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BASE PAY

How Sound Is Your Foundation?

  1. DO YOU HAVE A MINIMUM AND MAXIMUM RATE OF PAY FOR EACH JOB? (Pick one)
    2.  
    A) Yes
    B) No

  2. WHAT INFORMATION DO YOU USE TO SET PAY FOR NEW HIRES? (Pick the most important single factor)
    3.  
    A) Salary surveys
    B) Information obtained from friends and associates
    C) Last rate of pay of applicant
    D) Rate suggested by recruiter
    E) Pay of others in your company doing the same or similar job
    F) Place in salary range corresponding with experience and expected performance

  3. DO YOU HAVE A WRITTEN PERFORMANCE APPRAISAL THAT IS REGULARLY CONDUCTED FOR EACH EMPLOYEE? (Pick one)
    4.  
    A) Yes
    B) No

  4. HOW DO YOU DETERMINE THE RAISE BUDGET? (Apart from the company's ability to pay)
    5.  
    A) CPI (“cost of living”) movement
    B) Published surveys of what other companies are doing
    C) Information obtained from friends and associates
    D) Amount needed to be competitive and reward changes 
       in performance within pay range

  5. HOW DO YOU DETERMINE THE SIZE OF INDIVIDUAL RAISES? (Pick the most important factor)
    6.  
    A) Length of service
    B) Better performer gets the larger percent increase, 
       their position in pay range (or market) does NOT influence 
       the amount of the raise
    C) Performance level is equated to pay level in the range, 
       and the raise is the amount needed to equate pay and performance
    D) Same percentage for everyone

SCORING

  1. A - 10, B - 0
  2. A - 20, B - 5, C -  0, D - 15, E - 20, F - 30
  3. A - 20, B - 0
  4. A -   0, B - 5, C -  0, D - 10
  5. A - 10, B - 0, C - 30, D - 10
0 - 30
 Significant opportunity exists for improving the link between pay and performance. In addition, it is very likely that some employees are being overpaid while others are underpaid. The potential impact on turnover as well as overall payroll costs could be serious.
35 - 60
 Although some of the elements of sound pay practices are present, important improvements can be made in their use and in the linkage of pay and performance. It’s most likely that either determination of pay levels or assessment of performance need work.
65 - 95
 Most of the practices in use are sound; however, there is room for improvement. The principal efforts would be to refine and fine tune some existing practices and to make them function together as a cohesive whole.
100
 CONGRATULATIONS! A perfect score! We would like the opportunity to assist you in the annual review and maintenance of your program.

BONUS PLANS

How Much Incentive Is There?

  1. IS THE BONUS PLAN WRITTEN? (Pick one)
    2.  
    A) Yes
    B) No

  2. WHAT RESULTS/ACTIONS MUST BE ACHIEVED FOR A BONUS TO BE PAYABLE? (Check the most important factor)
    3.  
    A) These are determined by management sometime prior to payment
    B) These are spelled out in the plan
    C) General results or factors are spelled out but significant revision 
       is made prior to payment

  3. HOW IS THE BONUS AMOUNT DETERMINED? (Pick one)
    4.  
    A) It's discretionary based on how good the year was
    B) There is a formula tied to results that determines the amount
    C) We always give the same amount if we give anything at all

  4. HOW ARE COMMUNICATIONS HANDLED? (Check the most important factor)
    5.  
    A) Employees know they are eligible when they get a bonus check
    B) Provisions of the Plan and progress toward bonus are regularly reported 
       to eligible employees
    C) Plan provisions are communicated; performance results for bonus are 
       reported with bonus

SCORING

  1. A - 30, B - 0
  2. A -   0, B - 20, C - 10
  3. A -   0, B - 30, C - 10
  4. A -   0, B - 20, C - 10
0 - 30
 Significant opportunity exists for improvement. It is very likely that the bonus has shown no results in better performance, and some employees may be considering it a regular part of their pay. The potential is that the money spent in this way has wasted.
40 - 60
 Although some of the elements of a true incentive bonus are present, important improvements can be made in their use and in the linkage with performance. It’s most likely that communication of the Plan and/or progress toward a bonus need work to make the bonus dollars work for the business.
70 - 90
 Most of the practices in use are good; however, there is room for improvement. The principal efforts would be to refine and fine tune existing practices to make them function together as a cohesive whole.
100
 CONGRATULATIONS! A perfect score! We would like the opportunity to assist you in the annual review and maintenance of your program.


Fulminata Associates
P O Box 571301
Dallas, TX 75357-1301
(214) 321-5191

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