Compensation PUZZLES in IT

Lesya Bobyk, HR Director at SoftServe Inc, For HT IT Conference

What wakes your company CEO

up at night?

MOTIVATION

SATISFACTION

RETENTION

ATRACTION

SELF- ACTUALIZATION

MOTIVATION

SATISFACTION

RETENTION

ATRACTION

SELF- ACTUALIZATION

MOTIVATION

SATISFACTION

RETENTION

ATRACTION

SELF- ACTUALIZATION

Wage Salary

Reward

Compensation

Reward System

Intrinsic Rewards

Extrinsic Rewards

Nonfinancial Financial

Direct Compensation

Base Wage/Salary

Merit & Incentives

COLA ( or CCA)

Indirect Compensation

Day-offs/Vacation

Protection programs

Employee Services &

Perks

Wage & Salary

Factors Influence Wage and Salary Structure

Organization’s ability to pay Supply and demand for labor Prevailing market rate Cost of living Job requirements Managerial attitudes Psychological and sociological factors

Salary Determination Process St

ep 1

Job Description

Step

2

Job Evaluating

Step

3

Salary Market Analysis

Step

4

Salary Structure

Step

5

Salary Payment

Wage & Salary

Concept

Performance Based

Grades Based

Competency Based

Wage and Salary Review Process

Monthly Salary Review Meeting

Employee’s Salary

Line Manager

Employee Career Advisor

Wage and Salary Review Process

Salary Review Rules

Employee’s

Salary

Salary Review Reason

Next Salary Review Steps

Salary Ranges

Frequency

% Increase

Wage and Salary Review Process

Salary Communication Rules

Why!

How much!

Why! Next

Steps!

Merit & Incentives

Short Term

• Technical Interviewer

• Internal Trainer

• Competency Expert

• Referral Bonus

• etc

Long Term

• Performance Bonus

• Profit Sharing

• Stock Options

• Period of Services

• etc

M&I Category

Individual Managerial Corporate

Piece Rate Gain Sharing Profit Staring

Bonuses Quality Improvement ESOP

Special Recognition Cost Reduction Deferred Compensation

M&I Levels Difference

Key Compensation Metrics

• % Salary of Revenue • Average Salary • Above Salary Ranges

Company-Related Outcomes

Forecasting ability Workforce flexibility Increase effectiveness of work teams Increase employee’s output per month Career-enhancement opportunity

HR-Related Outcomes

Job evaluation needs endorsement from management Compensation policy education Periodical policy review Take feedback from people

People do what they do to satisfied their needs

Long term security vs. sudden higher $sum

What you see is not what you get

As you sow, so you reap

To the End