Compensation Analysis with Workflow and Risk Assessment
The project has 6 stages, whose detailed description follows below:
1. Job descriptions
Assessment of current job descriptions (if available) and adjustments.
The goal is to understand, from the company´s perspective what is expected of each position. The main questions that this analysis needs to answer are: who, how and what?
The final job description will include:
1. Education, Training, and Certifications/Licenses 2. Required Experience 3. Problem Solving/Ingenuity 4. Attention/Stress (Concentration/Time Pressure & Interruptions) 5. Independence of Action/Responsibility 6. Contacts with Others/Internal/External 7. Supervision Received and/or Given to Others 8. Consequences of Action/Decisions Made on the Job 9. Equipment Used 10. Working Conditions 11. Physical/Mental Demands
By using both methodologies: Business Model Generation (A. Osterwalder) and the “Universal Competency Framework”, we will be able to understand how business should run, the processes that should be in place, as well as what is needed (both in hard and soft assets) to make that happen.
BMG Canvas Assessment Model:
This tool will enable the company to identify and understand possible roadblocks on a position´s performance and clearly answer the question: does the position have what it requires to deliver what is expected?
The Universal Competency Framework:
It is a single underlying construct framework that provides a rational, consistent and practical basis for the purpose of understanding people’s behaviors at work and what is required for an employee to able to succeed in a certain role and in certain environments.
It is important because it builds on and moves ahead of the current state of the art in competency modelling and competency-based assessment. In the past, organizations have understood competencies only in the context of competency dictionaries, which have perhaps comprised up to 60 competencies out of which they have chosen a sub-set of what they consider to be the most relevant. The UCF, on the other hand, supports a more structured approach that is evidence-based (see Bartram, 2005).
The Framework provides comprehensive coverage of the job competency domain including:
■ Our standardized competency models, including Perspectives on Management Competencies (PMC), Inventory of Management Competencies (IMC), Customer Contact Competency Inventory (CCCI), Directors Development Audit (DDA), and the Work Skills Competency Inventory (WSCI)
■ Models developed by other providers (e.g. Hay, PDI, DDI, MCI, Lominger)
■ Models developed by our clients and for our clients.
It also provides the basis for developing new competency-based approaches to selection and development and it is backward compatible with our competency-based assessment products, such as Decision Maker, IMC, PMC, CCCI, and structured application form (SAF) generation.
2. Employee current scope vs. Job Title
Once the job description part is finished, we can assess how the current manpower fits into the overall picture. Are they aligned with what the company expects of that position? Do they know their responsibilities/handle the expected tasks?
This will be done by conducting personal interviews with the position holder, leadership and peers.
This is NOT a performance assessment, it is intended only to answer if:
A) The employee knows what is expected of him/her B) The employee current scope is aligned to what his position holds
Report will be presented per employee comparing current situation to job description and possible deviations. A detailed, incumbent-specific allocation list for each position included in the study will be prepared, specifying current and proposed classification title and the impact of our recommendations (reclassification – upgrade or downgrade, title change, or no change).
3. Gap/Financial risk exposure analysis
Based on the previous assessment, we will conduct a gap/financial risk exposure analysis. Is the company exposed? If so, how? Analysis will be done considering:
- Overlaps/Lack of responsible – are 2 people in charge of the same process? Is no one clearly responsible for a certain task? - Employee current scope (is a coordinator performing as a manager?) - Legal (are 2 people performing the same tasks with different pay? Is it necessary to monitor external sales working hours? Do we have documentation to avoid claims on fringe benefits?)
Included in the report are: - Financial risk exposure description - Legal grounds (if applicable) - Chances of financial losses (high/average/low) - Recommendation
4. Compensation Analysis
To determine the prevailing rate for a job, we will "benchmark" your current compensation practices against compensation surveys that are detailed and specific to your companies' industry and region (up to 50 miles ratio).
A labor market consists of those employers with whom the company competes for employees. The criteria typically utilized in identifying those employers includes the following:
• Employer Size - As a general rule, the more similar employers are in size and complexity,the greater the likelihood that comparable positions exist within both organizations. Specifically, agencies of similar size to the Company are likely to have departmental structures and organization of positions more similar to the Company than organizations that are significantly different in size. The specific criteria utilized to evaluate size include population served, services provided, and number of employees.
• Geographic Proximity - Geographic proximity is another factor utilized in identifying an appropriate labor market. This factor is particularly important because it identifies those employers with which the Company must directly compete to recruit and retain quality staff. Furthermore, by selecting employers within reasonably close geographic proximity, it ensures that the resulting labor market will be indicative of the region's cost of living.
• Nature of Services Provided - As a general rule similar organizations are selected as survey employers, because they all provide similar services. This is important for the following reasons: - Employers who provide similar services are most likely to compete with one another for - employees. - These employers are most likely to have comparable jobs. - These employers are most likely to have similar organizational characteristics.
This will result on a comparative compensation market survey (salaries plus bonuses) using a set of appropriate comparator agencies. The identification of comparator agencies, benchmark classifications to be collected is an iterative process that includes all stakeholders. Once the external data development is completed, we will make specific recommendations for internal equity for non-benchmarked classifications and classifications without a large enough market sampling.
5. Benefit Analysis
Following the compensation analysis, we will we match your current benefit practices against benefits surveys that are detailed and specific to your companies' industry and region (up to 50 miles ratio). The benefit analysis includes:
- School allowance
- Meal Ticket
- Health Care
- Private Pension
- Life insurance
- Mileage reimbursement
Analysis will conducted by using local workforce competitor companies (different sectors, same skills requirements) and business competitors data. It will be used to evaluate benefit offerings in the labor market and make recommendations for better alignment and/or different benefit offerings as indicated by the analysis and best practices;
6. Action plan/financial analysis
Based on both reports (Salary & Benefit), we will provide a recommendation for total salaries and benefits, including the total compensation package of insurance and other benefits (including paid leave) and prepare recommendations for compensation rules, and policies, including variable/incentive pay options, to maintain competitiveness, reward employees, and ensure equity.
Our report will make recommendations regarding a salary structure that takes the company’s compensation preferences into consideration as well as the local regulations.
Report will include:
- A proposed Salary Range document;
- A procedure to address employees whose base pay exceeds the maximum of their newly assigned pay range;
- Implementation issues and cost projections surrounding our recommendations; and
- A guide for rules, policies and procedures for the Company in implementing, managing and maintaining the compensation system.