Time for Spring Cleaning?

Many of us look around our homes in the warming spring light and think, boy, could this place be in better shape! Maybe it's because the lighting in most offices is far from warm, but the impulse doesn't seem to be as common in Compensation departments.

Thing is, most of us can think of more appealing projects than purposely looking for the messes and (contentedly) cleaning them up. Maybe that's why most of the audits that my clients do are part of a planned compensation program redesign. They have already admitted that there are problems and have decided they have the fortitude to deal with them.

"Yearly audit? But I've got fires to put out! My time is booked out." I can hear you now. Problem is, if there are so many managers and employees that need you urgently -- or programs with ugly loopholes -- it's a safe bet that things aren't really in order. 

After all, part of the "art" of compensation is making our practices systematic and consistent. In addition to the competitiveness of our pay levels, DIY routines should be audited to make sure the wear and tear hasn't caused some holes.

I thought I'd mention a few audit ideas just to get you inspired. I've put some of the traditional ones at the end and begun with a few less common ways to obtain important insights via audits. Be sure to commit to making the needed changes before you get started. Just like housecleaning, you don't want to turn your back on the messes once you find them.

• Create an overall, combined compa-ratio for your jobs and decide if you like what you see.
• Break down your compa-ratio audit by job family and analyze where actual pay is vs. the market rates for the jobs. Are employees really being paid competitively?
• Use compa-ratios to tell you whether there are compression issues in high growth departments and, if so, how big the salary differences are.
• Interview managers who approve overtime to determine if there are consistent practices and understanding of the regulations.
• Audit promotional increases to determine if the decision-making about eligibility and amount has been consistent across the organization.
• Catalogue hybrid jobs -- I bet you don't have all the titles in one place -- and confirm that job assessments and pay determinations have been made following the same guidelines and with equivalent outcomes.
• If you have anniversary date performance appraisals, check out the backlog, contact the managers and eliminate it.
• If you have focal review performance appraisals, sample some departments and evaluate whether the written employee feedback truly differentiates between employees and substantiates their ratings.
• Tell the truth! Are your filing methods up to date and compliant? Are your files?

Of course, there are also FLSA and equitable practice audits. I recommend that you engage legal assistance to get those accomplished.

Want to really air the place out? What about a candid assessment of your strategic efforts? If your pay-for-performance efforts were linked to improved customer satisfaction or profit, for example, did they really have an impact? How can you draw a line of sight between department objectives, employee objectives and company results? What aspects of planning and operations worked and how? How can you build on these successes? Finding this sweet spot would be a valuable investment for your company. Imagine how much useful, field-proven data you could share with your managers to improve business results . . .

Margaret O'Hanlon is founder and Principal of re:Think Consulting. She'll join Ann Bares and Dan Walter of the Compensation Cafe to speak the unspoken -- Everything You Do (in Compensation) Is Communication -- in an upcoming book. Margaret brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, she was a Principal with Towers Watson. Margaret is Deputy Director of the International Association of Business Communicators (IABC) Pacific Plains Region. She earned her M.S. and Ed.S. in Instructional Technology at Indiana University, Bloomington. Creative writing is one of her outside passions, along with Masters Swimming.

Comments

[Jacque Vilet]

Great reminders and audit Margaret!