Global Software Company was concluding a total redesign of their sales organization to transition from team-based selling to account-based product specialization. All of the sales roles were redefined. New sales management and individual contributor roles were identified. Accounts were classified and assigned. All of the compensation plans supported sales teams thus requiring a total redesign. The organization transition was targeted for January 1st and there was concern that the “noise” from the anticipated changes would affect fourth quarter results.
We first developed a detailed project plan that identified project roles and responsibilities as well as necessary touch points that would involve the sales organization. Transitioning from team-based to individual rewards required an evaluation of the prior three years of sales history in order to identify and assign sales performance to individual roles.
Market analysis was performed in order to establish a Total Targeted Cash with mix and leverage for each selling role. A variety of commission-based sales incentive plans were developed along with sales bonus plans in order to continue to support the group culture. Finally, sales leadership rewards were designed and implemented to provide greater linkage to organization performance.
With the total redesign of the sales compensation plans, a significant effort was placed on the communications and implementation aspects of the project. We developed individual modeling tools for each sales role to allow the individual to play “What if” scenarios on their own. We returned at 6-month and year-end to analyze and evaluate the redesigned. Finally, small modifications were made in the plans for the next fiscal year.
Mature building products manufacturer had a gone through a sustained period of stagnant sales. Recent business reevaluation resulted in a decrease in the breath of the product line. Go-forward market strategy had been revised to focus on sustainable profitable growth. The current sales compensation plan was designed to reward solely for top-line growth; whereas, the desire was for a redesign of the sales incentive plans to reward for a multiple of performance metrics.
We worked closely with Sales Leadership to identify possible performance measurements of profitability. Further, we work with the financial reporting team to assure the organization’s ability to track and measure the desired performance metrics. We redesigned the sales incentive plans that 1) modified top-line sales measures to include minimum levels of performance versus quota, and 2) included a second performance element that represented margin dollars achieved. With the addition of the new metrics into the sales incentive plans, we performed detailed financial modeling in order to quantify the risk liability.
During the first year under the revised plan, a considerable effort went into continuing education of the sales organization in order to communicate the different profitability of the different product offerings. The second year under the redesign, the organization achieved their top-line sales forecast and was very close to their profitability goals.
A government contractor recently audited by the Dept. of Labor faced issues with proper classification of several positions under FLSA. Following the audit remediation actions, the organization’s HR leadership determined that an independent audit of a broader set of positions was necessary to mitigate further compliance concerns and possible penalties by the DOL. In addition, training for recruiters and HR generalists (and eventually managers) was necessary to reduce the likelihood of FLSA misclassifications in the future.
Our consultant worked with the internal HR team to identify several job families of positions where FLSA misclassification seemed likely due to the nature of the work. A project plan and job review methodology was established to provide the HR team with a repeatable framework and process they could complete on their own. The consultant oversaw the project timeline, assisting the HR team where necessary to collect the required job information to correctly assess the FLSA statuses.
Based on the results of the FLSA assessments, the consultant recommended an approach to make the FLSA corrections, some of which required back pay calculations. Equally important, more stringent job classification guidelines were established to clearly delineate exempt versus nonexempt duties within each of the targeted job families. This was critical for ensuring FLSA compliance on a go forward basis.
Train-the-trainer style briefing was delivered to the recruiting and HR generalist teams, who in turn provided a modified version of the training to line managers. The FLSA training material has continued to be modified and updated, and has become part of the mandatory management training program for the company. As managers are increasingly held accountable as stewards for compliance in their companies, the inclusion of FLSA along with other critical employee-related regulations into such training programs will reduce the likelihood of costly penalties and ensure employees are protected as intended by such laws.
A major publishing corporation was planning to merge their digital lines of business with the traditional print media business. Decisions had already been made regarding the departments from the two separate entities that were to be merged, and the key roles that would likely be impacted. The business sought assistance in assessing and addressing the compensation impact of this major organizational and business paradigm shift. The project encompassed all management levels below the C-suite.
Initial efforts focused on understanding and documenting the organizational changes and consequent changes to the scope of responsibilities of the targeted positions. It was critical to identify how the organizational changes would impact the managers’ functional areas of responsibility, size of staff and budget, and how closely aligned was this function to the strategic vision of the corporation (still operational in nature with little change vs. expected to be a significant driver of revenue).
A visual representation of the new organizational structure and job hierarchy was developed and confirmed with senior management. Management jobs were then benchmarked to industry compensation surveys to determine the total cash compensation targets, and a gap analysis was performed for the incumbent managers. The analysis was then overlaid with the organizational analysis, and a set of recommendations to either adjust or freeze salaries and bonus targets was presented to the executive team.
Despite the continual moving parts of the organizational change, the hands-on approach which engaged many levels of management to obtain the insights needed for the compensation analysis was a success. Following the study and recommendations, the organization’s Compensation Manager would be able to update the master job hierarchy based on subsequent changes to job assignments and therefore be able to assess whether base and variable pay levels would no longer be consistent with their overall pay program and strategy.
A software company with approximately 600 employees across a dozen locations was experiencing challenges with the competitiveness of their base and variable pay practices. Initially a fast growth company, the business had reached a stable revenue stream and size of staff, while the changing market demand for technical talent over the period of growth resulted in disparities in compensation which ran counter to their pay strategy. With staff salaries being the company’s main expense, they needed an assessment of compensation competitiveness — as well as an ongoing benchmarking approach to keep them on track with market pay practices. Of particular concern was the competitiveness of the technical staff members who are instrumental to the development of products and solutions for the company’s customers.
An in-depth review of the organization’s structure and technical jobs took place, as well as a comparison to the relevant market. The company’s existing job structure had not been aligned to adequately reflect the most senior levels of jobs (and compensation) that exist in the marketplace for software professionals.
The consequent practice of positioning senior talent into lower-than-market pay bands was causing salary compression and related pay equity issues. Through identifying and prioritizing the issues and concerns with senior management and the HR team, a new market-based job leveling structure was established. The study also confirmed that variable compensation practices were not being targeted correctly for the most senior individual contributor technical staff. The project team benchmarked and developed salary ranges and incentive bonus targets using salary surveys specifically geared to the high tech industry. Job grades and salary bands that overlapped management levels (“dual track”) were also implemented to ensure the highest level of technical talent would be competitively compensated.
It is not uncommon for fast growing organizations to require a “reset” of their compensation practices once they reach a more stable organizational structure and headcount, or even following a period of inattention to the compensation structure. This company lacked any market benchmarking process to determine a competitive range of pay and bonuses, as well as some fundamental job grading structure to provide titling flexibility yet maintain a competitive pay program for the long term.
The new program allows managers to easily track the progression of junior- to consulting-level software engineers and programmers against an annually updated market-based salary curve. The establishment of new job leveling guidance provides a high level of confidence that employees are fairly and equitably compensated. Incentive targets are clearly tied to market for certain technical roles that have leverage in their line of business. In addition, geographic pay differences were analyzed for the various work locations, and the new location-based adjustment guidelines are used by HR.
A privately-held Financial Services Company received a cash infusion by a private investment company with the primary objective of funding growth. Previously, the bonus plans were subjective and discretionary. With the advent of new growth expectations, there was a desired to implement formal bonus arrangement tied directly to the performance of the organization.
The culture of the company was also in a state of transition. Previously each division operated independently with very little perspective of the rest of the organization. Intra-Division cooperation was deemed a key driver of growth for the organization.
We led a management advisory team to work through some of the cultural issues that would impact the financial performance. The advisory team identified the possible key performance measures as well as the hurdles for success.
We recommended an annual bonus plan that contained three elements: Corporate, Division, and Department. The Corporate component contained two metrics that were directly tied to the annual forecast. We worked with each Division head to identify two key performance metrics for the fiscal year as well as to cascade the metrics down to each Department in order to develop supporting measures. Finally, we developed communication material to launch the Annual Bonus Plan company-wide. The communications plan contained four features: CEO announcement letter, Division presentation, Bonus Plan Workbook, and all employees Q&A’s
While the Group Bonus Plan was implemented, the process uncovered a host of organizational issues that required further exploration and resolution. The bonus plan was deemed a management tool that supported the organizational transformation.
Our client, the consulting and services division of one of the United States largest Department of Defense contractors, had worked with consultants for a number of years on their compensation strategy and program design. So they turned to us again when it came time to cost-effectively update their base pay program for over 3,000 employees across the United States, ensuring its continued compliance with FAR and DCAA regulations.
We first worked with HR leadership, BU Heads and Program Directors to define specific labor markets for comparison and identify any particular competitiveness issues that should be further investigated. We developed a market benchmarking strategy from these discussions and selected those surveys and resources form our library of over 100 publications that fit the strategy. For those competitiveness issues articulated by our client but not clearly covered in published surveys – bay pay differences for cleared personnel for example – we enlisted the help of our network of colleagues and clients in the sector to fully understand current market practice.
Using our proprietary technology and time-tested processes, we quickly developed market rates on over 100 job family career levels that covered over 500 client- and contract-specific job titles in 17 different geographic markets. We used these data to update our client’s base pay ranges, annual increase budgets and annual incentive targets. We updated and further refined their compensation administration manual to fully document the job analysis approach, job evaluation system, market strategy, job grading system and pay administration policies.
A large multi-industry technology-based company with over 10,000 North American employees had recently been acquired by a larger, international company. This acquired company was a combination of previous acquisitions, each with its own compensation framework and policies.
In preparation for the acquisition, it became apparent to senior executives that it was imperative to bring all its compensation programs under one umbrella to further its go-to-market success and its ability to remain autonomous after the acquisition. It was also apparent that this umbrella should remain de-centralized, so that each company could continue to compete as it needed. As an additional charge, this consolidation needed to be completed in 8 months.
Having painfully worked through a similar process for its health and welfare benefit programs, the company met with us to first seek advice on the feasibility of the task, and then to determine what role, if any we could play is assisting. After carefully listening to the objectives, we worked closely with the company to create a project team consisting of 16 company representatives and 3 of our consultants. The company representatives would primarily be charged with representing their company and completing the day-to-day work tasks to the extent their expertise allowed them to do so. They were also charged with front line communications to their company senior management and employees. The main components of our role encompassed four areas:
- Leading client team in project planning and management,
- Providing technical design guidance,
- Developing strategies to ensure business unit commitment, and
- Completing analytical tasks beyond the expertise of the client team.
High growth, closely-held wireless telecommunications company had but one charge: create and grow a company that added value on its own merits and build value in the company’s strategic partner.
Some talent existed in house, but additional key talent was needed through acquisition and organic hiring. The company realized that it did not have a consistent focus among its executives nor a cultural identity of its own.
Founders and investors was the value proposition for its leaders and key employees –cash compensation and equity should provide the desired reward for their value creation when the company went public.
Defined desired reward strategy and environmental context. Developed programmatic elements, including base pay and short- and long-term incentives. Deployed programs and communication strategy.
The simple and direct value proposition delivered real capital value post-IPO to those leaders and key employees who drove the company’s success. This required helping them recalibrate stock and option grants after a large stock split heading into the expected IPO date.
Our client, an investor-owned healthcare company comprised of four health systems in major metro areas, utilized an historically effective total compensation program for its senior talent that included long-term incentives in the form of stock options.
Working with the senior executive team, we first analyzed the market to ensure a clear understanding of what the market offered different types of executives and why. We combined quantitative information from various labor markets, filtered by the risk-reward profiles for each market, to define potential gaps among our client’s executive packages and those available to similar executives in the market. We then helped craft an employment value proposition and rewards strategy to target specific risk-reward traits in different executive areas that fit the type of talent our client needed and provided an attractive package in the market. A key stone program change was the adoption and integration of a performance based SERP as an offset to delivering capital accumulation strictly through stock options.
The jury is still out in terms of talent acquisition and reward-for-performance because the strategy and program changes are too new. Clearly the company feels it is better positioned to attract the talent it needs and then get what it pays for. The immediate impact felt was one of talent retention and engagement. A number of key team members – those who had helped build the company – were retained and felt the rewards realignment increased their engagement levels and supported an entrepreneurial and committed executive team