I just had a conversation with some of my esteemed Compensation colleagues about Compensation's role in making offers to recruits.  We discussed the challenges with ensuring offers made are competitive and internally equitable.  There are a couple of effective approaches to accomplishing this:

1. Compensation approves all offers: This is probably the most reliable way to ensure appropriateness and equity of pay (and job level), but it can be taxing for the comp staff, especially during times of heavy recruiting.  And it can slow down the process, potentially frustrating the internal client.
2. Recruiting and management (plus HR generalists) together make offers with guidance/direction: This method requires pretty thorough training and coordination between Recruiting and Compensation staff.  It streamlines the process, but the lower level of oversight may result in equity issues or pay misalignment if the recruiter lacks education on making competitive offers or appropriate comparator information (internal and external).  This is where a tool developed by Compensation and used by Recruiting with hiring managers can be very effective.

No issue that involves compliance has a solution without some resource investment, risk and/or pain.  It's important to fully discuss your strategy for ensuring equity and competitiveness of offers with all stakeholders (including leadership) and spell out the risks before determining your approach.

Performance management is a daily exercise

Let's continue our discussion of performance management during the review period.  It's important to know that the most effective way of keeping everyone on track is by communicating and coaching daily, or as often as you can.  Have both formal and informal communications about performance frequently to keep the message fresh and ensure you as a manger know what's going on.  This includes everything from "atta boys/atta girls (or atta ladies, possibly)" when something goes well to more formal, documented conversations when things don't. 

It's best practice to have at least a mid-year formal review with each of your direct reports, and many advocate doing it at least quarterly.  But informal thanks and coaching/feedback should ideally be done on a daily basis if it's practical.  This helps ensure at the end of the year there are no surprises to the employee about their overall performance rating.

Performance Management- starting out the year

As the calendar year starts again, many of us focus our attention on documenting and delivering performance appraisals for the prior year.  This can be a tedious process, especially if documentation of goals as well as the good and the bad for each subordinate didn't occur throughout the year as planned.  But you can improve the process and lower your stress this year by doing a few things now:

·       Prepare yourself for the upcoming performance period (typically a calendar or fiscal year) by clarifying your views on responsibilities, roles, and desired goals to be achieved by each of your direct reports.  If you have job descriptions, review them to make sure they are accurate and have them ready for your discussions with your team members.

·        Have a conversation with each of your direct reports and go over the information above.  Give them written copies of your expectations for the upcoming year.  Go over each goal together and answer any questions that arise.

·       Set up your performance evaluation forms for each employee (fill out name, goals, etc.) so you can document their successes and challenges throughout the year.  It's easier to do this with a form already prepared, and it will save you much time later if you've been diligent about documenting the good and the bad throughout the performance year.

By planning ahead and starting the performance evaluation process early, you will end up with a better result and feel  prepared for coaching conversations throughout the year. 

Is my organization's pay on target?

The Compensation/HR professional may know about specific pay issues (high and low) in his or her organization.  But what does the overall competitive picture look like?   A high level snapshot can be invaluable for planning your spending on pay as well as identifying the need for special supplemental pay programs to remain competitive.  It can also indicate whether your bonus programs deliver a competitive advantage or lag behind industry.

Pay lines are a nice visual for depicting how an organization's pay stacks up against its pay structure (midpoints/market points) and the competitive market.  By using some basic mathematical regression techniques, you can develop a model using benchmark jobs that shows you where your pay is high and low and helps you funnel scare dollars to where they are most needed.  Because regressions require a significant number of data points to yield reliable information, the technique is useful only for groups of 20 or more jobs spread across various pay levels or grades. 

Remember, start with solid pay and market information if you want an answer that's meaningful. 

Happy regressing!