WorldatWork C8 - Business Acumen for Compensation Professional

Ensuring support from all internal and external stakeholders

Estimating results based on historical data

Using statistical methods to predict outcomes

Determining, sourcing and collecting appropriate data

They typically have the greatest effect on net income and operating results of any organizational expense or program

Their success or failure is closely tied to the success or failure of organizationwide goals and objectives

They have very little effect as long as they are managed effectively and efficiently

They affect the organization’s overall financial status and impact multiple stakeholders across most, if not all, business units

The calendar year from January 1 to December 31

The fiscal year, which matches the calendar year from January 1 to December 31

The fiscal year, which shows results from July 1 to June 30

The fiscal year, which may match the calendar year or may be a different 12-month period, depending on the company

Focus on negative issues first, such as compensation costs exceeding budget, to get their attention

Provide a wide range of facts and figures. With their high level of responsibility, executives must have all the data before they can make informed decisions.

Assume they have little knowledge of the issue and make a detailed presentation leading up to the purpose of the meeting.

Recommend a solution that will solve the issue and explain why it is the best solution available.

Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable

Qualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns

Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels

No additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.

The employee

A concerned co-worker

The employee’s manager

The employee’s department head

Pricing your products appropriately

Understanding your business and its competitive strengths and weaknesses

Forecasting profit, growth and investment performance to develop realistic budgets

Evaluating prior year performance for the narrative portion of annual financial reports

Because legal compliance with compensation-related regulations is the responsibility of the compensation department

Because the compensation professional has a fiduciary responsibility to ensure that the financial resources of their organization are spent in a prudent manner

Because it is possible to pay significantly less for talent in different countries and compensation should advise management on when and where to locate various jobs within the company

They shouldn’t. Due to the complexities of global regulations and practices, compensation administration outside of the home country should be outsourced.

Being firm and uncompromising in your decision-making

Representing your view with data and relating it to business results

Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking

Giving priority to perspectives based on the job or influence level of the stakeholders

Keep them brief

Use multiple media

Include all details related to the issue

Leave backup data out of the presentation so there is time to develop an effective response to unexpected questions