Creating Compensation

Ambassadors:

Engaging Managers To Willingly

and Effectively Talk About Pay

Louise Karp

PCL

Mark A. Szypko, CCP, GRP

IBM

© 2013 IBM Corporation

IBM Smarter Workforce

“If it were up to me…”

“My hands are tied!”

“HR made me do it!”

© 2013 IBM Corporation

IBM Smarter Workforce

Copyright Kenexa®, 2012 3

REALITY PERCEPTION

friends & family

coworkers

articles/publications

the internet

corporate culture

• Aligned to the

market

(median)

• Equitable

across

similarly

situated

employees

• Compliant

with relevant

statutes

• I’m not paid

enough for the

work I do

• I don’t know

why they pay

me what they

do

• My co-

workers who

do the same

thing make

more than I do

© 2014 IBM Corporation 4

Perceptions of Pay fairness over time

51%

55% 55% 54% 54% 55%

49%

57% 59% 58%

53% 50%

60%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 2005 2006* 2007 2008 2009 2010 2011 2012 2013

% o

f E

mp

loye

es

wh

o B

eli

eve

P

ay i

s F

air

Notes: WorkTrendsTM . * Data were not collected in 2006, so mean across all years was used.

© 2014 IBM Corporation 5

Impact of managers communication skills on employees perception

of pay fairness

Source: WorkTrendsTM 2013/2014 Canadian data

SA

A

N

D

SD

© 2014 IBM Corporation 6

Managers who feel comfortable having salary discussions

© 2014 IBM Corporation 7

Managers Belief In Organizations Compensation Philosophy

Source: WorkTrendsTM 2013/2014 Canadian data

© 2014 IBM Corporation 8

Managers Belief In Organizations Compensation Philosophy

Source: WorkTrendsTM 2013/2014 Canadian data

81% of Managers Feel Well Prepared with 2 or more.

SA

A

N

D

SD

© 2014 IBM Corporation 9

Employees: More Communication = Better (to a point)

25%

50%

75%

100%

0 1 2 3 4

Understand how pay is determined Know how to maximize pay

Number of communication methods used

© 2013 IBM Corporation

IBM Smarter Workforce

“It is up to me…”

“My hands are NOT tied!”

“HR helped me do it!”

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Number of Employees

More than 4,400 full-time professional and administrative salaried staff and more than 10,000 hourly tradespeople

Markets

Buildings, heavy industrial, and civil infrastructure

Annual Construction Volume

Over $7.5 billion

North American Headquarters Edmonton, Alberta, Canada

US Head Office

Denver, Colorado

Geographic Area

The United States, Canada, the Caribbean, and Australia

Portfolio

PCL is involved with more than 700 projects at any one time. These range in value from $20,000 to more than $1 billion and include office towers, residential condominiums, retail outlets, hotels and resorts, educational and health care facilities, casinos, sport and entertainment complexes, bridges, airports, high-tech facilities, water treatment facilities, petrochemical/power/oil and gas plants, and major plant maintenance shutdowns.

Ownership

100% employee-owned

PCL is a group of independent construction companies that carries out work across Canada, the United States, the Caribbean, and in Australia. These diverse operations in the civil infrastructure, heavy industrial, and buildings markets are supported by a strategic presence in 31 major centers.

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PROJECTS that Inspire

13

Canadian Museum

for Human Rights

Glacier Skywalk

Syncrude Plant

Employee Ownership Why be just an employee when you can be an owner?

Benefits for Employees

• 100% of the shares of PCL are held by its employees

• In addition to receiving competitive wages, employee shareholders share the profits that they help PCL to generate

Benefits for Clients

• Extraordinary performance by employee shareholders, motivated by a higher return on labour and investment, delivers outstanding value for clients

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PCL’s Compensation Philosophy Target Pay Competitively

• Comprehensive and competitive compensation package in each region in which we operate

• Regularly evaluate market competitiveness against our industry peer group

Pay for Performance

• Individual contribution and performance are factors considered when making compensation recommendations

• Recognizing and rewarding performance is critical to reinforce positive performance

15

Managers Equipped: Managing your projects… managing your people

• Supervisor toolbox – Accountability, administration, effective delegation, employee

development, employee engagement, team building

• Supervisor development – Supervisor fundamentals, formal training for supervisor,

coaching, mentoring, individual learning

• HR as a resource – Provide communication tools, coaching and feedback

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Managers Enlisted: Key players in structure development and implementation

Confirm job information and

evaluate jobs

Create job grades based on job value

Determine and validate market

benchmarks

Marry market pay to job value

Undertake pay analysis

Determine pay policy line

Determine salary ranges

Determine adjustment costs

and policies

Implementation and regular review for competitiveness

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Managers Educated: Base Salary Progression Over Time

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S a l a r y R a n g e Midpoint Minimum Maximum

Entry Zone CR <90%

Target Zone CR 90 - 110%

Max Zone CR >110%

Employees who: • are new to the role or in the

early stages of their career, or

• exhibit lower levels of proficiency, or

• demonstrate tolerable levels of performance

Employees who: • are seasoned in their career

and are top performers, or

• exhibit mastery, or

• demonstrate considerable capabilities and are expected to grow further

Employees who: • are proficient in their role

and still growing in their career, or

• exhibit competent proficiency, or

• demonstrate ability to take on larger/stretch role

19

Little to No Increase

Lower Performer Paid Higher

Average to Above Average Increase

Higher Performer Paid Higher

Nominal Increase

Lower Performer Paid Lower

Significant Increase

Higher Performer Paid Lower

Low

P

erf

orm

ance

High

P

erfo

rman

ce

Higher Pay

Lower Pay

Bonus Award and Share Ownership: Tied to Performance

Performance Bonus Award

• Individual, organizational and business unit performance are all factors in determining annual bonus awards

• Additional recognition for Star employees

Share Ownership • Employees who have

demonstrated commitment to the company and have significant career potential within PCL are considered candidates for share ownership

• Additional recognition for Star employees

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Managers Empowered: Arming managers to be compensation ambassadors

• Enabling managers to “comfortably” have meaningful conversations regarding compensation with their employees

• Reinforce and drive high performance

• Which leads to reduced HR-related costs

my CAREER. my COMPANY. my LEGACY.

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Questions?