Innovative Compensation Model: Consumer Products

Using compensation to drive performance and career development at a consumer products company

Client Case Study

Situation

This major consumer product manufacturer was experiencing problems with a pay grade structure that over the years had become too inflexible to accommodate their multiple plant locations and evolving talent strategies.

Complications

The current pay structure produced several problems:

  • Frustrated employees perceived that only job promotions ensured salary growth.
  • The employer realized that not all individuals sought management roles, eliminating promotions as a viable incentive.
  • Those in professional and technical occupations, such as engineers, wanted upward mobility within their field without becoming managers.

Approach

  1. Analysis: Conducted an in-depth analysis of the growing needs of the manufacturer
  2. Design: Developed an innovative compensation model that collapsed the large number of pay grades into a few wide bands, each representing a different level in the company hierarchy.

Results

  • This solution provided an alternative to the up or out mentality that was formerly associated with their system.
  • The new compensation program encouraged cross-training by motivating employees to move laterally.
  • Employees gained new skills and increased their earning potential without being promoted in the traditional sense.
  • The increased flexibility and latitude within the salary bands empowered managers to reward and retain high performing individuals, and addressed geographic differentials without requiring customized pay decisions for each region of the country.
  • Managers soon gained more independence within the guidelines of the new system to reward key performers and critical skill sets. Employees gained the ability to learn new skills outside their traditional roles and were rewarded without the pressure to earn a grade level promotion.

Related Information

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Anna Meyer
Leadership Development

Intuit

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Technical Program Manager

Google

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President & CEO

LSS

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VP Human Resources

Exelixis

The refreshing thing about LSA is that they focus on understanding our business situation and helping me succeed instead of selling stuff. Their experts are an invaluable resource that help me deliver higher quality results faster. I recommend them to anyone looking to improve the performance of their workforce.

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VP of Human Resources

Cutera

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Director of Training and Organizational Development

Dimension Data

We hired LSA Global to design and deliver a customized outdoor experiential new employee orientation program for our recent group of MBA new hires.

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Talent Acquisition

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President and Chief Executive Office

Fujitsu

We looked to LSA Global as a consulting partner to help us explore innovative and scholarly approaches to promote employee engagement and sustain the unique culture we’ve built over the last decade.  LSA helped us perpetuate coaching as a discipline across the organization by integrating our core values, goal setting, and performance management.

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Vice President, Human Resources

Redwood Trust

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Vice President of Operations

Proxicom

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US Enterprise Services

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Lisa Bruun
SVP Human Resources

Ellie Mae

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Noelle Van Vlierbergen
Human Resources Director

AKQA

The experiential New Employee Orientation was an incredible success for 2,500+ new hires over 4 years spread across the globe.

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Brenda Wagner
Founder and President

Proxicom

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Richard Morse
Senior Director Talent Management

Gilead

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