Peter McKee’s Post

The annual compensation cycle is nearly every organization’s biggest expense with regard to not only the financial investment involved but also the time commitment needed from leaders. Making the manager experience as friction-free and simple as possible from beginning to end is key. Thanks for these important reminders Peter McKee. #compensation #totalrewards #humanresources #hr #leadership #talent

We asked HR teams and functional managers from 60 different companies about compensation planning: what's working, what's hard, and what's not working... One interesting area was the difference between how managers and HR view the process: ▶ 80% of the HR leaders listed “Coaching managers on the compensation review process” as among their biggest challenges. Many of them felt that managers didn’t take the process seriously, citing that their managers were constantly asking the same questions repeatedly, were “rubber stamping” approvals, and needed to be chased to complete their reviews. Not taking compensation planning seriously didn’t jive with what we've heard from functional managers, so we dug in on what they said too, and they were actually crystal clear about the importance. The survey showed: ▶ They perceived a successful compensation review cycle as a key factor in retaining employees, and they believed that fair and timely compensation reviews make employees feel valued. ▶ They believe that a well-executed compensation review cycle leads to increased team performance and engagement. ▶ They felt completing the compensation review cycle is important for providing clarity and transparency to employees about how compensation decisions are made. So if managers obviously understand the value of the process, why is it that their counterparts in HR don’t feel they’re taking the process seriously? ▶ When asked to evaluate the efficiency of the planning process in their organization on a scale from 1 to 10, the average rating provided by the managers was 6.07 ▶ When asked to assess their ability to easily access the necessary data and information for confidently making decisions regarding adjustments to their employees' compensation, the average rating was 6.13. Digging into some of the responses, it was clear that managers were consistently frustrated with the efficiency and effectiveness of the comp review process. They complained of outdated systems, the need for a centralized data repository, and the cumbersome nature of using spreadsheets for complex calculations. It's really obvious from the data that all parties involved see the importance of planning cycles, but the tools and processes are frustrating enough to leave many managers jaded and questioning whether their time is being respected. The takeaway? If you want to get the best out of your managers, focus on creating clear, simple workflows that empower them to make decisions with all the information they need. They know the value. You know the value. Work together to find the tools that will get you there. P.S. This is the reason we built Aeqium 🙂

Communication is key when setting up your merit increase/compensation planning cycle. Some interesting insights from our friends at Aeqium.

Creating a robust compensation plan is crucial for attracting and retaining top talent while aligning #employee performance with #businessgoals. In this article, we'll explore six must-have features in effective compensation planning. By incorporating these elements, you can ensure your $compensationstrategy not only motivates your team but also supports your company's long-term success. We'll also provide actionable recommendations and practical insights to help you implement these features seamlessly. - https://lnkd.in/ebVavfrf

To all you HR professionals out there: Does it feel like you spend six months of every year planning for a new compensation strategy, and then the next six months worrying about beginning the cycle all over again? If that sentiment hits a little too close to home, put down the Excedrin and give your stress ball a break. Perhaps you just need to overhaul the way you’re creating your plans. We cover how to do this in our article:

Curious if other people teams are adding new compensation planning tools in 2024? Here are two key insights courtesy of Novo Insights' recent survey 👇 1️⃣ There is a big shift towards cycle management solutions A whopping 56% of organizations without a cycle management solution are likely to explore a solution this year. Why now? The hundreds of HR professionals we talk to at Aeqium tell us their current methods aren't cutting it: - Weeks lost to cumbersome, manual spreadsheet prep - Error-prone processes - Managerial frustration, confusion, and lost time - Pressure for more auditable decision-making In a nutshell, they've realized using spreadsheets to manage their largest expense is not a viable strategy going forward. Novo Insights' Paul Reiman put it best: “Excel is the enabler of short-term success and the enemy of great impact.” 2️⃣ Companies with an existing solution in place are seeking an upgrade Of the teams with an existing solution, 47% are likely to explore a change. This isn’t surprising - HR leaders that switch to Aeqium consistently complain about their experiences with previous tools, most commonly: - The tools couldn’t match their specific needs - They were dependent on customer success managers to make changes - They were charged a fortune when they needed to reconfigure their systems Still wondering if a dedicated cycle management tool could be right for you? Here are four questions to consider: - Are you confident you’re applying your company’s merit budget effectively? - How much time does your people team lose running these cycles manually? - How much time do your managers spend reviewing employee compensation? - Are your cycles auditable? Can you explain the rationale behind the decisions? If you'd like to see what streamlined compensation planning looks like, we’ll build your cycle at no cost, risk-free in Aeqium to review with company leadership and your managers 🙂 Sign up here 👉 https://lnkd.in/dZEanYyX

How do you currently plan for your compensation cycle? Check out the article below from MorganHR, Inc.'s own Shari Nornes! Take some of the stress out of your process and make it repeatable!

Should employees ever be paid more than their direct managers? 🤔 It's a question that's subtly connected to another controversial compensation issue that we hear about at Aeqium fairly often: Should managers have visibility on their direct reports stock compensation? ▶ First, on whether employees should ever be paid more than their managers... Part of the reason there are mixed opinions on this is because it depends on your job architecture, so the right answer for one company or even one department within a company, may not be right for another. If you have a linear job architecture, i.e. in order to get promoted an employee needs to move into people management, then an employee should generally not be paid more than their manager. The manager should always be at a higher job level, so their pay should be higher. If however, you have a job architecture that splits into parallel manager and individual contributor tracks, then it's a different story. This is common in engineering job architectures, for example, where managers often have direct reports that are senior ICs at the same level as the manager (and sometimes even a level higher). In that situation, managers may have employees that get paid more than they do. This is a great example of why managers need to be educated on compensation policies, and why they need to be trusted to have the maturity to evaluate employee compensation independent of their own pay. ▶ So what about giving managers visibility on stock compensation? This can be a very controversial topic, and we often talk to companies that are hesitant or against providing this visibility. So, how are the issues related? The number one reason we hear to withhold this info from managers is that they may manage tenured employees who received stock grants at a much lower share price, and due to appreciation, are now vesting a large amount of stock relative to other employees at the same level. This also means they are often vesting significantly more stock than their managers. Employers are often very nervous about this case, which is really just one more reason an employee might be making more than their manager. Just like the job architecture reason, this situation can be navigated with an understanding of compensation policies and a bit of maturity. 💡 The lesson here? Educating your managers on how compensation works and trusting them to evaluate their team's comp objectively can solve both cases of a direct report having higher pay. AND arming them with that knowledge and pay data will make your managers much more effective partners in determining compensation, which means they will be much more effective at helping their team understand. We always recommend avoiding the situation where an employee has a compensation question for their manager, but their manager isn't empowered to help them. What do you think? How have you seen these situations handled?

Many HR practitioners who are tasked with compensation planning for their organizations are given a budget, but no strategy and no idea of where to start. Sound like you? If so, you may benefit from hiring a compensation consultant.

3 steps to aligning compensation planning with organisational goals https://lnkd.in/gq2YYXfg #Wellbeing #FutureOfWork #OKR #Reputation #OwnYouPerformance #CognitiveDiversity #HRTech #Personability #Development #ContinuousPerformance #EmployeeEngagement #Pulsitude #Synctrics #PulseSurvey #Synchronize