12 Case Studies of Companies that

Revised How They Compensate

Employees
(Source : SHRM - The Voice of All Things Work)
By Dale Buss January 26, 2022
SHRM 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.

Questions:

1. Do you agree that higher compensation is the bait that most companies use for higher
retention rates? Justify.
2. Read the article The Concept of the Free Agent in the Workplace | ZenBusiness Inc and
understanding the posed challenge between retention and attraction, what are the
challenges faced by CEOs and CHROS?
3. How far do you think the initiatives by Goldman Sachs and Tyson Foods’ is justified?
4. Do you think sign-in bonus is a good strategy in terms of attracting new joinees? Analyze the
pros and cons of the same.
5. As per the case study, which is the new factors demand HR attention alongwith increase in
compensation?
6. Identify the strategy adopted by RUSHDOWN REVOLT for compensation decision?
7. Identify its challenges and write how has BRIDGEWATER INTERIORS tried to strike a balance
between monetary and non – monetary benefits?
8. How has WORLD INSURANCE managed the compensation structures in terms of
acquisitions?
9. CODILITY has adopted an innovative method to neutralize compensation structures? How far
do you think it is economical for the company? Evaluate its pros and cons? Identify how can
it be successfully implemented?
10. Retaining my workforce is my No. 1 strategy. Discuss.
11. How attractive is autonomy for an employee? Can it really be the carrot for a risk taker in a
new start up, characterized by low pay?
12. Non – monetary benefits like experiential satisfaction, returnship programmes, DE& I
options have been adopted by few companies? Highlight the importance of these types of
benefits.
13. Does time-off indeed rejuvenate employees? How can this be beneficial to the organization
especially in the current scenario?
14. Highlight how KPMG US has managed higher retention rates?
15. List down all the compensation elements identified in the case study.