Employee Communications and Engagement Strategist
Employee Communications and Engagement Strategist
Hi, everyone –
As you may remember, we began the process of looking at our compensation structure and practices in late 2015. We engaged in this project based on our goals to:
pay employees fairly and competitively,
increase transparency and understanding,
align our rewards philosophy with our purpose, values and strategy,
provide trust and confidence in our compensation process and decisions, and
better manage our payroll, which has been rising at a faster rate than our revenue
Our objective is to have a new compensation system that is competitive, equitable, transparent and fair, so that people have increased confidence in our system and in their pay. We also need to have a financially sustainable model for the future.
The 2015 Compensation Study uncovered a lot of useful information about how we compare with other organizations in our industry on: the competitiveness of our salaries; promotion and turnover rates; and, payroll expenses. Throughout the study we questioned whether the shared salary increase was the right model for us, given feedback we received from our community and our interest in finding ways to recognize individuals’ unique contributions to the company. Last year’s shared salary increase announcement signaled that it was highly likely we would be eliminating the shared increase after 2016.
We want to share with you some recent decisions and information about what’s to come:
2017
Shared Salary Increase
We have decided on a phased approach to implement our new compensation system for the company, and as part of this plan we will provide a shared salary increase of 1.5% to employees hired before January 1, 2017. This will be the last year for a shared salary increase as we continue to move towards a program that is designed around individual recognition.
Budget for Individual Salary Increases
A key finding from the 2015 compensation study was that over the past several years, our salaries rose between 4.5 – 6% annually, compared to the industry average of 2.7 – 3%.
Last year, we budgeted total salary increases at 3.0%, where 2.0% was allocated for the shared salary increase, and 1% for individual promotions, expanded responsibilities, equity and merit adjustments. This year, our total salary pool budget is 3% of which 1.5% is planned for shared salary increase and 1.5% will be allocated to individuals. This shift to 1.5% for individual increases is aligned with our desire to more significantly acknowledge individual contributions.
2018
A New Compensation System
Our goal is to have a new compensation system in place by January 2018. In order to achieve this, there are a number of key elements planned for the coming months:
analyzing the results of recently benchmarked jobs from across the company;
defining formal salary ranges for jobs in all functions;
determining a method for assessing individual contributions;
developing a new process for salary increases and administration;
deciding on the balance of collective and individual compensation; and
providing training and education about compensation for leaders and individuals.
Next Steps
We will announce our new compensation system this fall, and plan to provide training for people in the first quarter of 2018. Along the way, we will be engaging our Compensation Steering Committee, the 16-member, cross-company team who provides feedback and recommendations, and we will be hiring a full-time compensation analyst, who we hope to have in place by July 2017.
If you have thoughts or questions about this announcement, we encourage you to contact a member of the Steering Committee: Allison King, Andre Plummer, Avery Casper Filbin, Dinc Urkun, Gail Ferguson, Jacqui Hoffman, Jane Delong, Jonci Cukier, Ken Pollak, Libia Casanova, Pam Yip, Patty Cambiano, Roslyne Shiao, Shari Simberkoff, Ted Freeman and Todd Nicholls.
You can also submit a question or share comments about this update by clicking here. We welcome any input you think may be helpful as we continue to develop our new system.
Shari and Ted