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  • The Top Three Reasons to Create Pay Grades

    What Pay Grades Can Do For Your Organization

    By Stacey Carroll, PayScale.com

    We talk about pay grades all the time here at PayScale, but not everyone understands why they are so important. So, without further ado, here are our top three reasons to adopt pay grades.

    3.      Easier to Administer Than Individual Ranges

    While this is not the primary reason for developing pay ranges, it is important. In job-based ranges, each job has a different pay range.  In some cases, the difference in one range and another may be quite small, even insignificant. 

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  • What’s the Difference Between Performance & Proficiency?

    Just Rewards For Your Employees

    Here at PayScale, we often talk about compensation philosophies answering 3 main questions:

    • How do you define your market?
    • How competitive do you want to be relative to the market?
    • What do you want to reward?

    In working with clients, I find they know the answers to the first two questions within a heartbeat. The third question, however, often leads them to stumble and to look to me for guidance. What are the options? What should we reward? At that point, I have to dig in deeper to their organization.

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  • In the Talent Wars, Compensation Matters. So Does Communication.

    Real Life Lessons From VerticalResponse

    By Tim Low, PayScale.com

    The PayScale Talent Wars event series hit San Francisco last week. Among other speakers, Kate Aughenbaugh, Director of HR at VerticalResponse, a Bay Area marketing and social media platform company, spoke about her experiences working with PayScale to implement a compensation strategy. 

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  • Managing Employee Pay with Ranges

    Options For Handling Outliers

    By Mykkah Herner, MA, CCP, Compensation Consultant at PayScale

    You've just finished benchmarking all your jobs. You’ve established some ranges for your positions. Maybe you even have a structure, with grades, to which you’ve assigned each position. You’re ahead of the game, with most of your work is behind you, right? Well, yes and no. Inevitably some employees will fall below your range, and some may fall above. Now it's time to manage employee pay based on the ranges you’ve developed.

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  • Building a Better Incentive Plan

    Blending the World at Work and Brad Hams Approaches

    By Mykkah Herner, PayScale.com

    Last month, I read and reviewed Brad Hams’ Ownership Thinking, and promised to write more on his sense of having the right incentives. While I thought he has some useful suggestions, I found his incentive plan to be both too prescriptive and too detailed.

    Ultimately, I find that World at Work, the experts in the compensation field, explain incentives best. So, rather than spend a lot of time on a plan that can use a little more cohesion and a little more variability, I’ll focus on World at Work’s explanation of incentive plans, and weave in some gems from Hams. World at Work focuses on three stages: pre-design, design, and implementation.

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  • Setting Merit Budgets This Year

    Is Three Percent the Right Merit Budget for Your Organization?

    By Stacey Carroll, PayScale.com

    I get the phone call a lot. It goes something like this, “Stacey, my CFO wants to know what the average increase other companies are giving this year so we can determine our merit budget. Can you tell me?”. I can. The short answer is from everything I’ve seen and read recently, most organizations are planning on giving anywhere between a two to three and a half percent increase in 2012. But, the better way to answer the question is: “Why is ‘what everyone else is doing’ our approach to compensation”? In reality, what your organization should pay as a merit increase for 2012 is going to depend on many factors – but here are just three.

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  • Listen Up, Mr. Scrooge! PayScale Compensation Plan Advice

    What We Would Teach Ebeneezer Scrooge About Compensation

    Image001“Bah, humbug! Why should I pay my people another dime?”

    Beware, Managers, don't follow Scrooge’s miserly ways when it comes to compensation. As the classic tale goes, through various ghostly visits, our friend Mr. Scrooge learns to get into the holiday spirit and finally rewards his hardworking employee, Bob Cratchit, with a raise and a "discussion of his affairs." How would PayScale advise Scrooge to adjust his compensation philosophy for long-term success?

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  • Handle Questions About Your Comp Decisions

    Are You Ready to Explain Each Employee’s Pay?

    How well can you explain your compensation plan to your employees? What if you were asked detailed questions by a valued employee about their pay? Would you be ready to respond?

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  • Non-Profit Compensation in a Down Economy

    Reality Check: Why Non-Profits Need to Evaluate Their Pay Practices in Today’s Economy

    The past few years have been tricky for many non-profits. Those that have weathered the recession have done so because they have had great financial advisors or have been really creative. While our private-sector counterparts may be starting to see the light at the end, many non-profits are still struggling.

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  • Comp Basic: Mean vs. Median

    The Difference Between Mean and Median

    Midpoint, market ratio, mean, median, merit bonus - I don’t know what it is with “m” words in compensation, but there are a lot of them and it can get confusing. Let’s try to simplify things by breaking down the difference between two commonly confused words: mean and median.

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  • Bon Voyage, Across-the-Board Increases

    Farewell to Across-the-Board Increases

    By Bridget Quigg, PayScale.com

    Everyday PayScale’s sales team, account managers and executive leadership talk to HR professionals about what is and isn’t working in compensation. We sat down recently with PayScale’s Chief New Business Officer, Dave Smith, to find out what he has learned from our customers and why he’s convinced that across-the-board increases are dead.

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  • Simple Incentive Plan Design

    Use “Line of Sight” to Keep Incentive Plans Simple

    More and more organizations are bringing incentives down to lower levels within the organization. They want employees to have a piece of their compensation that is variable. But, they often complicate their efforts.

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  • SHRM 2011 – Aligning Comp with Business Goals

    SHRM 2011: “Stupid Things” We Do in Compensation

    I learned a very important lesson during my first speaking engagement at the SHRM national conference: Be careful what you say. During my conference break-out session titled “Aligning Your Compensation Strategy with Business Priorities” I said, “I’m on a mission to eliminate the stupid things we do in compensation.” A writer from the SHRM newsletter was listening. Guess which quote led his article? Yep, you guessed it.

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  • How to Avoid Pay Compression

    Pay Compression: Our Nightmare in the World of Compensation

    Compression is the ugliest issue compensation professionals face. It tends to be a no-win, lose-lose situation, and the ways to deal with it are limited.

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  • Becoming a Certified Compensation Professional

    Becoming a Certified Compensation Professional (CCP)

    By Bridget Quigg, PayScale.com

    If you work in HR and want to find a way to advance your career, why not earn a Certified Compensation Professional certificate? This certification, offered by World at Work, requires you to pass nine tests and, as their website states, is a “mark of expertise and excellence in all areas of compensation.” Right now, several staff members at PayScale are working to earn their CCPs. We took a moment to interview one of them about how her process is going.

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  • How to Pay Remote Workers

    How to Pay Employees Who Work Remotely

    In my current capacity as Director of Professional Services at PayScale, I get the privilege of working with many different companies in many different industries to build their compensation plans. One of the most interesting observations that I’ve made in the recent months is how many companies, both big and small and from all different industries - tech to manufacturing - have employees who work remotely in home offices. And, paying these employees in different locations brings up some tricky compensation questions.

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  • The Advantages of Broadbanding

    The Advantages and Disadvantages of Broadbanding

    Broadbanding is the term applied to having extremely wide salary bands, much more encompassing than with traditional salary structures. Whereas a typical salary band has a 40 percent difference in pay between its minimum and maximum, broadbanding would typically have a 100 percent difference. Most of the time, creating enormously large bands is done as a measure to support a restructuring. It combines and consolidates the number of levels or job grades. This article will discuss the advantages of broadbanding in an overall compensation strategy, as well as the disadvantages.

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  • Executive Reality – Board Meeting Prep

    Help Your CEO Prep for the Board Meeting

    By Staff Writer

    We continue with our interview series with PayScale’s CEO Mike Metzger (see Helping CEOs with Compensation Planning) by learning what he has to say on the communication between an HR team and a CEO as they do annual compensation reviews and present their plan to the board.

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  • Employee Pay for Multiple Jobs

    Pay for Employees Performing More than One Job Q&A

    If you have employees who want to work additional jobs for extra pay, you need to make sure you are paying them properly. Nonexempt employees may be owed overtime, while exempt employees generally can be paid the extra compensation without affecting their exempt status.

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  • Helping CEOs with Compensation Planning

    How to Help Your CEO with Compensation Decisions

    Our recent 2011 Compensation Practices Survey revealed some useful facts about how compensation decisions are made at companies of all sizes. We noticed that small companies consistently listed the CEO as the person most responsible for final compensation decisions. So, we decided to interview our CEO, Mike Metzger, about how he approaches and likes to be helped with compensation decisions.

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