FAR Roundtable
Luncheon Program
Developing Market –
Based Pay Practices
March 22, 2006
Jim Moss
Managing Director
Total Rewards – Organizational Framework
Mission, Goals, Values
and Strategies
Current Marketplace Realities
Employee Preferences
Pay
Training &
Development
Benefits
Work
Environment
Source: Towers Perrin
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Developing a Total Rewards Strategy - The Value Proposition
Manage employment elements between the association and employee
Develop a road map that will:
 Identify value-added employment-related factors
 Prioritize the association’s human resource investment
 Rationalize different components of the employment interface
 Communicate the links between business strategy
Forge a shared destiny with employees through the ability to:
 Attract, retain, and motivate
 Protect, enable, and reward
2
Establishing a Total Rewards Framework
Involvement in
Decisions
Opportunity for
Growth
Direct Pay
Respect
Indirect Pay
Recognition
Job Itself
Source: Aon Consulting
3
Total Rewards – Program Components
Compensation
Benefits
Fixed pay
Health and Welfare
Bonus plan
Retirement
Long term incentives
Paid time off
Personal Development
Work Environment
Performance management
Culture and climate
Training and development
Work design and flexibility
Career development
Quality of work life
Relational Rewards
Source: Hewitt
4
Indirect
Direct
Transactional Rewards
Total Rewards – Focus on Work Life Balance
Helping employees manage their physical and mental health
Helping employees take care of dependents
Making work more flexible
Saving employees’ time
Supporting employees through the financial lifecycle
Creating a supportive culture and environment
Source: New England Employee Benefits Council
5
The Workforce Commitment Model
Source: Aon Consulting
6
Compensation Philosophy and Policy
Competitive Market: peer group or survey sources
Competitive stance: position relative to market
Job value determination: internal equity versus market position
Pay mix: fixed versus variable pay
Pay structure: control versus flexibility
Reward focus: group or individual performance
Pay management: degree of participation
7
Market Pricing – Competitive Labor Market Sectors
Government
For-profit
Not-for-profit
Federal
Industry specific
Trade association
Healthcare
State
General industry
Professional
societies
Higher education
Municipal
Education
Charitables
8
Other non-profit
Think tanks
Social/community
service
Determining Appropriate Labor Markets – Selection Criteria
Size of annual
operating budget
Organization
structure
Focus/mission
Position roles/
responsibility
Type of
not-for-profit
Compensation
philosophy
9
Market Pricing Protocol - Illustrative Work Functions
Work
Functions
Financial
Operations
Government
Relations
Membership
Standards/
Certification
Meeting &
Conference
Planning
Market/
Sector
• Not-for-profit
• General Industry
• Not-for-profit
• Corporate
• Survey Peer Group
• Not-for-profit
• Not-for-profit
• Not-for-profit
• General Industry
Organizati
on Size
• Similar Budget Size
• All Sizes
• Similar Budget Size
• $1-3 Billion
• Similar Budget Size
• Similar Budget Size
• Similar Budget Size
• National
• Regional
• National
• Regional
• National
• Regional
• National
• Regional
• National
• Regional
Geography
10
Market Pricing Protocol – Position Level
Position Level
Labor Markets
Geographic Location
Leadership
Survey Peer Group
Not-for-Profit
National
Management
Not-for-Profit
Regional and Local
Knowledge Workers/
Individual Contributors
Not-for-Profit
General Industry
Regional and Local
Semi-Technical
Not-for-Profit
General Industry
Local
Administrative Support
General Industry
Local
11
Market Pricing – Representative Published Survey Sources
 Abbott, Langer & Associates, Compensation in Nonprofit Organizations
 American Society of Association Executives, Compensation and Benefits Report
Not-for-Profit
 Cordom Associates, Salary Survey of Non-Profit Organizations
 Greater Washington Society of Association Executives, Compensation and Benefits Survey Report
 PRM Consulting, Management Compensation Report of Not-for-Profit Organizations
 Business & Legal Reports, Survey of Nonexempt Compensation – Pennsylvania
Survey of Nonexempt Compensation – Pennsylvania
Survey of Exempt Compensation – Northeast/Mid-Atlantic
 Mercer Human Resource Consulting
Corporate Marketing and Communications Survey Report
General
Industry
Information Technology Compensation Survey
 Robert Half International, Finance, Accounting and Management Salary Guide
 Watson Wyatt
Industry Report on Sales and Marketing
Industry Report on Top Management Compensation
Geographic Report on Middle Management Personnel
Geographic Report on Office Personnel
Geographic Report on Professional and Scientific Personnel
12
Market Pricing – Position Matching/Comparability
Step 1
Step 2
Step 3
Market adjustment
Organization
comparability
Position
matching
Step 4
Step 5
Step 6
Number of
survey matches
Effective
date of data
Summary
pay statistics
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Premium
Discount
Summary Statistics Definitions
Actual
low
25th
percentile
Median
Mean
75th
percentile
Actual
high
25th percentile represents the figure above which 75% of all reported figures fall
Mean represents the average of all figures reported (typically 5% higher than median)
Median represents the figure above and below which half of all reported figures fall
75th percentile represents the figure above which 25% of all reported figures fall
14
Closing and Questions
15
About PRM Consulting, Inc.
PRM is a professional services firm specializing in helping not-for-profits
maximize performance and improve organizational efficiency through
human capital. We:
 Have more than 100 years of combined staff experience
 Significant experience in consulting with trade associations, professional
societies and charitables
 Benchmark human resource practices across the not-for-profit market
 Have a dedicated, full-time staff with roots in major consulting firms
 Conduct on-going employee research and compensation levels as well as
practices
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