Compensation Design

We can design compensation systems and help you apply them to improve your reward practices. Better program and process design leads to more effective and efficient rewards. All solutions include relevant training and knowledge transfer, so you are not held hostage to a consulting firm.

Job Architecture

  • Review current job classifications, titles, designations and levels, whether formal or informal and recommend new level structure
  • Analyse employee data, intra-job pay variance, feeder jobs, separation information or other indicators of the need for modification
  • Recommend job family level and title guidelines, aligned to your existing hierarchy or competency frameworks, etc.
  • Design a new job architecture and internal maintenance procedures and controls that fit your HRIS environment
  • Map all employees and determine impact, advise on implementation approach to support effective adoption

Job Evaluation

  • Job analysis and documentation, using questionnaire and manager interview techniques
  • Implement job evaluation process and methodology using your job evaluation methodology, Paterson Points job evaluation or we create a custom job evaluation method or level guide
  • Evaluate jobs on a per-job or project fee basis, using Paterson Points methodology, correlated to Mercer PC, Towers GG, Hay, etc.

Benchmarking and Salary Range Structures

  • Assistance in sourcing the right market benchmark survey data
  • Preparation of compensation benchmark analysis in Excel
  • Calculation of market ratios to indicate competitiveness of base, total fixed and total cash compensation, by employee, grade, unit, location/country or company
  • Pay Range Structures: number of structures, number of grades; universal or function-specific; regressed or non-regressed, etc. Includes full simulation, modeling, impact/cost analysis
  • Calculation of compa-ratios for use in annual salary review or job change pay decisions
  • Specialised approaches when you don’t have any/enough market data
  • Communication and training
  • Implementation guidance, including downward and upward impact, buyouts, employee consent issues, etc.
  • Annual updates and structure maintenance
  • Salary Proposal Worksheet Excel tool

Read Top 7 Risks when Building a Grade Structure

Annual Salary Review Support

  • Salary budgeting
  • Market analysis and compa-ratios
  • Modify salary budget recommendations based on market analysis
  • Develop/update salary ranges for the new year and the review
  • Prepare HRIS data for the salary review
  • Develop a merit matrix (salary increase guideline)
  • Develop a manager input tool and process for rollup/consolidation/approval
  • Personal compensation statement
  • C&B team training on managing the salary review process
  • Manager training on making and communicating pay decisions

Incentive Design

  • Short-term or long-term incentives
  • Equity (share) based, or cash based
  • Define purpose, scope and objectives
  • Determine best type of incentive (target-based, sales commission, profit-sharing, gainsharing, etc.)
  • Eligibility and target opportunity
  • Performance measures and metrics, including selection of financial and non-financial
  • Setting targets, thresholds, maximums and corresponding payout levels
  • Addition, multiplication, gates, kickers, accelerators and other mechanics and design decisions
  • Modeling and illustrations
  • Internal review and approvals
  • Documentation and communication

See Corporate Incentive Review Guide

Sales Compensation Design

  • Determine business and marketing objectives
  • Determine sales talent & staffing approach, identify sales roles
  • Recommend pay mix for each role and migration approach
  • Identify performance measures and metrics for each role
  • Review and advise on methods for setting target/threshold/max/stretch goals or commission rate
  • Analyse funding/budgeting and compensation cost of sale analytics
  • Guide modeling and impact analysis
  • Draft plan documents, Excel calculators and presentations

Profit Sharing

  • Determine whether profit sharing is right for your situation and culture; educate the client on profit sharing versus other approaches
  • Identify and validate behaviour change is needed to break silo mentality and drive one-company mindset
  • Confirm eligibility and identify co-existing variable pay plans
  • Design and model plan designs to correlate cost with business results and intended level of total compensation, pay mix, etc.
  • Prepare presentation and approval materials for CEO, RC and Board, as needed
  • Prepare implementation, administration and communication material to support effective implementation

Gainsharing

  • Form and train a team including HR, plus finance, operations and quality
  • Determine whether gainsharing is right for your situation and culture; educate the project team on gainsharing versus other approaches
  • Identify and validate participative and empowered culture and behaviour needed to sustain a culture of continuous improvement
  • Confirm eligibility and identify co-existing pay practices including overtime, allowances, etc.; engage union if appropriate
  • Select 3-6 performance measures and metrics
  • Design and model plan designs to correlate incentives with financial gains associated with improvements in performance measures
  • Prepare presentation and approval materials for Operations management or others
  • Prepare implementation, administration and communication material to support effective implementation

Expatriate Compensation

  • Global mobility policy review and rewriting
  • Interview stakeholders to determine objectives
  • Design/redesign compensation policy and calculation for expatriates on long-term or short-term assignments; permanent transfers (e.g. local to local); locally hired foreigners and localisation of expatriates
  • Cost impact and impact on employees and their accompanying dependents
  • Deliver new policy and calculation templates for all mobility categories
  • Localisation of specific expatriates (flat fee, or based on percentage of savings)

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