New Compensation Metrics – A 2017 Resolution

Health centers need to know that the way they’re spending 3/4 of their budgets is actually being done right. Adopt this set of metrics as a first step to gauging your the effectiveness of your program.

The Compensation Times

The compensation profession suffers from a severe lack of effective metrics.  To be frank, the typical measures used in describing compensation program success really have nothing to do with success.  This year, try something that makes more sense — focus on metrics that actually tell you if your compensation program is achieving its mission.

Traditional compensation “metrics” include:

  • “Compa-Ratio” – the ratio of a current employee’s pay to range midpoint/target. This measure only means something if current pay SHOULD be at midpoint/target; without performance information, it’s meaningless, and potentially very deceptive.
  • “Average Compa Ratio” – the average of individual compa-ratios.  This is even worse.  Its underlying statistic is meaningless because it doesn’t take into account performance.  Average things together and all your errors actually wash out — talk about a way to be deceptive!  If you’re bound and determined to use something like this, consider using absolute values.
  • “Average Increase”…

View original post 1,053 more words

About Edmund B. Ura

Edmund B. Ura, MAIR, JD, works with governing boards, executives and human resources staff to develop methodologies for ensuring fair and equitable compensation programs that support achievement of organizations' missions. Contact Ed at ebura@mercesconsulting.com.
This entry was posted in Compensation, Performance Management, Provider Compensation. Bookmark the permalink.

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