills and Abilities Requirements

Physical and Work Environment Aspects for Position

ADA Compliant Job Descriptions (2)


Use data collected from PAQ

Consistent Format

Usually one to three pages in length

List of essential duties usually five to fifteen with the last one being an automatic “Perform any other duties or tasks as assigned or required.”

Description of experience, education, and other skill requirements required and/or preferred

Description of the physical and work environment requirements to meet the ADA guidelines

Descriptions should have a current date on them and reviewed at least annually

Job Description Benefits & Drawbacks


BenefitsProvides a general understanding and requirements of a positionUseful in the hiring (job posting & interviewing) and orientation processBasis to evaluate one position compared to another in an department or across the organizationGreat tool to use with employees during the annual performance planning and evaluation processMeets the requirements for ADA

DrawbacksTime-consuming to create and maintain and also tends to be outdated– not so with automated job description writer

Point-Factor Rating System (3)


Has been around since the 40’s

The Hay Group – best known for creating it and using it with its client base from 40’s on

During 70’s and most of the 80’s – point factor system was not regularly used, just outside market salary averages

Market salary averages alone can be misleading and go up and down annually and recent pressure from the OFFCP to conduct multi-factor analysis has caused organizations to return to the point-factor rating and other factor analyzes

Point-Factor Rating System


Who has them?

Hay Group – 9 factors

Hewitt & Associates – 11

Department of Labor – 9

Johanson Group – 15 – copyrighted system created in 1985

Others – Some companies have created their own

Point-Factor Rating System


Components include such factors as:

Experience

Education

Problem-Solving

Supervision

Communication

Machine Operations

Physical Demands

Internal Employee Data (4)


Usually kept on a HRIS or payroll system & at a minimum you need:

Employee NamesEmployee SalariesPosition TitlesJob Rating Points

Other essential data that is useful:

Employee ID #Position Title #Gender, Ethnic Background ClassificationsDate of BirthEmployment DatePhysical Location

Outside Salary Data (5)


Where do you collect salary data?

Local HR/Comp Associations

Local Chamber

Trade/Industry Associations

Competitors (need to obtain 5 to 6 or more)

Published or electronic data (Watson/Wyatt, Hewitt, DOL, Compdata, SalarySource.com, etc.)

Creating Internal Equity & External Competitiveness


Using Regression Analysis you can use the variables of rating points and pay to see how your organization is doing internally.

Using Regression Analysis with the external salary data and same position rating points, you can see how the organization is doing externally.

Once you have determined where the organization is to market, you can create salary ranges/grades for each positions and then assess where each employee fits within the salary ranges.

EEO Related Employee Pay Lawsuits Are Increasing & Very Costly


The frequency & amount of judgment awards are increasing over pay & protected classes.

Meeting the Voluntary OFCCP Guidelines on Comparable Worth


Federal Contractors with 50 employees and $50,000 in annual federal funds are required to maintain some form of an AA plan. In the last couple of years, the OFCCP has passed voluntary guidelines on comparable worth and steps to determine if your organization is meeting these guidelines.

Meeting the Voluntary OFCCP Guidelines on Comparable Worth


These guidelines include completing several multi-factor analysis including job rating points, gender, ethnic background, time in job, promotions, etc. to determine if there are any discriminatory pay practices.

We believe that these voluntary guidelines will become mandatory in a few years.

DBCompensation™ Software


Web-based Job Description Writer – creates a Word based FLSA compliant job description in 15 to 20 minutes

Web-based Job Rating System – seeks to reach consensus on job ratings automatically with a job rating committee

Automatically creates your regressions lines for the internal employee equity review and external market pay lines compared to your organization’s pay line

DBCompensation™ Software (Continued)


Creates a schedule to determine where each employee fits in their salary range and provides a summary review for the whole organization for easy decisions with salary adjustments/budgets

All schedules can be exported to Excel and graphs to PDF’s

Importing feature to take data from your HRIS or payroll system into the DBCompensation software saving a significant amount of time

Questions?


Thank you for allowing us to present to your group today and hope the rest of 2015 is

great for each of you. If we can help you with your Compensation/HR needs, please email

me at: [email protected]

COMPview™High Impact Compensation Planning Software

HRsoft.com


answer questions

share resources

offer solutions

Strategy Session

Resources & Support



5 Essentials for a Compliant, Defensible and Effective Compensation Program

5 essentials for a compliant, defensible & effective comp program

Recruiting & HR

effective compensation

position useful

pointfactor rating system

s point factor system

position basics title

date position summary

salary data

hiring job