From Job Classification to Performance and Compensation Management

Job Evaluation
2 major objectives: 1. Establish a logical hierarchy of jobs 2. Establish the proper relative distance between jobs within the hierarchy

The common elements of Job

Accountability Know How Problem Solving

The common elements of Job

Accountability - Job exists to achieve end results Know How - To carry accountability job holders need to be equipped with a fund of skills and experience Problem Solving - In utilizing know-how to achieve end results job holders must address and resolve problems

Evaluation Criteria
The KNOW-HOW required to SOLVE the PROBLEM and achieve results for which it is ACCOUNTABLE

Hay Job Evaluation

Know-How score in Hay Points + Problem Solving score in Hay Points + Accountability score in Hay Points = Job Evaluation in Hay Points

Job Class System

Job Class Sub-class Hay Points Range

A-1 A-2 A-3 B-1 B-2 B-3 C-1 C-2 C-3 D-1 D-2 D-3 E

275 - 350 351 - 425 426 - 500 501 - 550 551 - 600 601 - 675 676 - 765 766 - 870 871 - 985 986 - 1080 1081 - 1185 1186 - 1300 1301 and above

Performance Management

Best practices in Performance Management

Improvement Staffing Decision and Professional Development Coaching And Guidance

The Functions Of Appraisals

Termination And Legal Obligation Compensation And Reward Feedback And Communication

Performance Management Process

Step one: Performance Planning

Step two: Interim Reviews of Progress Against Objectives . Providing feedback and coaching

Step three: Conducting the Formal Performance Review.

Performance rating distribution

60% 50%

40% Top 100 companies

30%

20%

10%

0%

Rating 1

Rating 2

Rating 3

Rating 4

Rating 5

Objectives of Compensation Management

Internal equity External competitiveness Affordability Recognition Motivation Legislative compliance Proper communication Continuous review

Compensation Principles
Performance-based pay Competitive pay Ownership Leveraged pay

Elements of Total Compensation (TCM)

Base Salary Annual Incentive (AIP) Stock (LTIP) Special Rewards Benefits

Base salary increase considerations

How has the employee performed ? How does the performance compare to that of their peers ? Where does the employees salary fall in the salary range ? How does the salary compare to that of their peers ?

Merit Increase Guidelines

Salary Ratings Range

Compa-Ratio

Entry

Market

Premium

1 2 3 4

100000

Med

80000
D9

60000

Q3

40000

Q1 D1

20000

0 0 200 400 600 800 1000 1200

Hay Point

Merit Increase Guidelines

Inflation % Source
Salary Range Entry 65% - 85% 40,000 12% Market 85% - 115% 10% 80,000 8% Premium 115% - 135% 8%

Country

Ratings
OU Outstanding VG Very Good

10%

6%

GD Good
AV Average PR Poor
7/1/2013

8%

6% 60,000 4%

4%

6%

2%

0%

0%

0%
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