SRD Consulting Services, LLC

Compensation Planning on a Shoestring“When Excel Spreadsheets Are The Only Option”

Steve is a Certified Compensation Professional with over 37 years’ experience as a human resources professional. He has expertise in global compensation program administration (including executive compensation, long/short-term incentives, job evaluation and market research), employee communications, HRIS coordination, and project management. Steve has led compensation projects in the Americas, Europe, and the Asia-Pacific region. He also has extensive experience with pay equity analyses and implementing strategies to leverage diversity and change management initiatives. Steve has also had leadership roles in training and organization development, labor relations, salaried administration and human resource planning. He has also consulted and facilitated acquisitions, mergers, and joint venture activities.

Steve advises a wide variety of clients, among them both publicly-traded and closely-held businesses, on their compensation and change management needs. Prior to entering the consulting profession, Steve was a Senior Consultant on the Global Compensation Staff of General Motors Corporation.

Steve earned a doctorate degree from Wayne State University. He also received M.S. and B.S. degrees from Ball State University.

Steven R. Davis, Ph.D., CCP

Workshop Objectives

Develop an awareness of techniques that can be used with Excel workbooks to:

• Create and distribute compensation planning worksheets• Efficiently merge and re-publish planning worksheets for

roll-up approvals• Analyze compensation data and create meaningful

reports• Generate individual employee compensation statements

Salary Planning “Tactical” DECISIONS

• Fund determination & allocation (e.g., mid-point administration, budget-based, performance-driven, etc.)

• Identification of planning groups• Identification of compensation planners/approvers • Define “rollup” & approval timing• Planning in local currency versus % change versus

% of funded amount• Rounding rules, “hard” versus “soft” edits• Compensation plan analytics and reports

Basic

3%

High Performer

1%

Supplemental

.5%

Compensation budgets can consist of multiple components…

Market Adjustment

.5%

Fund allocation for initial employee recommendations…

• Approved Fund or Budget

• Salary Intervals • Performance Rating• Strategic Allocation (e.g., Modeling)

– Performance– Percent of Market Rate– Pay Equity– Retention

Fund AllocationSalary Intervals

Fund AllocationPerformance Rating

Performance Rating / Compa Ratio

Compensation Fund

EligiblePopulation

“Strategic” Fund Allocation

Market Rate %(Salary Range)

Bas

e In

c R

eco

mm

end

atio

n P

erce

nt

Illustrative

Low

HighLow

Market Correction Fund

Base Increase Fund

“Strategic” Fund Allocation

EXCEL DEMONSTRATION

Fund Allocation

A PowerPoint voice-over presentation that explains how to use the calculator and a sample Fund Allocation Calculator can be found on the Resources page of the following website.

www.srdconsultingservices.com

Data sources for compensation planning…

HR Information

Systems

Global Directory

Employee Data:• Name• Level/Grade• Salary• Hire Date• Prior Comp Treatment• Education• Performance Rating• Etc.

Organizational Data:• Name• Department• Location• Phone Number• e-Mail Address• Supervisor• Direct Reports• Etc.

Planning Hierarchy…

Top of Hierarchy

Tactical Decisions• Identification of planners &

planning groups• Number of planning cycles

(e.g., roll-ups)• Timeline for each step of

the planning process.• Process for matrix

reporting relationships

3rd Planning Cycle

2nd Planning Cycle

1st Planning Cycle

Summary Worksheet

Because planning worksheets may contain employees with salaries in different currencies and size of the budget can vary by country, planning as a percent of the budget can be helpful.

Initial Employee Recommendations

A “PAR” value of 100% can be used to standardize the initial employee recommendation to represent the country’s approved budget.

By adjusting the PAR %, Leaders can focus on the relative contribution of each employee...

and the recommended merit increase percent is adjusted accordingly.

5% Merit Rec x 85% PAR = 4.3% Inc.

Initial Employee Recommendations

EXCEL DEMONSTRATION

Analytics

“What gets measured gets done.”

“Not everything that counts can be counted, and not everything that can be counted counts.”

“Without a standard, there is no logical basis for making a decision or taking action,”

Peter Drucker, Tom Peters, Edwards Deming, Lord Kelvin, Joseph Juran and others..

EXCEL DEMONSTRATION

Excel Data Analysis Tools “Pivot Table”

Here are some example uses of pivot tables:

• Summarizing data like finding the average sales for each region for each product from a product sales data table.

• Listing unique values in any column of a table• Creating a pivot report with sub-totals and custom formats• Making a dynamic pivot chart• Filtering, sorting, drilling-down data in the reports without writing one formula or

macro.• Transposing data – i.e. moving rows to columns or columns to rows.• Linking data sources outside excel and be able to make pivot reports out of such

data.

http://www.youtube.com/watch?v=0ZyGcSdsaNo

http://www.youtube.com/watch?v=eax0HTsieZA

Below are Youtube tutorial videos on how to create a Pivot Table:

EXCEL DEMONSTRATION

File Distribution

Considerations…– Ease of Access– Security– Cost

• e-Mail

• Shared Drives

• The “Cloud”

• Custom Websites Intranet Internet

Sharepoint Office 365

Communicating Salary Changes

According to a study conducted by the human resources consulting firm, Watson Wyatt Worldwide, organizations that communicated most effectively with employees experienced a return to shareholders of 26%.

Employers who attempt to "cut corners" with regard to pay decisions generally are rewarded with a disgruntled workforce. Joan M. Rennekamp, SPHR

Compensation Statement

Compensation Statement

• Contains a compensation statement for each employee for which the Leader has responsibility for communicating the compensation change.

• Additionally, contains “Talking Points” and a summary worksheet detailing all compensation information in a single worksheet.

• Individual compensation statements can be printed or saved to a separate file.

• Compensation statement template can be translated to local language.

“Group” Compensation Statements

EXCEL DEMONSTRATION

• A macro is a series of commands and functions that are stored in a Microsoft Visual Basic module and can be run whenever you need to perform the task. For example, if you often enter long text strings in cells, you can create a macro to format those cells so that the text wraps.

“Macros”

EXCEL DEMONSTRATION

• Search Microsoft HELP• Search the Internet for Solutions• Call a Friend…• Excel Message Board

Developing Excel Skills

“Mr. Excel”Bill Jelen

http://www.mrexcel.com/

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Questions