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ZONED OUTAn Innovative Approach

to Compensation

Agenda• Universal Challenges• Change or Become Irrelevant• Find Your Why• Market Reference Pay

• Key Points• Job Pricing• Individual Positioning• Communication• Ongoing Administration

• Open Discussion

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Universal Challenges• Salary Stagnation/Pay for Performance• Frequently Changing, Complex, Organizational Structures• Increase in “Hybrid” Roles not Easily Benchmarked• Global Workforce• New Industries• Crowd-Sourced Data (glassdoor, LinkedIn, etc.)• Pay Equity Legislation

Market Driven

Flexibility

Agility

Complexity

Internal Focus

Inefficiency

Rigidity

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Find Your Why• Why did Ocean Spray Implement Market Reference Pay

• Update an out of date structure• De-Mystify and Simplify Compensation• More accurate and competitive information to support pay

decisions• More Flexibility than formal minimums and maximums provide• Update data without impacting other structure components• More focus on Variable Pay and Total Cash Compensation• Separate pay from career levels and eliminate false hierarchies• Simplification of how salary position is measured• Facilitate straightforward, honest communication with employees

about pay

Market Reference Pay

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Key Points• Assigns and Individual Market Reference Point (MRP) to every job

• No Formal Ranges, Minimums, Midpoints or Maximums• Market Focused - Improves Competitive Position• Credible - Quantifiable Information and Data• Supports Transparent Communication

• but it won’t make the hard conversations easier!• Can be Labor Intensive

• Organization Size• Technology

Job Pricing• Identify at least one Survey Benchmark for each job• Blend matches or find equivalencies as needed• Develop a Market Reference Point (MRP) Philosophy

• Market Median or 50th Percentile for most jobs• Other Data Points used for some jobs

• Higher (75th or 90th Percentile) for Critical Roles• Lower (25th Percentile) for roles that may not fully meet the benchmark• Specific blends of data points to align with internal hierarchy that is

outside of benchmark norms

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Individual Positioning• In general, the MRP should represent the appropriate pay for

someone fully functioning in a role, and performing well• Market Position (MP) = Salary ÷ MRP• Market Position (MP) is determined by Individual Attributes such as

• Experience/Length of Service• Performance/Potential• Skills• Key Competencies/Behaviors

• Consider Salaries of employees in the same/like role(s) to ensure equitable differentiation in Market Position

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Communication• Transparency is not the indiscriminate sharing of all

information• We want our employees to understand how her/his pay is

managed and delivered and will provide information on MRP, Salary Position and Market Data when asked

• Understand the underlying issues and provide context

Ongoing Administration• Annual Survey Participation and Update of all MRPs• New Jobs Priced when created• Existing MRPs evaluated as needed

• Equity Concerns• Market/Hiring Challenges

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Open Discussion