Kenexa top 10 compensation mistakes made by small businesses

TOP 10 COMPENSATION

MISTAKES MADE BY

SMALL BUSINESSES

Lena Bottos CCP, GRP – Kenexa

Catherine Dovey CCP, SPHR – Compensation Works

To us, business is personal

Copyright Kenexa®, 2011 2 Copyright Kenexa®, 2012 2

ABOUT US

Lena Bottos CCP, GRP Vice President , Compensation

Kenexa

Catherine Dovey CCP, SPHR Principal, Compensation Works


WHY THIS IS

SO

IMPORTANT

Labor Costs

Other costs


HOW SOME

COMP PLANS

WORK…

Poll Question:

What is your company size?

•<50 Employees

•50-100

•100-200

•200-500

•500+


MISTAKE #10

Shh! Telling

managers and

employees not to

talk about pay.


TIP #10

Work on what you can control –

your communication about how

pay decisions are made.


PAY

TRANSPARENCY

CONTINUUM

Complete Transparency

(Public Sector)

Complete Transparency

(Closely held)


What

How

Why


MISTAKE #9

Adjusting pay

structures without

looking at pay levels

for each job.


TIP #9

Pay attention to the market

movement of individual jobs


IT’S MORE THAN

JUST THE

AVERAGES

Making assumptions based on 3% averages

can cause you to miss the market for specific

jobs.

Job Change

Head of Anesthesiology 24%

Banking Operations Manager 22%

Materials Control Manager 14%

Private Label Manager -9%

Health and Safety Manager -10%

Program Manager -13%


MISTAKE #8

Living by exception.

Creating and

enabling internal

inequity.


TIP #8

Fix the problem, don’t just move

it around.


MISTAKE #7

Going it alone.


TIP #7

Learning how to do it right will

help you expand your skills.

Poll Question:

I am confident I know all the

technology and software

available to me to help me do

my job best.

•True

•False


MISTAKE #6

Not using the proper

tools and assuming

you are paying at

market.


TIP #6

Ask for a price appropriate for

your company size.


MISTAKE #5

Being cheap –

saving money on

survey data.


RELATIVE

SURVEY

COSTS

Example:

for every $10,000,000 in salary

you spent $10,000 survey costs

= .1% of salary costs


What companies use free or very

inexpensive survey data?


TIP #5

Saving dollars on compensation

data or design is an expensive

way to save money.


MISTAKE #4

Diva syndrome.


TIP #4

Focus on what your people do,

not what your product or

service is.


MISTAKE #3

Thinking small – not

understanding the

competition.


TIP #3

Know your relevant recruiting

market.


MISTAKE #2

Assuming a 3%

merit budget is too

small to use for

differentiating pay.


VARIABLE

TIMING

INCREASES


TIP #2

Focus on the behaviors you

want to reward and think

outside the box.

Poll Question:

We have a training program to

train existing and future

managers on the necessary

skills to be good managers.

•True

•True, but not enough

•False


MISTAKE #1

Communication.

Communication.

Communication.

Not teaching

managers and

employees how the

system works.


TIP #1

All your work hinges on

managers being able to

communicate the message.


DON’T BUILD

THIS COMP

PLAN!

Kenexa top 10 compensation mistakes made by small businesses

Education

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