Innovations in Compensation: Leading-edge Practices & Programs

After an encouraging evening buffet and get together with the members of the various Boards, our Monday was filled with an engaging and productive meeting and a delightful (if a bit cool) dinner together.

Themes of the meeting:

• The Art & Science of Working with Boards and Company Leadership.  Key lessons shared included:
  • Providing the broad-based view of the business and HR to anticipate questions from the CEO, CHRO, etc.
  • Discerning on not always wanting to spend.  Saying “no” helps set the table for “yes” later.
  • Educating through Executive Summaries and 1:1 meetings are key.
    • Make the “big” meeting a non-event through premeeting preparations.
    • Surface dissenters through the pre-read.
  • Facilitating big conversations as opposed to being directly involved in the conversation.
  • Working with the CEO without the CHRO.
    • Provides a sense of how well the CEO handles skip level conversations.
• Implications of Future of Work for TR:
  • Creating Operational Leverage.
    • Need further discussion about how hybrid work impacts EBIDTA.
    • Beyond operational routine, how will AI change business costs?
      • Need more AI use cases for TR, like:
        • Job Pricing
        • Personalized benefits packages
        • OKR drafting & tracking
        • Job matching during acquisitions
  • Pay Transparency’s Unintended Consequence.
    • Most organizations are NOT sharing the full pay range in job postings.
    • Concern was raised about how pay transparency creates INTERNAL discussion about why an EE’s pay is at a certain level. 
    • Emphasizes the need to ensure leaders and HRBPs are prepared to manage these discussions.
    • Median Underpaid Gap slide – NEXT PRACTICE! (MSFT and Vertex use this).
      • Simple view of data story.
• Systems thinking for Incentives, Benefits & Job Architecture.
  • Most organizations are struggling with creating LEADER ACCOUNTABILITY even though they have well defined behaviors.
  • Most leaders lack understanding of equity design.
    • In 2023, Target helped its Executives understand PSUs (Performance Share Units (PSUs).  Dow is focused on this for 2024.
  • Discussed that well-being doesn’t get the money back out.
  • Global architecture is fundamental for enabling:
    • Workforce Planning
    • Pay Transparency
    • Market Based Pay

Resources (available in downloads or links below):

• TR Board benchmarking:
  • TR structure, TR remit, partners and other key organizational details.
• Pay Equity & Pay Transparency – shared by Pete Manias, Microsoft.
• Future of Work – shared by Kevin Martin, i4cp’s Chief Research Officer.
• i4cp Skills Database Guidebook:
  • Delta designed their approach using this as foundation.