\ l ' 1 . \ \ l ' \ I r t \ t \ 1 . ' \ \ c l l l l ( l \ l ( t . t ; March 2329,2OO1'Paaci l rc

Creative compensation packageskeep employees

'Organizations wantto attract and retainthe best performersand are doing thingsdifferently for them,"said Scott Coolidge,director of Southegstper.formance andrewards practice for

Towers Perrin. *There are so manyfundamental changes in the way compa-nies do business. It has a huge influenceon the way people think about anddesign their pay programs."

Extending benefitsTraditionally special compensation

items like stock options went to higherexecutives with the most influence onwhere the money gets spenl Jobs per-ceived to have the greatest impact would

'

get the greatest reward-In the New Economy, nonmanage'

ment employees such as IT profession-als, engineers and logistics people makea substantial impact on a business. Now,a broader application of the coirceptsthat have been around for a long time inthe executive suite are being extendedfurther in the organization, Coolidgesaid. ::-.-

Towers Perrin developed a creafvecompensation concept called 'My Pay,My Way" that lets employees designpersonal compensation programs viathe company'sWeb site, trading oflbasepay, stock options and annual incentiveplans.

It all started at a conference board session in New York, when Towers Perrin'ssenior compensation expert, John Eng-land, made a presentation including theconcept of My Pay, My !Vay.

"One of the corporations wanted it"said Coolidge, whose company is nowworking on My Pay, \'ly Way for two cor-porations. "So we've been designing theprogram, looking into legal and taximplications. going through feasibililvstudies *'ith clients. etc.'

. Stock optlonsStock option.

"r" " much rarer privi

lege than they appear, according to theU.S. Department of laboCs Bureau ofIabor Statistics. In 1999, 1.? percent ofall private industry employies ii itrTUriited States received them, with1.5 percent in the South. Eli-minate privately owned compa-

nies from the math, because they ao-n'toffer stock options, and consider that ,most companies are privately owned.In 1999, 26.8 percent of emptoyees thatearned more than $75,000 annually andworked for public companies wereoffered stock options. Of employeesearning $50,000 to $Z4,ggg, 10.2-per-cent were offered stock options. And ofemployees earning $35,000 to $40,g99, i4.9 percent were offered stock options. i

lfou hear..more about it than is actu- jally happening,'said Michael Wald, 'regional economist for the Bureau oflabor Statistics for the Southeastregion.

Randgtad North Amerlca, Whichplaces workers thioughout the nation,offers variable components, like lever-aging its relationship to organizationsto offer discounts to its talent andclients.

Virginia Means carne aboard as man-aging directbr of human resources in1999, and reworked the compensationarea to create the Reward Center ofExcellence, offering a holisticapproach including work environment,benefits packages and stockoptions.

"I do agree that the highly skilledprofessionals are still demanding topdollar in the marketplace,'Means said."The truth is, from my perspective, thisis absolutely when stock optionsbecome most attractive. Now's thetime to buy; the market will go backup." D

Coolidge

By Anne MelfiCONTRIEUIING WRITER

Rewarding critical-skill employees hasbecome a creative pursuit for companiesthat want to compete for the best andbrightest without compromising sag-ging gross performance figures.

Much of the luster has gone out ofstock options, especially in the hard-hithigh-tech area, whose robust stock per-formance was the legal tender for com-pensating top talent. And cashcompensation has been tighter, accord-ing to the U.S. Department of laborBureau of Labor Statistics, which citesmodest wage increases for 1999 of3.9 percent nationally and 3.4 percent inthe Southern region, just onehalf of Ipercent ahead of inflation.

Companies must design their com-pensation packages with care.

'Companies aregoing to be more sur-gical and strategicwhen offering com'pensation packages,"said Ron Metz. direc-tor of the Southeasterncompensation practicefor Watson Wyatt

'You're going to see morepressure on base salary, especially intechnical areas. Companies are taking abroader look at the whole area ofreward, looking at total packages."

\{etz sees a re-emphasis on cash forperformance, supplemented by intangi-bles such as career development oppor-tunities, first-line leadership. trust andintegriry* to help rebuild the sense of loy-alt_v lost in the mercenary economy.

'The bloorn is off the rose of the'grassis greener'philosophy." said il{etz, rvhoexpects that employees who saw the dot-conr dot-bomb u'ill want to stay put andslow the u'hirlwind pace of job changingand recruiting.

iTetzWorldwlde.