adventure works sales proposal

Essential Compensation

Practices for Today’s Workforce

Guest Presenter: Tim SilveraOptimum Comp Advantage, Inc.

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TalentTakeawayswebinar & podcast series

Talent Takeaways Series

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The Sponsor


Compensation Management Made for Managers

AGENDAWebinar Info


We are informal (and fun)

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Q&A Session at end

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AGENDAAbout the Presenter


Tim Silvera is a total rewards expert with over 25

years of corporate and consulting experience in

designing and implementing innovative total

rewards practices that engage employees to

drive business results and build results-driven

cultures. His expertise includes executive and

broad-based compensation, variable pay

design, performance management and sales

compensation. Tim’s experience spans domestic

as well as global compensation in high-tech, life

sciences, medical device, real estate,

manufacturing, energy, mining, retail,

outsourcing, healthcare and many other

industries.

What is Important to Today’s Workforce?

1. Top motivating factor: competitive base pay.

2. Strong motivating factors: career opportunity and incentives.

3. Strong attraction tools: non-traditional benefits.

4. Weak motivating factor: traditional merit increases.

5. Main issues to address: tying competitive base pay and incentives to the value and results each employee brings to the company.

6. Equity only a motivator if company has competitive base pay, career opportunities and interesting/challenging work.

7166

62

45

0

10

20

30

40

50

60

70

80

Ages 25 to35

Ages 36 to45

Ages 46 to55

Ages 56 to65

% of respondents ranking competitive base pay

as their top motivating factor.

92

86

82

78

70

75

80

85

90

95

Ages 25to 35

Ages 36to 45

Ages 46to 55

Ages 56to 65

% of respondents ranking competitive base pay and

incentives within their top 3 motivating factors.

6

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Poll Question #1

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Does your company have a traditional “Pay for Performance” compensation

philosophy?

Yes or No

Pay-for-Success Compensation Strategies Guiding Principles

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Essential Total Rewards for Today’s Workforce

Philosophy, Strategies & Guiding Principles

Reward Strategies Guiding Principles

Engage Employees with Transparency

Share the how and why of compensation and benefit practices with employees. Use

modern compensation and benefit practices to engaged employees.

Use Rewards to Create a Win-Win Partnership

Provide employees the opportunity to share in the company’s success and create a

positive results-driven culture.

Integrate Rewards and Performance Practices

Tailor rewards and performance practices to address the unique needs of each

workforce segment, business unit and function; create a positive reward and

performance experience.

Use a Market-driven Total Rewards Approach

Establish a competitive position for each component of total rewards to ensure the

effective use of the company’s limited resources; differentiate market position for

high-impact jobs.

Reward Individuals for Their Value

Link competitive base pay to each employee’s job and ongoing value based on

consistent results and demonstration of leadership and core behaviors.

Reward Individuals and Teams for Their Results

Reward individuals and teams based on goals and metric achievement. Accelerate

rewards for overachievement and impact on business success

Supply Competitive and Cost-effective Benefits

Supply employees with competitive and modern benefits that are valued by

employees in each local market.8


Performance Optimization

FROM TO

Manager driven Employee/manager collaboration

Annual performance reviews Real-time, continuous process

Cascading goals Goals and metric alignment

HR process Business process

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Simple and Positive Performance Ratings

Progressing

Successful

Highly Successful


Performance Optimization

Purpose: measure consistent results and demonstration of competencies. Align

incentive plans to measure and reward results and impact on business success.

Together, these programs engage employees to drive business results and build a

success-driven culture.

Performance

Optimization

Tools

Value Results

Base Pay

Consistent results

and demonstration

of required

competencies

Variable Pay

Results and

impact on

business success

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Base Pay

FROM TO

Grades or bands Career tracks

External and internal equity Market competitive (key jobs)

Annual merit increases Base pay increases based on individual value

SecretiveManager and employee conversation about

pay and value

HR controlled Business controlled with HR guidelines

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Poll Question #2

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Does your company assess the competitive market for compensation trends annually, every 2 years, every

3 years or don’t know?


Career Track Job Structure

Definition

Process

1. Identify the unique job groupings within each function in your organization, usually called job families.

Build cross-functional leveling guides.

2. Decide how many job levels within each job family are needed now and in the future so employees

understand the career progression available to them within your company.

3. Once you decide the number of levels, update or write job profiles that detail the scope and

responsibilities of the job, plus the skills, knowledge and experience required at each job level.

4. Ensure that there is clear differentiation between jobs at each level.

5. Market price each job - the market pricing process takes each job in your structure and matches it to

jobs within a compensation survey.

6. Make the appropriate survey job matches, create a competitive base pay range, and establish target

incentive for each job within your structure.

Career tracks are clear career/job progression for each function.

Career tracks include competitive base pay ranges and target incentives for each job.

Career track enable informed pay decisions based on the competitive market for a job

and the employee’s value.

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Methodology: Market Pricing Process & Competitive Pay

Competitive Pay

$Analyze jobs by reviewing job

profiles, organizational

structure, and leveling guides.

Find the job match in salary

survey by comparing

responsibilities, scope,

skills, experience required,

etc. of each job.

Create competitive

base pay ranges, target

incentives and equity

ranges for each job.

Software Engineering

Sr. Director, Software Engineering

Director, Software Engineering

Sr. Manager, Software Engineering

Manager, Software Engineering

Principal (Lead) Software Engineer

Sr. Software Engineer

Software Engineer II

Software Engineer I

Associate Software Engineer

Sr. Programmer / Analyst

Programmer / Analyst


Sample Competitive Compensation

Level Software Engineering Entry Market TopTarget

Incentive

SM5 Sr. Director, Software Engineering $129,400 $152,200 $175,000 $20,000

SM4 Director, Software Engineering $118,400 $139,300 $160,200 $20,000

SM3 Sr. Manager, Software Engineer $106,000 $124,700 $143,400 $6,000

SM2 Manager, Software Engineering $84,200 $99,000 $113,900 $6,000

P5 Principle (Lead) Software Engineer $92,700 $109,100 $125,500 $6,000

P4 Sr. Software Engineer $79,400 $93,400 $107,400 $5,000

P3 Software Engineer II $71,800 $84,500 $97,200 $4,000

P2 Software Engineer I $49,300 $58,000 $66,700 $4,000

P1 Associate Software Engineer $45,600 $53,600 $61,600 $3,000

NE3 Sr. Programmer / Analyst $42,500 $47,200 $51,900 $2,000

NE2 Programmer / Analyst $34,100 $37,900 $41,700 $0

Base Pay Range


Short-term Incentive Plan

FROM TO

One size fits all incentive plans Custom incentive plans

MBOs Goals and metrics

Weighted metrics Modifier approach to metrics

Similar payouts based on levelDifferentiated payouts based on team or

individual impact on business results

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Short-term Incentive Plan• The purpose of the plan is to motivate participants to achieve and exceed revenue, EBITDA and

individual goals.

• Annual target incentive equals $XX.

• Annual payouts are calculated by multiplying the participant's annual target incentive by the

Revenue/EBITDA and individual performance modifiers.

• Straight-line interpolation between performance levels with accelerators and decelerators for

Revenue/EBITDA. The revenue/EBITDA modifier is capped at 150% and the individual performance

modifier is capped at 120%.

• Below Threshold results on Revenue/EBITDA equates to a 0% modifier and no payout.

• Not Acceptable individual performance rating equates to a 0% modifier and no payout.

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Individual Performance Levels and Modifiers

RGP Values Acceptable Progressing Successful Exceptional

Individual Goals/KPI AcceptableBelow

Target

On

Target

Above

Target

0% 50% 80% 100% 120%

Revenue/EBITDA

Modifier

0% to 150%

Payout

$

Annual

Target Incentive

$

x = x

Individual Performance

Modifier

0% to 120%

EBITDA/Revenue

Threshold (E) $90M

Target (E) $100M

Stretch (E) $120M

Stretch (R) $660M

100% 125% 150%

Target (R) $600M

75% 100% 125%

Threshold (R)$540M

50% 75% 100%

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OCA Team Bios

Tim is a total rewards expert with over 25 years of corporate and consulting experience in

designing and implementing innovative total rewards practices that engage employees to drive

business results and build results-driven cultures.

His expertise includes executive and broad-based compensation, variable pay design,

performance management and sales compensation. Tim’s experience spans domestic as well as

global compensation in high-tech, life sciences, medical device, real estate, manufacturing,

energy, mining, retail, outsourcing, healthcare and many other industries.

Graduate of California State University, Hayward with a bachelor's degree in business

administration, with an emphasis in HR and finance. Tim also holds the following designations:

Certified Compensation Professional, Certified Global Professional in Human Resources, Master

Human Capital Strategist and Executive HR Professional from Stanford University

Tim Silvera, President

Optimum Comp Advantage, Inc.

Mobile: 760.330-6607

[email protected]

OCA’s consulting practice specializes in designing essential compensation and performance practices

for today’s workforce.

We specialize in executive and broad-based compensation studies, which include a

comprehensive market study for base pay, annual incentive targets, target total cash, and

equity. In addition, we design short and long-term incentive plans to align and reward

employees and executives for delivering financial and non-financial results.

We also specialize in sales compensation designs and practices, which are based on our

extensive experience and deep expertise. Our mission is to design effective sales

compensation practices that motivate and reward sales professionals to achieve and

exceed the company’s business strategy. 20

About Optimum Comp Advantage, Inc.

OCA’s consulting practice specializes in designing essential

compensation and performance practices for today’s

workforce.

We specialize in executive and broad-based compensation studies,

which include a comprehensive market study for base pay, annual

incentive targets, target total cash, and equity. In addition, we

design short and long-term incentive plans to align and reward

employees and executives for delivering financial and non-financial

results.

We also specialize in sales compensation designs and practices,

which are based on our extensive experience and deep

expertise. Our mission is to design effective sales compensation

practices that motivate and reward sales professionals to achieve

and exceed the company’s business strategy.

21

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