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Total Market-Based Compensation Total Market-Based Compensation Management SystemManagement System

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HR Solutions LLCHR Solutions LLC

Dear Prospective Client:Dear Prospective Client:

This presentation contains an overview of the Total Market-Based This presentation contains an overview of the Total Market-Based Compensation Management System offered by HR Solutions LLC. Compensation Management System offered by HR Solutions LLC. It is a summary of the regulatory demands on your company and It is a summary of the regulatory demands on your company and what we can do to ease the regulatory burden, keep you in what we can do to ease the regulatory burden, keep you in compliance and, most importantly, ensure you have the tools to stay compliance and, most importantly, ensure you have the tools to stay competitive. competitive.

HR Solutions LLC enhances your pricing/proposal process by HR Solutions LLC enhances your pricing/proposal process by providing you with multiple surveys (up to 30), geographic providing you with multiple surveys (up to 30), geographic differentials that allow you to bid the local labor rates, and a differentials that allow you to bid the local labor rates, and a database that you can age to the date the proposal starts.database that you can age to the date the proposal starts.

We hope you find this presentation useful as you consider your We hope you find this presentation useful as you consider your company’s needs—particularly in the areas of compliance and company’s needs—particularly in the areas of compliance and pricing. We look forward to working with you.pricing. We look forward to working with you.

Sincerely,Sincerely,

Jim Jutzin, SPHRJim Jutzin, SPHRVP HR Consulting ServicesVP HR Consulting ServicesHR Solutions LLCHR Solutions LLC703.298.5991703.298.5991

Total Market-Based Compensation Management System

Program Overview

Regulatory ComplianceRegulatory ComplianceWhat Does It Mean? What Does It Mean?

A compliant plan must meet three external audits – A compliant plan must meet three external audits – DCAA, OFCCP and DOL/FLSADCAA, OFCCP and DOL/FLSA

• DCAA is concerned that the plan pays fair wages compared DCAA is concerned that the plan pays fair wages compared to the external market They define the external market as to the external market They define the external market as survey datasurvey data

• OFCCP is concerned that the plan pays fair wages OFCCP is concerned that the plan pays fair wages compared to internal equity Are your minorities paid in line compared to internal equity Are your minorities paid in line with majorities?with majorities?

• DOL/FLSA requires all employees are properly categorized DOL/FLSA requires all employees are properly categorized as Exempt or Non-exemptas Exempt or Non-exempt

To Meet DCAA ConcernsTo Meet DCAA Concerns

• Need to show your pay Need to show your pay is equitable to market, is equitable to market, for all labor categoriesfor all labor categories

• Must have multiple Must have multiple survey sources of peer survey sources of peer companies and jobscompanies and jobs

• Establish market-derived Establish market-derived pay structurepay structure

• Establish grades, Establish grades, ranges, job descriptionsranges, job descriptions

• Place staff in grades and Place staff in grades and compare to marketcompare to market

To Meet OFCCP To Meet OFCCP ConcernsConcerns

• Place staff into grades that Place staff into grades that match their experience and match their experience and educationeducation

• Compare females and Compare females and minorities to non-minorities minorities to non-minorities pay within gradespay within grades

• Explain any pay deltas or Explain any pay deltas or make retroactive adjustments make retroactive adjustments for 2 years on payfor 2 years on pay

Regulatory ComplianceRegulatory ComplianceWhat Do You Need to Do?What Do You Need to Do?

Why Institute a Total Market-Based Why Institute a Total Market-Based Compensation Program?Compensation Program?

• Government Regulations require that you have a system that Government Regulations require that you have a system that complies with 3 audit agencies, DCAA, OFCCP and DOL/FLSAcomplies with 3 audit agencies, DCAA, OFCCP and DOL/FLSA

• Pricing/contracts need latest market pricing dataPricing/contracts need latest market pricing data• Geographic pay deltas will ensure that your company pays and bids Geographic pay deltas will ensure that your company pays and bids

at the local market rateat the local market rate• Common job titles, grade definitions and job codes will allow your Common job titles, grade definitions and job codes will allow your

company to find staff across all company business units for bidding, company to find staff across all company business units for bidding, running reports on all levels of employees and compliance with the running reports on all levels of employees and compliance with the government regulationsgovernment regulations

• A common compensation program makes all new acquisitions A common compensation program makes all new acquisitions immediately look like the rest of the corporation immediately look like the rest of the corporation

• Managers will have a uniform guide, Salary Management Manual, Managers will have a uniform guide, Salary Management Manual, to explain all facets of the comp program to their staffto explain all facets of the comp program to their staff

Major StepsMajor Steps to Develop a Total Market- to Develop a Total Market-Based Compensation ProgramBased Compensation Program

• Using multiple surveys, develop salary ranges for all office locationsUsing multiple surveys, develop salary ranges for all office locations• Create uniform job levels (salary grades) that map to survey and Create uniform job levels (salary grades) that map to survey and

RFP definitionsRFP definitions• Establish career levels, job descriptions and job codes for all Establish career levels, job descriptions and job codes for all

positionspositions• All employees are assigned new grades, titles and job codesAll employees are assigned new grades, titles and job codes• A compa ratio (midpoint divided by salary) is determined for each A compa ratio (midpoint divided by salary) is determined for each

employeeemployee• Employees out of range are identified and a decision is made if Employees out of range are identified and a decision is made if

adjustments are requiredadjustments are required• Females and minorities are compared to non-minorities in all Females and minorities are compared to non-minorities in all

gradesgrades• Exempt and Non-exempt status is finalizedExempt and Non-exempt status is finalized• DCAA has traceable market data for all bidsDCAA has traceable market data for all bids• Managers are trained in the programManagers are trained in the program

Benefits of Total Market-Based Compensation Management System

• DCAA Compliance will have multiple salary survey data.

• EEO Analysis can be done within grades to ensure compliance.

• FLSA Compliance Exempt and Non-exempt status will be correct.

• Geographical ranges will allow more accurate bidding and proposal efforts and actual hiring salary ranges.

• Recruiting will have current market data.

• Managers will be able to counsel employees on how they can advance and what the effect will be on employees’ pay.

• Employees will have career charts and job descriptions to allow them to see a defined future in the company.

• Acquisitions can now follow the corporate salary grade template from day one.

• All jobs will have job code that will tie to employee, rate, range, title & location

• Pricing can establish actual average pay for job family, job title or entire grade

• Multiple job levels can be combined for greater pricing flexibility

• Labor categories may be bid with no incumbents, using market salary survey data

• GEO Survey Data Finder with City Differential and Aging Factor Tool provides current, multi-survey national labor rate information on jobs.

Impact on Pricing/Contract Proposal Efforts

What Your Managers Will LearnWhat Your Managers Will Learn

• The components of the new program

• How to manage compensation issues within a standard policy

• How to use job descriptions and career progression charts to conduct career development discussions with employees

• How to counsel employees on their pay

• How to correct historic pay problems

• How to use current total market data in recruiting

• How to determine correct job codes and salary grades for current and future employees

• How to perform FLSA Compliance – to ensure correct Exempt and Non-Exempt status

• How to perform EEO Analysis – within salary grade to ensure compliance

• What DCAA requires from a compensation system

This concludes the This concludes the Introductory Client Information Introductory Client Information PresentationPresentation..

At HR Solutions LLC, for more than 200 companies, our service At HR Solutions LLC, for more than 200 companies, our service offering has provided the tools to:offering has provided the tools to:

• • Enable competitive bidding nationally Enable competitive bidding nationally • • Ease the burden of regulatory complianceEase the burden of regulatory compliance• • Define, implement, and control compensation Define, implement, and control compensation • • Simplify HR employee administrationSimplify HR employee administration To learn how we can specifically make a difference for your company, To learn how we can specifically make a difference for your company,

please contact:please contact:

Jim Jutzin, SPHRJim Jutzin, SPHRVP HR Consulting ServicesVP HR Consulting ServicesHR Solutions LLCHR Solutions [email protected]@live.com703.298.5991703.298.5991

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