Considerations in Employee Compensation
Robert Krajewski, MSIR, PHR, HR Business Partner

Even in an uncertain economy, "star" performers have options. It continues to be critical to ensure that they are motivated and retained — by recognizing and rewarding their contributions.

In the realm of total rewards, base salary remains the most significant component of the total compensation package. Employees continue to place the greatest value on base salary merit increases because they understand that increases to their base salary compound year over year. According to the 38th WorldatWork Salary Budget Survey, the 2011 average merit budget across the nation is 3.0%. The Hay Group estimates that the trend of 3.0% merit budgets will continue into 2012. Although these estimates indicate positive movement from the 1.5% - 2.5% merit budgets seen in 2009, they are still well below the 4% average annual increases between 2005 and 2008.

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Employee Value Propositions (EVPs) and Their Benefit to Organizations
Matt DiSilvio, Junior Associate HR Business Partner

Like many, the first time I heard the term EVP I had no idea what it meant. Though the acronym undoubtedly has a number of meanings, in human capital terms EVP stands for Employee Value Proposition. Simply put, Employee Value Proposition is a statement of why the total work experience at one organization is ultimately better than the total work experience at another organization. Essentially, it’s why employees choose to come to and stay with an organization. If you think “total work experience” sounds like a broad term, you are not alone - it is. Organizations need to take many things into account, including career development, work-life balance, and compensation in order to meet the needs and desires of their employees.

You may be wondering what kind of value EVPs bring to an organization. After all, employees choose one organization over another for the compensation, right? Well, not exactly. Compensation is important, as demonstrated in Maslow’s Hierarchy of Needs: if a person’s safety needs (defined as security of body, employment, resources, morality, family, health and property) are not met, then compensation is important.

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