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Why the Need for a Total Remuneration Study?

State of Oklahoma Total Remuneration Study Overview Presentation to OPHRA . Why the Need for a Total Remuneration Study?. While the State has gathered salary data on a regular basis, there has not been a total remuneration study for many years

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Why the Need for a Total Remuneration Study?

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  1. State of OklahomaTotal Remuneration Study OverviewPresentation to OPHRA

  2. Why the Need for a Total Remuneration Study? • While the State has gathered salary data on a regular basis, there has not been a total remuneration study for many years • When discussion occurs concerning the competitiveness of salaries and the need to be more competitive, questions are raised about whether we need to do anything as there is perception that the competitiveness of our benefits may offset salaries. • We don’t know whether that is true or not as we have not studied the competitiveness of benefits and our total compensation • Several years of no funding for salaries, coupled with increased turnover, has caused concerns to Executive and Legislative branch leadership, as well as the Employee Associationregarding compensation. • This has led to an increase in the number of unclassified jobs and also requests for additional funds for various classifications during the budget process. • “Is the squeaky wheel getting the oil”?

  3. How is the Study being Done? Project Planning, management and communication Review and development of the State Compensation Philosophy Definition of the constituency of the market to be surveyed and survey sources to utilize Selection of benchmark positions to be surveyed Definition of components of total remuneration to be surveyed Development of survey instrument and collection of data Analysis of survey data Preparation of presentations to key stakeholders and decision makers Development of a game plan as outcomes of decisions made

  4. What are the Expected Outcomes? A current assessment of the competitiveness of base salary, benefits and total remuneration. “It’s not just about the amount, it’s also about the mix” The basis upon which compensation decisions can be made on an integrated basis between the different components of total remuneration for all State employees, within the context of a statement of compensation philosophy The basis upon which “what if” scenarios can be developed and considered for future compensation decisions and the ability to do compensation planning for multi years Minimization of the “squeaky wheel gets the oil” compensation decisions Through the education of key stakeholders on the process during the course of the study, the increased likelihood of buy-in to and buy-off of the study results

  5. Why is the Development of a Compensation Philosophy Important? • A compensation philosophy statement is intended to provide a foundation for the design and administration of compensation plans in the State of Oklahoma. It defines what you pay for and why. The State of Oklahoma’s compensation philosophy statement should be written in general terms in order to provide a lasting basis for future compensation design and administration. While the compensation plans may vary over time, the overarching philosophy should not vary • The development of a Compensation Philosophy allows for: • Alignment with business and human resources strategy • Definition of: • Plan Design • Basis of Establishing Compensation • Components of Compensation • Market and Level of Competitiveness • Basis of Pay Movement • Statement of Affordability • Statement of Governance and Plan Management Accountability

  6. Topical HR Issues in Other States As recent as July 2013, a survey was conducted of State HR Directors which asked them to identify their Top 3 HR Challenges/Issues/Opportunities. What were identified? • Implementation of the Affordable Care Act • Civil Service/Merit System reform • HR “Consolidation/Reorganization”, HR Service delivery model and HR technology • Understanding Total Remuneration • Retirement and Health Benefits reform • Unfunded liabilities • The need for more effective, modern and quicker recruitment and selection processes • Enhancing the “branding” and image of public service • The importance of understanding workforce demographics and workforce planning • Modernizing the classification and compensation plans • Pay compression • More effective performance management and linking pay to performance

  7. Topical HR Issues in Other States What were identified (cont’d) 13. Urban vs. rural recruitment and retention 14. Hot skill pay, particularly in the energy States 15. Developing HR metrics to demonstrate HR’s value added

  8. Questions? Contact information: Neville Kenning Neville@kenningconsulting.com (714) 242 3812 (work) (714) 812 9983 (cell)

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