How to Develop an Organization Pay Policy

Use this guide to develop an organization pay policy for decisions that set competitive and reasonable pay ranges for each job in the organization as they relate to salary structures. In the process of evaluating different pay strategies, consider which may be appropriate in the context of your total rewards strategy and how they can affect your business performance.

pdf/How_to_Develop_an_Organization_Pay_Policy.pdf

ERI Executive Compensation Index

ERI's Executive Index is a quarterly report that measures trends in executive compensation using analysis of the companies included in the Russell 3000 index. The Russell 3000 is comprised of 3000 publicly traded U.S. firms that collectively represent roughly 98% of the investable equity market in the United States. The March 2015 edition of the ERI Executive Index specifically highlights compensation for three executive positions: Chief Executive Officer, Outside Chairman of the Board, and Outside Board Member (March 2015).

pdf/March_2015_Executive_Index.pdf

Pay for Insurance Company Board Members

To find out if director pay is more common in nonprofit organizations that are similar to for-profit companies, ERI used its database of Form 990 information, including financial measures such as compensation, revenues and assets in the Nonprofit Comparables Assessor, to examine the incidence of payment of board members. (January 2015)

pdf/Pay_for_Insurance_Co_Board Members.pdf

How to Set Competitive Compensation Structures

This learning aid serves as a resource for creating a competitive salary structure. Well-designed salary structures have compensation levels that are internally equitable, externally competitive, and cost-effective and deliver a positive business impact on the organization in several ways. Although the technical steps are the focus, the underlying process requires a cross-functional team of stakeholders working collaboratively to create a competitive salary structure. (January 2015)

pdf/How_to_Set_Competitive_Compensation_Structures.pdf

Employment Rates as Measures of Labor

Local salary differentials are driven by the relative supply and demand of labor. The greater the demand and lower the supply, the higher the average wage will be for the local labor market. The final criterion for labor market differences in terms of salary planning is the local wage rate differential; however, there are other statistics we can use to gain some insight into the individual components of the labor supply and demand equation. Employment and unemployment rates are two such indicators. We can look at how these rates change over time to see how local economies are moving. (December 2014)

pdf/Employment_Unemployment_Rates_as_Measures_of_Supply_and_Demand_of_Labor.pdf

What is Reasonable Nonprofit Board Pay?

Many board members of for-profit corporations receive pay for their work in guiding the company. However, the situation is very different in the nonprofit sector. Although there is no prohibition on paying members of these nonprofit boards, the IRS does require that compensation be reasonable and, to the IRS, that means that the compensation should be the amount that would ordinarily be paid for like services by a like enterprise under like circumstances. This is the same requirement that covers all executive compensation by charitable nonprofits. This whitepaper looks into the incidence and amount of compensation for board members in the nonprofit sector. (November 2014)

pdf/what_is_reasonable_nonprofit_board_pay.pdf

A Comparison of Salary Assessor and ERI Salary Survey Data

When evaluating research, a natural question is whether the results of the research match reality. Can the numbers be trusted? Will they improve the decisions that a manager makes? To answer these questions, a user might examine the sample size or methodology of a survey, which are both reasonable approaches for an individual to evaluate a data source. However, these techniques put the burden of evaluation on the individual user. Another approach is for the research firm to compare the results of one study to the results of a second, independent, study. A high level of agreement between the two studies lends credence to the accuracy of both studies. Simply stated, if we ask a question twice and we get the same results each time, we can have a higher level of confidence in the accuracy of the research methods. There are several ways to compare research methods, the most appropriate of which depends on the type of research being evaluated. In regards to compensation re­search, one way to examine the quality of research is to compare published results to data that were collected at the time of publication. The current paper performs this by comparing time matched independent datasets from ERI’s Salary Assessor and ERI Salary Surveys. (November 2014)

pdf/a_comparison_of_salary_assessor_and_ERI_salary_survey_data.pdf

The ERI Executive Compensation Index

The ERI Executive Compensation Index is a quarterly report that measures trends in executive compensation using analysis of the companies included in the Russell 3000 index. The Russell 3000 is comprised of 3000 publicly traded U.S. firms that collectively represent roughly 98% of the investable equity market in the United States. The ERI Executive Compensation Index specifically highlights compensation for three executive positions: (1) Chief Executive Officer, (2) Chief Operating Officer, and (3) Chief Financial Officer. This report will also discuss the fluid landscape for the benchmark and analysis of executive compensation packages. (October 2014)

pdf/Executive_Index.pdf

How to Plan Salaries

This learning aid serves as a salary planning resource. Salary is one of the financial levers used to attract, retain, and motivate talent. It is also the largest line item in financial statements, represents a fixed cost to the organization, and has a cumulative effect on cash flow. An effective salary plan requires involving the right stakeholders and working through a collaborative process. (October 2014)

pdf/How_to_Plan_Salaries.pdf

How to Establish a Cash Incentive Plan

Why develop cash incentive plans? Effective human resources programs depend upon achieving business goals (or return on investment). To reach these goals, HR professionals leverage the use of cash incentive plans which generally take the form of pay-for-performance plans. (November 2014)

pdf/CashIncentivePlan.pdf

How to Conduct a Job Evaluation

Why and how would you want to develop job evaluations? With the stiff competition for talent, a key differentiator for employers is offering career growth opportunities. Accordingly, systematic job evaluation becomes an essential part of the employer’s value proposition. Understanding the knowledge, skills, abilities ,and behaviors needed to perform the job responsibilties of a promotional opportunity can be a powerful motivator for an employee and creates a clear line of sight for career growth. (November 2014)

pdf/Job_Evaluation.pdf

How to Conduct a Job Analysis: Part 1

Why and how would you want to conduct a job analysis? With the high velocity of change in organizations, jobs and employee responsibilities are evolving more quickly than before. Understanding the impact of change on job responsibilities as it pertains to talent management and overall human capital strategy is at the heart of job analysis. You are trying to find out the what, the how, and the why of the job. (November 2014)

pdf/job_analysis_PartI_whitepaper.pdf

How to Conduct a Job Analysis: Part 2

Job Analysis Part I was a refresher for individuals who are familiar with job analysis. This follow-up paper, Job Analysis Part II, is intended to provide more insight and instruction for those new to job analysis. There are 7 major steps in a job analysis approach to designing a compensation system: 1. Select jobs and tools and methods, 2. Collect data 3. Conduct data audits 4. Create solutions by analysis 5. Integrate market data 6. Calculate averages and 7. Create ranges (November 2014)

pdf/job_analysis_PartII_whitepaper.pdf

CEO NEIP Payouts

By most indications, the economy is showing signs of strengthening at the time of this research. The Gross Domestic Product (GDP) in the United States expanded at an annual rate of 2.0 percent as of the end of the third quarter 2013, with the national unemployment rate hovering at 6.7 percent, and home sales improving, albeit at a sluggish rate. In tandem with this growth, we are seeing some executive pay-for-performance plans result in payouts above target. This paper will examine the magnitude of these payouts relative to the longer term sustainable performance indicator of the three-year Total Shareholder Return (TSR). (February 2014)

pdf/CEONEIPPayoutsFeb14.pdf

Controlled Companies

The stakeholder demographics of a publicly traded organization directly affect the organization’s culture as well as the compensation practices. In this whitepaper, CEO Compensation and Controlled Companies, we compare CEO pay level similarities and differences focusing on investor demographics, delineating controlled companies that have few majority shareholders and their non-controlled counterparts with diverse constituent shareholders. (January 2014)

pdf/Controlled_Companies.pdf

Salary Trends Among Medical Professionals

In this white paper, Salary Trends Among Medical Professionals: 1998-2013, we study how salaries have changed for healthcare professionals in the past 15 years. To examine the issue, a study was conducted which compared the salary changes of 113 occupations in the medical field, ranging from Medical Technicians to Physicians. All occupations used in this study were consistently tracked on a quarterly basis in ERI’s Salary Assessor®. (October 2013)

pdf/TrendsAmongMedicalProfessionals.pdf

Evaluating Survey Methodologies

While compensation researchers genuinely work to provide accurate information, there remain inherent strengths and weaknesses to different methods of collecting, interpreting, and reporting data. Compensation professionals who understand these strengths and weaknesses are better equipped to analyze the results for use in determining pay, setting salary structures, and evaluating established compensation systems. For the purposes of this white paper, we will highlight the pros and cons of three methodologies, all of which utilize employer-provided data: surveys from national statistics offices, traditional salary surveys, and salary survey analytics. (2011)

pdf/Evaluating-Survey-Methodologies.pdf