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12 Case Studies of Companies that Revised How They Compensate Employees

S HRM has partnered with ChiefExecutive.net to bring you relevant articles on key HR topics and strategies.

Higher compensation is part of the ransom for dealing with the pandemic for most American companies and industries. So salaries, wages, benefits and perks will cost them more—perhaps a lot more—in the year ahead.

The way CEOs and CHROs can make sure the Great Raise works to their companies' advantage is to be proactive, creative and equitable about it. Yet they also must weigh strategically the demands of the moment with their long-term compensation strategy.

"This is a time for real balance when it comes to how you deal with retention and attraction," said Paul Knopp, chair and CEO of KPMG US. "We all have to make sure we meet the market when it comes to base compensation, but the market has changed in a way that you also have to look at those benefits that are most attractive to employees for their careers."

While median full-time earnings of $1,001 per week in the third quarter of 2021 were nearly 9% higher than two years earlier, according to the Labor Department, expectations for 2022 remain frothy given the tight market for talent, the free-agent ethos encouraged by remote work, the geographic reshuffling of workers and decades-high inflation. U.S. wages will increase by 3.9 percent in 2022, according to the Conference Board, the highest rate since 2008.

The compensation surge is occurring at the high end, at a low end that's getting higher and everywhere in between. Goldman Sachs, for example, is offering paid leave for pregnancy loss and expanding the amount of time employees can take for bereavement leave while also boosting its retirement-fund matching contributions for U.S. employees to 6% of total compensation, or 8% for those making $125,000 a year or less.

Meanwhile, at Tyson Foods' chicken-processing plant in New Holland, Pa., the company has started offering a three-day workweek, plus pay for a fourth day that retains employees' status as full-time workers. Just for good measure, Tyson has created a $3,000 sign-on bonus for new hires.

"We're in a bidding war for talent that will go on for a long time," said Alan Beaulieu, president of ITR Economics.

For CEOs and CHROs, several new factors demand their attention along with the overall spike in compensation. They include:

• The end of retention. The "idea of a long-term commitment to one employer has been dead for a while, but it's really dead now," said Dave Roberson, CEO of the RoseRyan financial consulting firm. "You must have a stream of people. Assume you're going to be replacing people. So how do you keep the people you have, if you can, but also bring the next group in?"
• High-balling. A deal to recruit someone may not really be a deal these days. "You've made an offer and you think you've got a hire, and then they're asking for $5,000 or $10,000 more," said David Lewis, CEO of OperationsInc, an HR consulting firm. "Now you have to ask yourself what makes more sense strategically: say no and hold the line and lose the candidate and restart the process, not knowing how that will work out? Blow up your compensation structure? Or as a Band-Aid, give that person a sign-on bonus in hopes that the package will get them in the door?"
• Need for equalization. Recruiting with higher compensation also requires boosting pay and benefits for retention. "You need to be mindful of what you're paying others in the organization and understand the detrimental impact it will have when you bring someone in alongside a tenured employee," Lewis said. "Operate on the idea that everyone's salary is basically posted on the pantry door in your office."
• A focus on mental health. The pandemic, anti-contagion measures and the takeover of remote work has left many Americans isolated, confused, lonely—or at least disjointed. And they expect their employers to help them cope and adjust.

"Mental health is a real thing, regardless of how [a previous generation of leaders] feel and what we did," said Jeffrey Immelt, former CEO of General Electric. "Particularly post-Covid, it's something worth your time to try to understand."

Many Fortune 500 companies already offered mental-health benefits, but by now "mental health is just a place setter: You've got to have it in place to be competitive in the market today, across the board," said Richard Chaifetz, founder and CEO of ComPsych, a large provider of employee-assistance programs. "Companies understand the importance of keeping their people functioning at the highest level."

Codility, for example, has begun supplying all employees with 27 days of paid time off per year plus four mental-health days, which don't have to be approved. "We're offering these days in addition to personal-time-off days to recognize and bring to light the importance of mental health," said Natalia Panowicz, CEO of the platform that evaluates the skills of software engineers, with its U.S. hub in San Francisco.

CHRO360.com asked a dozen CEOs, CHROs and other top executives about their compensation strategies and practices for 2022. Here are some of their ideas:

Let Them Name Their Salary

Chris kovalik, ceo, rushdown revolt, a video-game maker in new york city.

We started as 12 part-timers, mostly people who were giving me their moonlight hours. That's not a lot different from now, except now we have 75 people. The magic of what we do is that we don't recruit anybody. We're just a magnet. We let people come to us.

When it comes to compensation, some say they wanted to volunteer, that they weren't expecting compensation. But we never, ever allow people to volunteer their time for us. So we say our company minimum wage is $15 an hour, and if you insist, we can pay you that per hour.

But generally people come to us with an expectation of compensation because they see that we're making money. When compensation came up, we'd say, "I don't know what your skill set is. I've never hired you before. How much do you think you're worth, and how much do you need?"

If every hour we're compensating them for the amount of money they want and need, if someone is part-time and only giving me 10 hours a week, I'd argue that they're giving me their best 10 hours. Because they're getting paid what they want and doing things that they want to be attached to and be part of.

There's no pattern to the compensation requests. If their number is too low, we'll say, "Are you sure? Are you just giving me a low-ball number I'll say yes to?" If it's high, I don't talk them down, but I ask them to justify it, and if the justification isn't adequate, what I say is, "How long do you think you'll need to prove that justification? Two to three weeks? Then let's pay you two-third to three-quarters of what you asked, and if you prove it, we'll go up to whatever you said."

Tailor Package for Youth Appeal

Ronald hall jr., ceo, bridgewater interiors, an auto-seat maker in detroit.

We enjoyed very low turnover pre-Covid, but during the last two years we have had to replace probably one-third of our workforce at our largest facility, about the same number from termination as voluntary. So we've had to work harder than ever to recruit.

Our most-tenured employees, who are the most highly trained, have had to pick up the slack, working record amounts of overtime and less-predictable production schedules.

In our upcoming negotiations with the United Auto Workers, we're trying to emphasize short-term bonuses rather than wage increases that get baked into our costs. But we have continued health insurance through the pandemic as well as our tuition-reimbursement program, and many employees have thanked me for that.

What I am hearing from new employees is that they're not as interested in benefits but rather in higher cash wages. We've long touted benefits like our generous 401(k) matching and better medical coverage versus our peers, but we're finding that doesn't resonate as readily now as it did a decade ago. So I've asked my team: Should we be looking at some kind of hybrid model of offering higher wages to people who want those and move those dollars from the benefits side to the wages side?

We've also looked at providing childcare in a partnering arrangement where there could be a center developed near our facilities, and we would arrange for some sort of company subsidy or guarantee some level of attendance. The challenge with that is the auto industry runs around the clock, and you'd need a daycare provider who'd be committed to opening around the clock and provide legal, regulated, benchmark-standard levels of care to all those children in the off hours.

Equalize as You Acquire

Diane dooley, chro, world insurance, a business and personal insurer in tinton falls, n.j..

We onboarded about 800 employees in 2021 through acquisitions of small agencies and organic growth, but there had been no compensation modeling. Now we're building out our compensation philosophy with commission plans, incentives and bonuses, centralizing components and ensuring we have the right framework.

When we do an acquisition, we might retain their compensation model for a year or two years then slowly migrate, but make sure employees aren't taking a cut in pay. We are also capitalizing commissions into base compensation—identifying what commissions would have been and what they will be, and recognizing roles that are moving away from a commission base.

Some agencies we acquire are smaller and may be below-market for total compensation. Now we're addressing those concerns. They need to be more front and center. We must do everything to retain our employee population. If they're woefully underpaid, or not at market, we risk losing people, and we don't want to do that.

Educating the owners of some of the agencies [we acquire] is a piece of this. As we partner with them, we are evaluating them and asking, "Did you give people an increase this year?" We're not telling them what to do but providing guidance about what to do.

We're also modifying and increasing our benefits, such as giving employees pet insurance. And making counteroffers is a critical piece today, usually for high-end employees. They work better than they used to because not a lot of people really want to make a move in this environment.

Innovate for the New World

Jason medley, chief people officer, codility, a provider of skill-evaluation software in london.

We really have to step back and be innovative and force ourselves to change. The companies that are going to win are going to be more progressive early and not fighting what's happening.

One thing we've done is change our outdated compensation models that give higher pay to employees living in tech hubs like San Francisco and New York and lower compensation for areas inside the coasts. Now, we've created a United States-wide salary band, so no matter where you live, the compensation is based on the role, not the location. You can go live and work wherever you want to.

We decided to approach compensation through a very human lens. People have seasonality in life, and maybe they are caregivers at different moments and want to live in different places. We want to be as flexible as possible, and this country band gives us that flexibility.

We are starting to see the same thing in Europe, where we have our headquarters in London and offices in Berlin and Warsaw, and employees all over, especially in Poland. People are wanting to live in the countryside of Spain but demanding a London salary. So we are transitioning to one European Union band and saying, "Here is your rate—live where you want to."

We are also seeing that with global warming, it's harder to get work done for people on the west coast of the U.S. and in Europe, because they didn't build homes with air conditioning. If you're sitting in a house at 90 degrees with no air conditioning, there's no way your performance is the same as someone with AC. Supplementing air conditioning isn't something we thought about before, but now we're very much having to look at those things.

Stay Ahead of Expectations

Traci tapani, ceo, wyoming machine, a sheet-metal fabricator in stacy, minn..

Our wages have gone up by about 20% for the typical worker. When I found people I could hire, I knew they were being brought in at an hourly rate that was too high for what I was paying my incumbent workers.

My strategy has been to be proactive about that and not wait for [existing] employees to say something about it or give them a reason to look for another job. We're proactively making wage adjustments to make sure our incumbent workers are in line.

Employees will leave for more money, so they're very appreciative of it. But in my shop, I also know that people like working here, and I know they don't want to leave. I don't want to give them a reason. If they can get an increase in pay that's substantial, I know that I can cut them off at the pass. Retaining my workforce is my No. 1 strategy. They're already here, and I'm going to do everything I can to keep them.

For that reason, we've also been more generous as time has gone on with paid time off, offering it sooner than we once would have, especially for new workers. We recognize that it's healthy for people to be away from work and also, in the pandemic, people need to be away from work. Knowing they have some paid time off makes it easier for them.

Leverage Benefits for DE&I

Mark newman, ceo, chemours, a chemical manufacturer in wilmington, del..

In general our company hasn't seen the Great Resignation. And in fact, we continue to believe our focus on being a great place to work is serving us well, along with appropriate benchmarking on compensation issues.

Chemours  is  a great place to work. We survey our employees every year, to improve our working environment from a compensation and benefits perspective. Also, from the [diversity, equity and inclusion] perspective, we're trying to make sure we tap into the full breadth of talent in our industry.

That means, for instance, we are helping people more with college loans. We are offering same-sex [marriage] benefits. We are providing more family leave for people who have kids. There is clearly an aspect of our benefits package that is evolving to be consistent with our strategy of making Chemours a great place to work.

Overall, we view compensation as something where we want to be either in the median or upper quartile. It's something we're very focused on from both a wage as well as benefit level. From Covid, there's been no fundamental change as it relates to us wanting to be in the median to top quartile.

We've had to make some local adjustments where the labor market is more super-charged. For example, we see a lot of that in the Gulf Coast region, especially with oil prices coming back, and petrochemicals and refining. But it's very much a regional factor. So if industries are moving to a certain region, like the South, you have to make sure you stay current with local benchmarks.

Offer Skin in the Game

Cesar herrera, ceo, yuvo health, a healthcare administrator in new york city.

We're a year-old company that provides tech-enabled administrative solutions for community health centers across the U.S. that are specifically focused on providing primary-care services for low-income individuals. We have a team of about 10 people right now, and we have a number of open roles and positions where we're likely going to be tripling the size of our team in 2022.

Google can compensate well above the market rate. We don't have that since we're an early-stage organization. What we do have as levers aren't up-front financial compensation but equity, support in your role and a relatively flat organization where you can have significant autonomy.

A lot of individuals are going to be driven by the mission; that's the case with the entire founding team. We've made sacrifices to create this organization. So you can come in at a meaningful position with a lot of decision-making.

But one of the biggest carrots we can give is, if you accept the lower pay and the risk that comes with an early-stage organization, you can have meaningful equity in the company. We have an options pool which is not to exceed 10% ownership of the organization, and as we grow and scale, we increase that options pool. For senior-level leaders, we do expect to be able to distribute up to 10% of the company to them.

Pay Extra for Continuity

Corey stowell, vice president of human resources, webasto americas, a maker of automotive sunroofs in auburn hills, mich..

We had to recruit for several hundred new openings at a brand-new facility right at the beginning of the pandemic. So we instituted an attendance bonus. For those who worked all their hours in a week, we paid an additional $3 an hour. We really had to keep it short-term, so we paid it weekly. If you wanted to pay it every month, you couldn't do it, because people needed that instant gratification.

Otherwise they could get it on unemployment. With our pay rate, they could earn more to stay at home and collect unemployment, a significant amount more than they could earn than working for us. So we also had to increase our wages, and we increased them by more than 20% in some classifications [in the summer of 2020].

We've filled all of our positions, but it's still a challenging market. We've had to increase all our wages, with the lowest for a position being $17 an hour, on up to $30 an hour.

We also have offered stay bonuses of $500 a month for three consecutive months, up to $1,500. And for hourly employees we've instituted a different attendance policy, where they can earn two hours of paid personal time for so many hours that they work consecutively with no attendance issues.

The key is the schedule—we can prepare and get someone to cover. That's easier to do than just managing whoever's going to come in today. In this environment, that really has changed with our workforce, and it's tough to rely on our current workforce.

Give Them the Keys

Elliott rodgers, chief people officer, project44, a freight-tracking software provider in chicago.

We have equipped and subsidized a van that we call Romeo, which employees can use to combine work with personal uses like family road trips. We cover the cost of the rental. It's a luxury van that comes equipped with a bed, a toilet and shower, Wi-Fi, device charging and a desktop workspace. And it's pet friendly.

We started it as a pilot project and reservations were full within 10 minutes of when we posted it internally. Then we extended it into 2022. By the end of 2021, more than 20 unique team members completed or nearly completed reservations. They've ventured out to places spanning Mount Rushmore and the Badlands; Rocky Mountain National Park; Salem, Mass.; and Pennsylvania. A pretty broad number of places.

It's something we're really proud of. It allows our team members the opportunity to work in a lot of different places while still being connected to us. And they've appreciated the opportunities to stay connected, but also be connected in other ways with nature and other places in the world. They can maintain their perspective while also continuing to contribute to their role in a productive way.

When you place a team member at the center of what they'd want in an experience like that, the value of it answers itself. It creates a comfort level where it provides the necessities for you to be able to continue to work, and you can work from anywhere. It's the best of both worlds. It's one thing to find that on your own but another to have that accessible to you via work, but done in a way that caters to you.

Help Them Come, Go—and Stay

Aamir paul, country president - u.s., schneider electric, a maker of electrical distribution and control products in andover, mass..

With our knowledge workforce, it's been about intentional flexibility. So, for instance, we launched a "returnship" program for women who'd left the workforce but might want to come back even at reduced hours. That means 20, 30, up to 40 hours a week, and we're finding some incredibly talented people who haven't been in the workforce.

This program is available to men as well. If there's a field engineer who's been in the electrical industry for 35 years and he's now retiring, but he's five years from getting his medical benefits, we say: Don't retire. Go on the program. Work 20 hours a week. Work from home. We'll reduce your pay proportionally, but we will couple you with three university hires, and they will call you on Microsoft Teams and show you what's happening on the job site, and you're going to walk them through it. Work just three days a week. We'll cover your benefits.

We've also expanded the parental leave policy, which already was one of the best in the industrial sector. And we created a way for people to buy more time off without having to leave their positions. They apply for more unpaid time off and we allow them to retain their position and seniority and allow them to work through whatever life event it is.

We landed on six weeks for the maximum. In the most intense industries—such as a fighter pilot or a surgeon—they've found that six weeks of being out of the rotation allows them to re-set. So that's what we did. Before, the limit was two weeks.

Give Sway to Local Management

Tom salmon, ceo, berry global, a maker of plastic packaging in evansville, ind..

We've got to be competitive in all the geographies we serve. We have 295 sites around the world and manage our employees in those sites geographically. Every geography will be a different labor environment. There are different criteria that employees are looking for. It's not just about wages but taking everything into consideration.

We let local management handle things with their insight about wages and competition. They're hearing directly from employees about what they like and don't like, what they want more of and less of. It's a site-by-site discussion.

For example, at some sites, it may be important for employees to be able to access the internet at lunch; at other sites, they may not value that as much. Some want a more advanced locker facility, with different shower facilities. That includes the southwestern United States, where the temperatures are warmer; but in New England, some might not want that.

In any event, if you treat these things locally, you're going to be able to affect that local population and address the need of that geography. If you blanket something across our entire plant population, you may provide something that's not desired or needed.

We depend on our local management to respond to the different demands in terms of compensation and benefits at their sites. The better the front-line leadership is, and the more satisfied their team is, the higher our retention rate and productivity and safety performance. So these leaders participate in profit-sharing plans for those respective sites, because they have a great influence on the success of a given facility.

Focus Benefits on Flexibility

Paul knopp, chair and ceo, kpmg us, a financial consulting firm in new york.

We announced a new package of enhancements to our benefits and compensation, tied to mental, physical, social and financial well-being. These increases are the biggest in the history of the company. You have to make sure your base compensation meets the market, but you also must have attractive benefits.

For example, we cut healthcare premiums by 10% for 2022 with no change in benefit levels, and we introduced healthcare advocacy services. We are replacing our current 401(k) match and pension programs with a single, automatic company-funded contribution within the plan that's equal to 6% to 8% of eligible pay.

As part of this, we're focusing on the crucial element of ensuring that employees know you're watching out for them. They also are looking for flexibility—you don't want to under-index on how important that is. So we also are providing up to three weeks additional caregiver leave, separate and apart from PTO. And all parents will receive 12 weeks of paid parental leave, in addition to disability leave for employees who give birth, allowing some up to 22 weeks of paid leave. We also have expanded our holiday calendar to now include Juneteenth.

Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.

This article is adapted from www.ChiefExecutive.net with permission from Chief Executive. C 2022. All rights reserved.

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Understanding Compensation Analysis: A Detailed Case Study

• July 12, 2024

Why Compensation Analysis Matters

A compensation analysis case study is essential for any organization aiming to attract and retain top-rated talent while ensuring fair and equitable pay.

Quick Summary : – Understand the organization’s pay structure. – Compare salaries and benefits to industry standards. – Identify discrepancies and implement fair compensation practices. – Use dynamic data to adapt to changing work environments.

Conducting a compensation analysis helps employers compare their compensation data and practices both internally and externally. It ensures that employees are rewarded justly for their work, reflecting fairness and competitiveness across different regions and levels. This process is vital, as labor costs can constitute up to 70% of a business’s expenses.

For instance, companies like Slack had to adapt their salary structures when their employees relocated due to the COVID-19 pandemic. This dynamic shift underlines the constant evolution in compensation strategies.

I’m Chris Lyle, co-founder of CompFox and an expert in compensation analysis case study . With experience in legal research and compensation structuring, I’ve seen how critical thorough compensation analysis is for maintaining a competitive edge and ensuring fair employee treatment.

This guide will walk you through the essentials of compensation analysis, providing practical steps and real-world examples to help you tailor strategies to your organization’s unique needs.

What is Compensation Analysis?

Compensation analysis uses internal and external data to determine if employees are fairly rewarded for their work. This process ensures that salaries and benefits are both competitive and equitable.

Key Concepts in Compensation Analysis

External Competiveness : This involves comparing your organization’s compensation data with that of other companies to ensure competitiveness.

Internal Equity : Ensures that employees are compensated fairly within the organization for their level and type of work. This helps prevent pay disparities among employees doing similar jobs.

Region : Compensation data is compared for similar roles within a particular geographic area. For example, salaries in New York may differ significantly from those in a smaller city due to cost-of-living differences.

Level : Compares employees’ levels and the compensation associated with those levels within the organization.

Beyond Salary: Total Compensation

While salary is crucial, it’s only part of the equation. Total compensation includes:

• Medical care
• Car allowances
• Share schemes
• Housing allowances

The Dynamic Nature of Compensation

Compensation is not static; it evolves with internal and external factors. For example, changes in work environments may necessitate revisions to salary bands.

Real-World Example: Performance-Based Structures

Some companies tie rewards directly to individual and collective achievements. This data-driven approach helps eliminate bias, ensuring fair distribution of rewards based on measurable contributions. It also emphasizes career growth, providing opportunities for advancement based on performance.

Benefits of Compensation Analysis

Conducting a compensation analysis offers several benefits:

• Attracting and retaining top talent : Ensures your compensation packages are competitive.
• Fair workplace practices : Promotes equity and fairness within the organization.
• Employee engagement : Fair compensation contributes to higher employee satisfaction and engagement.

Benefits of Conducting a Compensation Analysis

Salary benchmarking.

Salary benchmarking provides an impartial view of competitive salaries in the market. This helps organizations determine if they should pay an employee above the average salary.

Evaluating pay equity ensures that employees doing the same level of work are compensated fairly. Conducting a comprehensive compensation analysis can help correct historic pay gaps.

Transparent Decisions

Transparent compensation decisions foster trust within the organization. When salaries are based on accurate and impartial data, employees feel more confident in the fairness of their compensation.

Dynamic Compensation

Compensation analysis is dynamic , allowing projections based on future needs. This enables organizations to adapt their compensation strategies over time.

Identifying Opportunities

Identifying opportunities through compensation analysis helps improve compensation strategies. For instance, innovative work arrangements can help retain full-time workers.

Steps to Conduct a Successful Compensation Analysis

Step 1: define the purpose.

Before diving into the data, it’s crucial to define the purpose of your compensation analysis. This involves aligning your compensation strategy with your organizational goals.

Step 2: Job Evaluation

The next step is to conduct a job evaluation . This involves gathering up-to-date job descriptions for every role in your organization.

Step 3: Market Survey

To ensure external competitiveness , conduct a market survey to gather salary benchmarks.

Step 4: Gather Internal Data

Collect comprehensive internal data on employee compensation.

Step 5: Data Analysis and Drawing Conclusions

Analyze the collected data by calculating comparative ratios and conducting a pay equity analysis .

Step 6: Address Challenges

Identify and address any challenges, such as underpaid or overpaid employees .

Step 7: Communicate Results

Develop a clear communication strategy to share the results with stakeholders.

Step 8: Train Managers

Finally, train managers on how to discuss compensation with their teams.

Compensation Analysis Case Study: Elevate Results Consulting

Elevate Results Consulting recently completed a compensation analysis case study for a client facing significant challenges in their employee compensation strategy. This section will cover the client’s needs, the strategic approach taken, data collection, alignment, client collaboration, execution strategies, CEO-employee discussions, results, and lessons learned.

Client Needs

The client sought a more strategic and market-aligned compensation strategy. They faced issues with employee departures and attracting key talent. Their main concern was the effectiveness of their current compensation design and how it could be improved.

Strategic Approach

Elevate Results Consulting began by thoroughly reviewing the client’s objectives, expectations, limitations, resources, and potential obstacles. The approach was divided into several key steps:

Understanding Current Compensation and Organizational Structure : A comprehensive analysis of the client’s existing compensation structure was conducted. This included examining the organizational hierarchy and understanding reporting relationships to assess their impact on compensation levels.

Data Collection and Job Descriptions : Detailed compensation data, including salaries, bonuses, and commissions, were gathered. Job descriptions for various positions within the organization were also reviewed.

Alignment and Comparison : Job descriptions were aligned with accurate roles based on job duties, levels, and industry standards. Multiple options were provided to the client to find averages and compare these with their existing compensation structure.

Client Collaboration and Reporting : Collaborative discussions were held with the client, presenting a detailed report on the compiled compensation data. Insights on the origin of the data, methodology used, and rationale behind the numbers were shared.

Execution Strategies

Execution strategies were developed based on the data provided. Recommendations included:

• Increasing employee compensation where necessary.
• Addressing scenarios where overpayment might be occurring.
• Exploring variable compensation structures and relevant data points for decision-making.

CEO-Employee Discussions

Elevate Results Consulting worked closely with the CEO, who faced persistent employee requests for raises. A strategic approach was recommended, involving board approval for decisions related to employees reporting directly to the CEO. This created the perception that the CEO required board approval, providing the necessary time and space for thoughtful decision-making.

Results and Lessons Learned

The compensation analysis case study yielded valuable insights and actionable recommendations. The implementation of data-driven changes and strategic approaches resulted in improved compensation structures. Key lessons learned included the importance of effective communication and creating space for thoughtful decision-making.

By following this comprehensive approach, Elevate Results Consulting helped their client achieve a more strategic and market-aligned compensation strategy, addressing their challenges and setting the stage for future success.

Compensation Analysis Case Study: RKL’s Approach

When a Central Pennsylvania-based rehabilitation and skilled nursing facility faced recruiting and retention challenges, they turned to RKL’s Human Capital Management team for a compensation analysis . The goal was to compare their wages with market rates and adjust their compensation structure to attract and retain talent effectively.

Market Compensation Analysis

RKL’s first step was a thorough market compensation analysis . This involved:

• Reviewing job descriptions to ensure they accurately reflected the roles and responsibilities.
• Interviewing key leadership to understand the facility’s pay philosophy.
• Evaluating compensation-related policies and documents to get a clear picture of the current pay structure.

Using comparable market data, RKL developed salary percentiles for each of the facility’s 48 positions. This provided a clear benchmark for how their current pay ranges stacked up against the market.

Compensation Structure Evaluation

With the salary percentiles in hand, the next phase was the compensation structure evaluation . RKL proposed new groupings for wages and created new pay ranges for each group. This phase included:

• Developing a new compensation structure that aligned with market rates.
• Providing recommendations on how to roll out the compensation adjustments to employees.
• Guiding future compensation decisions and integrating new positions into the structure.

The facility’s existing compensation structure was fragmented and not aligned with the market, which was a significant obstacle to their recruiting efforts. RKL’s new structure brought rates up to market level and provided flexibility for future adjustments. This evidence-based model allowed leaders to make fair, justified, and quantifiable hiring and compensation decisions.

Long-Term Success

To ensure long-term success, RKL continues to work with the facility to integrate relative market positioning into performance evaluations. This enhances the efficiency and transparency of the process. Facility leadership reports increased hiring confidence and improved employee sentiment, knowing that wages are now supported by market data .

This compensation analysis case study demonstrates how a well-structured approach to compensation analysis can lead to significant improvements in recruiting and retention efforts, ultimately supporting long-term growth goals.

Frequently Asked Questions about Compensation Analysis

How do you write a compensation analysis.

Writing a compensation analysis involves several key steps:

Purpose : Start by defining why you are conducting the analysis. Are you looking to address pay equity, benchmark salaries, or adjust your compensation strategy to meet future needs?

Job Evaluation : Gather detailed job descriptions, including roles, responsibilities, and required qualifications. This helps in comparing similar roles across the industry.

Market Survey : Conduct a market survey to gather external salary benchmarks. This involves comparing your compensation data with industry standards to ensure competitiveness.

Internal Data : Collect internal compensation data. This includes current salaries, bonuses, commissions, and other forms of remuneration. Make sure the data is accurate and up-to-date.

Data Analysis : Analyze the collected data to identify gaps and inconsistencies. Use comparative ratios and pay equity analysis to draw meaningful conclusions.

What is included in a compensation study?

A comprehensive compensation study includes:

• Pay Practices : Review of the company’s existing pay practices and policies.
• Salaries : Detailed information on current employee salaries.
• Market Value : Data on the market value of various roles within the industry.
• Salary Ranges : Establishing salary ranges for different positions based on market data.
• Internal Pay Parity : Analyzing internal pay equity to ensure fair compensation across similar roles.

How long should a compensation study take?

The timeline for a compensation study can vary based on the size of the organization and the complexity of the roles. Here are the general steps and their estimated durations:

• Position Description : 1-2 weeks to gather and update job descriptions.
• Data Collection : 4-6 weeks to collect internal and external data.
• Analysis : 2-4 weeks to analyze the data and draw conclusions.
• Review Steps : 1-2 weeks to review findings with key stakeholders and make necessary adjustments.

In total, a thorough compensation study can take anywhere from 8 to 14 weeks.

By following these steps, organizations can ensure that their compensation strategies are competitive, fair, and aligned with their goals.

Compensation analysis is a critical component in ensuring fair and equitable pay within an organization. By examining both internal and external data, businesses can make informed decisions about salaries and benefits, leading to higher employee satisfaction and retention.

CompFox offers AI-powered tools that streamline the compensation analysis process. These tools provide precise and efficient legal research capabilities, saving time and reducing stress. By leveraging advanced algorithms, CompFox helps organizations stay competitive and compliant with legal standards.

The importance of compensation analysis cannot be overstated. It helps organizations:

• Attract and retain top talent by offering competitive salaries.
• Ensure pay equity by identifying and addressing disparities.
• Make data-driven decisions that align with organizational goals.

Incorporating AI-powered tools like those from CompFox into your compensation analysis strategy can enhance accuracy and efficiency. This not only benefits the HR team but also fosters a culture of fairness and transparency within the organization.

For more information on how CompFox can assist with your compensation analysis needs, visit our AI Legal Assistant service page .

By embracing these tools and practices, organizations can create a supportive and equitable workplace, driving long-term success and employee satisfaction.

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Case Study: Strategic Workforce Planning for Rail Infrastructure Managers

Analytics in HR

MARCH 30, 2020

In this case study , strategic workforce planning is applied to solve this national problem, impacting millions of commuters. Some factors that make up the productive hours like compensation for nightly shifts, retirement age and shorter workweeks for aging employees are regular subject of collective labor agreement negotiations.

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For this article, I have collected 15 of the best HR analytics case studies I’ve come across in the past two years. Each of these case studies are connected with a concrete business impact. For each case study , I will refer to their original publication. 15 HR Analytics Case Studies .

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Cafe Classic: Rethinking Compensation Training

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Finding the Perfect Fit: A Step-by-Step Guide to Hiring Exceptional Property Managers

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Compensation . We have some great case studies (and will be sharing a couple more during WorkHuman) that demonstrate some impressive results and it’s that kind of data that will ultimately get your investment approved. Just like you have a compensation strategy, you should have a recognition one too. Last question.

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Similarly, case study competitions are smart places to find business strategists. it's the total compensation package that will bring them on board. By thinking about " compensation " beyond salary, you can find creative ways to engage younger employees. This is where you need to get creative.

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A global investment bank was managing their compensation in a home-grown spreadsheet-based system. Their sophisticated compensation program needed to stay in-tact while including top-down budgets, pools with varying restrictions, and flexible controls so managers could control the process and manage exceptions. Challenge. Download PDF.

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Retail Bank Case Study

MARCH 19, 2021

Leaving password-protected spreadsheets behind, (secure role view/access) shielding information from managers based on only their groups, improving data integrity, and saving time and money managing compensation processes, and freeing staff up to work on more strategic initiatives. Download PDF.

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JANUARY 17, 2023

One of the key ways to retain employees is through effective compensation and benefits packages. . The purpose of this article is to explore the role of compensation and benefits in employee retention, highlighting the importance of these factors and providing best practices for designing and implementing effective packages.

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Compensation Analysis with Case Studies

Compensation analysis is an essential tool that businesses use to ensure that they are offering competitive pay to their employees. It involves the examination of the different types of compensation, the factors that affect compensation decisions, and the steps involved in conducting a compensation analysis. This article will provide a comprehensive overview of compensation analysis, including its types, factors that affect it, how it’s conducted, common tools used, and the challenges businesses face.

Here's What You'll Learn

Compensation analysis is critical for businesses to attract and retain top talent. It helps organizations stay competitive and ensure that their pay decisions align with industry standards. A compensation analysis involves a comprehensive review of the various types of compensation offered to employees, including base pay, bonuses, and benefits, among others. By examining these factors, businesses can determine how to allocate their resources effectively to ensure they have a fair and competitive compensation structure.

Types of Compensation

Compensation comes in many forms, including base pay, bonuses, stock options, and benefits, among others. Each type of compensation can affect an employee’s overall compensation package differently. For instance, base pay is the fixed salary that an employee receives for their job, while bonuses are performance-based payments that incentivize employees to exceed expectations. Benefits, on the other hand, are non-cash compensation items such as health insurance , paid time off, and retirement plans that offer significant value to employees. By understanding the different types of compensation and how they affect an employee’s total compensation package, businesses can make informed decisions about their pay structure.

Factors Affecting Compensation

Many factors affect compensation, including an employee’s experience, education, industry, location, and job responsibilities . Experience and education are two critical factors that influence compensation decisions. Employees with more experience or education in a particular field tend to receive higher salaries than their less-experienced counterparts. Industry and location also play a significant role in determining pay, with certain industries and locations offering higher salaries than others. Job responsibilities, such as managerial or executive positions, also tend to come with higher salaries due to the increased level of responsibility.

Conducting a Compensation Analysis

Conducting a compensation analysis involves several steps, including data gathering, job matching, and data analysis. Data gathering involves collecting information on the different types of compensation offered by the organization and comparing them with industry standards. Job matching involves matching job descriptions and titles with similar positions in the market to ensure that pay is comparable. Data analysis involves examining the collected data to identify pay discrepancies and determining how to address them.

Common Compensation Analysis Tools

Several tools are available to businesses to conduct a compensation analysis, including salary surveys, compensation software, and compensation consultants. Salary surveys provide benchmarking data that compares compensation practices across different industries, while compensation software automates data gathering and analysis. Compensation consultants provide expert guidance on compensation practices and can help organizations develop a competitive compensation structure.

Challenges in Compensation Analysis

Conducting a compensation analysis can be challenging for businesses due to several factors, including data privacy concerns and legal compliance issues. Data privacy concerns arise due to the collection of sensitive employee information, and organizations must ensure that they comply with data protection regulations. Legal compliance issues also arise when determining pay equity to avoid discrimination based on gender, race, or age.

Case Study 1: Buffer

Buffer, a social media management tool, is known for their transparent approach to business, including their salary formula. Buffer’s compensation analysis takes into account factors such as job function, location, experience, and tenure to determine the salary for each employee.

In 2019, Buffer conducted a company-wide compensation analysis to ensure they were paying their employees fairly and competitively. Through this analysis, they found that they needed to adjust the salaries of some employees to align with market rates. For example, they discovered that they were paying their customer advocates below market rates and increased their salaries accordingly.

Buffer was able to ensure they were paying their employees fairly and competitively, which helps with employee retention and satisfaction.

Whole Foods Market

Whole Foods Market, a grocery store chain, uses a unique compensation strategy that includes profit sharing for its team members. They conduct regular compensation analysis to ensure their team members are paid competitively and fairly.

In 2017, Whole Foods conducted a compensation analysis. It found that they needed to increase the wages of some team members to keep up with market rates. They also adjusted their profit-sharing program to better align with the needs of their employees.

By regularly conducting compensation analysis, Whole Foods is able to ensure they are paying their team members competitively and fairly. This helps to ensure employee satisfaction and retention.

In conclusion, compensation analysis is critical for businesses to attract and retain top talent. Businesses can use this information to develop a competitive pay structure that aligns with industry standards. Additionally, addressing data privacy concerns and legal compliance issues can help businesses develop a fair and equitable compensation structure.

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Leadership Lessons from the Walmart Workers’ Compensation Case: A Call for Integrity and Empathy 

09 Dec, 2024 Claire Muselman

jury verdicts

The recent California jury verdict ordering Walmart to pay nearly $35 million to a former truck driver, Jesus "Jesse" Fonseca, is a powerful case study for leadership lessons. This decision raises questions about workplace culture, the treatment of injured workers, and the consequences of leadership failures. It allows introspection in the workers' compensation and corporate leadership arenas. For those of us dedicated to improving outcomes in workers' compensation, this case serves as a critical reminder of the importance of leadership principles like empathy, transparency, accountability, and respect. As a result, multiple leadership lessons emerge for employers, claims administrators, and organizations to gain actionable insights to apply to workers' compensation from this example.  

1. Integrity Is Non-Negotiable  

At the core of Walmart's legal challenge was a question of integrity: falsely accusing an employee of fraud. This accusation undermines trust and sets a dangerous precedent for treating injured workers. Leadership grounded in integrity ensures decisions are made ethically and transparently. Organizations must carefully and honestly evaluate claims and concerns, avoiding any actions perceived as deceptive or self-serving. Withes risks losing credit without integrity and can maintain its workforce and the broader community. 

Leadership Lens:  

• Due Diligence: When investigating claims, leaders must ensure that the process is impartial, thorough, and fair. A lack of rigorous investigation can lead to errors that tarnish reputations and harm employees unjustly. Leadership teams must prioritize integrity by setting high standards for reviewing and resolving claims. 
• Empower Your Team: Create a culture where managers and HR professionals feel confident to voice concerns about potential ethical breaches without fear of retaliation. Encourage open dialogue and collaboration to address moral concerns promptly and effectively. Empowering teams to prioritize integrity fosters a workplace where trust and accountability thrive. 
• Lead by Example: Leadership teams should exemplify integrity in all decisions, demonstrating that ethical behavior is prioritized over short-term financial gains. When employees see leaders making honest and fair decisions, it builds a culture of trust and consistency. Even during challenging times, acting with integrity strengthens the organization's long-term resilience. 

2. The Crucial Role of Empathy In Leadership  

Fonseca's experience highlights the critical need for empathy in managing workplace injuries. Injured workers often face physical pain, emotional distress, and financial uncertainty. Viewing injured employees as individuals, not liabilities, helps foster a compassionate and supportive work environment. When leaders show empathy, they build trust and create a space where employees feel understood and valued. This psychological safety, in turn, positively impacts recovery outcomes and workplace morale. 

• Compassion in Action: Leaders must ask themselves, "What would I want if I were in this situation?" Asking this question helps leaders move beyond procedural thinking to a more empathetic approach. Leaders can create meaningful connections with injured employees by addressing the human side of the workers' compensation process. 
• Accommodations with Dignity: Respecting an employee's medical restrictions and collaborating on reasonable accommodations demonstrates an organization's commitment to employee well-being. Thoughtful accommodations can include flexible schedules, modified duties, or other support tailored to the employee's situation. Leaders prioritizing accommodations foster a sense of inclusion and care in the workplace. 
• Active Listening: Engaging with injured employees to understand their needs builds trust and ensures decisions are made in their best interest. Leaders should create opportunities for employees to share their concerns openly without fear of judgment or dismissal. Listening actively allows leaders to address challenges in a way that reinforces the employee's sense of value. 

3. The Vital Role of Transparent Communication  

Miscommunication and ambiguity can create significant challenges in workers' compensation cases. In Fonseca's case, differing interpretations of his driving restrictions contributed to the conflict. Clear, transparent communication between employers and injured employees is critical for setting expectations and reducing misunderstandings. Providing clear policies and open lines of communication ensures injured employees know what to expect. This clarity builds trust and helps prevent disputes from escalating unnecessarily. 

• Clarity Is Key: Employers must communicate policies, restrictions, and expectations to injured workers. Clarity prevents confusion and ensures employees feel informed about their rights and responsibilities. When communication is consistent and clear, it builds confidence in the organization’s commitment to fairness. 
• Training for Empathy:  Train managers and supervisors to engage in transparent, empathetic conversations with employees, particularly during challenging situations like workplace injuries. Empathy-driven communication creates a supportive environment that reduces anxiety and fosters understanding. Training programs should emphasize the importance of balancing transparency with compassion to ensure messages are received positively. 
• Consistency in Messaging: Ensure alignment between HR, leadership, and claims teams so that employees receive uniform and accurate information. Inconsistent messaging can lead to trust and clarity, strengthening employee confidence in the organization. By maintaining consistent communication, leaders reinforce their commitment to integrity and care. 

4. Accountability Builds Trust  

Accountability ensures that decisions and actions align with organizational values and legal requirements. Leaders must be prepared to own their mistakes and rectify situations that harm employees. In Walmart's case, the lack of accountability contributed to the perception of systemic issues within their workers' compensation approach. Leaders who take responsibility for their actions reinforce trust and confidence in their organization. Accountability is a key driver of long-term success and employee loyalty. 

• Accountability Structures:  Develop clear accountability measures to ensure compliance with state and federal regulations, particularly in workers’ compensation cases. Accountability structures should include routine audits and evaluations to identify gaps and ensure ethical practices. Having clear guidelines helps prevent missteps and creates a more transparent process. 
• Own Mistakes: When mistakes are made, acknowledge them promptly and work to address the harm. Honest apology and corrective action show employees that leadership prioritizes doing what is right. Demonstrating accountability strengthens trust and reinforces the organization's values. 
• Empower Employees: Encourage injured employees to speak up if they feel unsupported or misunderstood. Provide transparent reporting channels for concerns and commit to resolving issues fairly and transparently. Empowering employees to share their feedback fosters a culture of mutual respect and accountability. 

5. Culture Starts at the Top  

Workplace culture reflects leadership priorities and actions. When leaders prioritize cost-cutting over employee well-being, they create a toxic environment that undermines trust. Walmart's alleged behavior points to systemic issues that start at the top. Leadership must set the tone for how injured workers are treated, ensuring a culture of fairness and respect. A positive culture fosters loyalty, engagement, and long-term success for employees and the organization. 

• Values-Driven Culture: Establish and promote organizational values emphasizing employee well-being, integrity, and respect. Leaders should integrate these values into daily operations to ensure they are more than just words on a page. By living out these values, leadership creates a culture where employees feel genuinely valued. 
• Leadership Accountability:  Hold leadership teams accountable for creating and maintaining a positive, supportive culture. Regularly assess how leadership decisions impact employees and take corrective action where necessary. Accountability at the top reinforces the importance of ethical leadership at every level of the organization. 
• Cultural Awareness:  Regularly assess employee sentiment through surveys and feedback to ensure the workplace culture is inclusive, supportive, and ethical. Understanding employee perceptions allows leaders to identify areas for improvement and implement meaningful change. Leaders who prioritize cultural awareness foster an environment where employees thrive. 

The Walmart case offers a sobering reminder of the consequences of leadership failures. We can reshape how injured workers are treated—not as liabilities but as valued members of the workforce who deserve respect, empathy, and care. The question is not whether we can lead this change but whether we are willing to do so. 

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About The Author

Meet Dr. Claire C. Muselman, the Chief Operating Officer at WorkersCompensation.com, where she blends her vast academic insight and professional innovation with a uniquely positive energy. As the President of DCM, Dr. Muselman is renowned for her dynamic approach that reshapes and energizes the workers' compensation industry. Dr. Muselman's academic credentials are as remarkable as her professional achievements. Holding a Doctor of Education in Organizational Leadership from Grand Canyon University, she specializes in employee engagement, human behavior, and the science of leadership. Her diverse background in educational leadership, public policy, political science, and dance epitomizes a multifaceted approach to leadership and learning. At Drake University, Dr. Muselman excels as an Assistant Professor of Practice and Co-Director of the Master of Science in Leadership Program. Her passion for teaching and commitment to innovative pedagogy demonstrate her dedication to cultivating future leaders in management, leadership, and business strategy. In the industry, Dr. Muselman actively contributes as an Ambassador for the Alliance of Women in Workers’ Compensation and plays key roles in organizations such as Kids Chance of Iowa, WorkCompBlitz, and the Claims and Litigation Management Alliance, underscoring her leadership and advocacy in workers’ compensation. A highly sought-after speaker, Dr. Muselman inspires professionals with her engaging talks on leadership, self-development, and risk management. Her philosophy of empathetic and emotionally intelligent leadership is at the heart of her message, encouraging innovation and progressive change in the industry. "Empowerment is key to progress. By nurturing today's professionals with empathy and intelligence, we're crafting tomorrow's leaders." - Dr. Claire C. Muselman

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