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DISCUSSION GROUP TOPIC: ANALYSIS THE COMPENSATION IN AN ORGANIZATION INTRODUCTION Compensation analysis is vital to providing fair, equitable compensation Smart organizations know that providing the right compensation is one of the key pillars to attract and retain the best talent A thorough compensation analysis provides the data and insights for critical decisions as it relates to salaries and total benefits for employees Labor costs make up the majority of expenses for most organizations It can account for up to 70% of the business cost It is, therefore, critical to understand what this cost consists of Although compensation analysis can be a complex process, it is a necessary tool to ensure fair workplace practices and contribute to your employee engagement strategy The purpose of this guide is to provide a basic understanding of compensation analysis and its associated benefits It also offers practical steps on conducting a compensation analysis, which you should tailor to your organization’s needs Page |2 I THEORY A compensation analysis uses internal and external data to determine whether an employer rewards employees fairly or not for the work they are doing Here are a few key concepts in compensation analysis that you need to understand: External competitiveness – Employers compare their compensation data and practices to external companies For example, Salesforce found that their engineer salaries were comparable to engineers at Microsoft It was a fair comparison because of the size and geographical spread of both organizations On the other hand, engineers at Slack were paid much less, but they are a much smaller organization Internal equity – Employers compare employees’ salary and indirect compensation data to ensure fair compensation for the level and type of work done Region – Employers compare compensation data of people doing similar work within a particular region Level – Employers compare employees’ levels and the level at which they are compensated In all of the components mentioned above, it’s noteworthy to mention that even though salary data is important to look at, it is only one part of compensation There are other employee benefits such as medical care, discounts, car, share schemes, and housing allowances A key characteristic of compensation is that it is dynamic This means that it continually changes and progresses based on the internal and external environment As an example, Slack traditionally compensated employees based on localized benchmarks in their New York and San Francisco offices Due to COVID-19, employees had to transition to working remotely As a result, employees relocated to the cities where their homes are located Slack subsequently revised their salary bands based on employees’ location Benefits of conducting a compensation analysis Page |3 A compensation analysis is a vital component of an organization’s talent management strategy, as it helps attract and retain the best employees on the market Let’s take a look at other benefits of a compensation analysis: Salary benchmarking gives an impartial idea of competitive salaries and allows organizations to make informed decisions Salary benchmarks provide data points, whether it is worth it or not to pay an employee above the average salary It also helps understand the holistic remuneration packages offered by employers Evaluating pay equity allows organizations to compensate employees doing the same level of work in a fair way Conducting a comprehensive compensation analysis also enables you to correct historic pay gaps Transparent compensation decisions leave the decision-making of salaries in the hands of accurate and impartial data This leaves employees with a higher level of trust in the organization and their managers Compensation analysis is dynamic, as mentioned before, and thus, you’re able to make projections based on future needs or employees and how this may affect your compensation strategy Identifying opportunities – Through a comprehensive compensation analysis, you can identify where you can improve your compensation strategy You may be able to find different ways to remunerate employees, for example It can be a part of your HR reporting Benefits of conducting a compensation analysis A compensation analysis is a vital component of an organization’s talent management strategy, as it helps attract and retain the best employees on the market Let’s take a look at other benefits of a compensation analysis: Salary benchmarking gives an impartial idea of competitive salaries and allows organizations to make informed decisions Salary benchmarks provide data points, whether it is worth it or not to pay an employee above the average salary It also helps understand the holistic remuneration packages offered by employers Evaluating pay equity allows organizations to compensate employees doing the same level of work in a fair way Conducting a comprehensive compensation analysis also enables you to correct historic pay gaps Page |4 Transparent compensation decisions leave the decision-making of salaries in the hands of accurate and impartial data This leaves employees with a higher level of trust in the organization and their managers Compensation analysis is dynamic, as mentioned before, and thus, you’re able to make projections based on future needs or employees and how this may affect your compensation strategy Identifying opportunities – Through a comprehensive compensation analysis, you can identify where you can improve your compensation strategy You may be able to find different ways to remunerate employees, for example It can be a part of your HR reporting Seven steps to a successful compensation analysis Now that you understand what a compensation analysis is and its benefits, let’s take a look at the practical steps of how to a compensation analysis a Explore the current state of compensation The first step is to gather and consolidate all compensation data in your organization Some companies already have compensation analysis software that helps with this, or others use a spreadsheet with data from their HRIS Whatever your approach may be, make sure that the information you collect includes the following: Job Descriptions: An up to date job description for every job in the organization This should include job titles, roles and responsibilities, level, experience needed, and education This step could take up to six to eight weeks, depending on the size of your organization Organization compensation philosophy: This information is usually embedded in the company handbook, and the deeper philosophy sits with the CEO or HR Heads A compensation philosophy discusses the organization’s compensation philosophy and how they reward employees Salary benchmark: This is usually an annual survey that is completed, which includes pay structures and salary information It compares internal pay data to the external market Depending on the time of the year, you may need to use the previous year’s data or wait until the new compensation market analysis data is published Employee information: You need to have an accurate headcount of the number of employees per department This information also needs to include the following information: Page |5 – Age – Location – Working hours – Exit / Intake data You also need to ensure you collect third party information that could be vital to your organization’s compensation analysis efforts Companies such as Korn Ferry, Deloitte, and PWC typically have large data sets that include global and local salary and compensation information on a mass scale Check with the relevant HR bodies in your country as to the most reputable and reliable companies with these data sets, as they will act as a valuable comparative information source b Determine the types of analyses you are going to conduct You need to consult with key stakeholders to determine the purpose of your compensation analysis This will guide you to determine the type of compensation analysis you will be conducting For example, suppose a CEO was interested in why employees’ salaries were disproportionately increasing each year compared to the market In that case, you may want to conduct a salary analysis of employees who have entered and exited the organization If you need a snapshot to understand the cost per employee, you may conduct a “Headcount analysis” to provide an accurate picture of staffing levels and compensation per employee Another example is that you may want to understand why so many high-talented employees are leaving your organization A retention analysis looks at compensation levels and performance data and compares it to internal and external parity to make sense of this To reiterate, your compensation analysis should always be based on purpose This will ultimately help you extract meaningful information and present it in a palatable way c Choose the right technology To analyze compensation data, you can either use an Excel spreadsheet or compensation analysis software Let’s explore these two options within a bit more detail: Excel Page |6 Microsoft Excel has, for a long time, been the favored tool to analyze compensation data For an organization that wants to keep its operating expenses down, this is a great solution It’s also suitable for small organizations as the calculations needed to be done will likely not be that complicated Even a novice at Excel would be able to use it On the other hand, however, Excel is prone to human error Multiple people can access a spreadsheet, and a misplaced comma can yield inaccurate and consequential results It’s also not automated So, if an employee leaves the organization, it requires someone to delete that employee off the spreadsheet Excel is also not the most ‘attractive format’ to present to stakeholders It requires manual copying and pasting of information into presentations, which can again lead to errors, and it’s also extra work ONLINE CERTIFICATE PROGRAM HR Business Partner 2.0 Certificate Program Develop a full skillset that delivers strategic impact Learn everything from consulting and data literacy skills to basic finance DOWNLOAD SYLLABUS This is what the base data for your compensation analysis in Excel can look like Compensation analysis software Modern compensation analysis software makes managing salary information seamless and straightforward Most companies that offer compensation analysis software are cloud-based Therefore, salary surveys and market prices are already plugged into the system and regularly updated It makes it easier and more up-todate as internal salaries are checked continuously against market rates It also has built-in visualizations and widgets that are customizable, reducing manual effort and allowing for faster decision-making However, many organizations are currently budget-conscious, and compensation analysis software can be expensive It may be challenging to convince key decision-makers to invest in compensation analysis software On the other hand, the cost of losing talent is far more consequential, so you can always justify the decision to invest in such software, especially if you’re a large company d Run the calculations Page |7 Base your calculations on the type of insights that you need For example, if you want to understand the average salary per region, you might divide employees’ total salaries by the number of employees in that region One of the most common calculations that is in most compensation analysis is the salary compa ratio, or comparative ration This ratio helps you determine if you are compensating employees fairly and in line with your organization’s philosophy Here is the formula to calculate the compa ratio: Compa ratio = (Actual salary / mid point of pay range) x 100 The result will be a percentage A result of 100% means the employee is paid exactly at the midpoint of the current market rate for the given position as defined by the organization Anything below means the employee is being paid below average, and anything above indicates an employee is being paid above average Another type of analysis can be a pay equity analysis to determine whether there are any differences in compensation when looking at gender or race/ethnicity Choose your variables carefully for this analysis Examples of variables for pay equity analysis e Address the challenges Whether you have conducted your analysis on Excel or using compensation analysis software, it would have turned your information into insight As a result of this, work on converting insight into action to give validity to the analysis completed The analysis, for example, may indicate that certain employees are underpaid In the next annual salary increase, you need to make sure that these employees get competitive pay in line with their peers You may not be able to reduce the salaries of overpaid employees retroactively, but it will guide you in future salary increases made on these employees The insights from the analysis should also inform your future compensation and talent strategies For example, if you’re underpaying data scientists in your company and data science is a future skill that is rare, you may want to increase the total compensation for your existing data scientists f Communicate the results Finally, once you have completed your compensation analysis, it’s time to communicate the conclusions to your employees You need to develop a Page |8 communication strategy, which will determine how you communicate the insights to employees, managers, and key stakeholders Here are a few tips on this: Who needs to know? Not everyone needs to know about the results Determine this based on the purpose of the compensation analysis What is the current climate? If employees are already feeling stressed, you may want to provide more context in your communication For example, companies such as Intel, Adobe, and Uber have found that employees are more stressed and less likely to talk about salaries to their managers during a pandemic If employees expect a pay increase, but the compensation analysis indicates they are being overpaid, you may want to communicate the results with more empathy What is needed? It is unnecessary to share all the information You not need to communicate the salary information of external companies or internal employees to employees However, you need to provide context and insights into the analysis (e.g., number of participants, general increases across the company, the extent of the study – e.g., using internal and external survey data) It’s also important to discuss challenges that the organization has experienced and the external environment A Korn Ferry study, for example, showed that only 35% of survey participants said that 100% of employees would be eligible for increases in 2021 External environment and market trends can have a massive impact on salary increases or decreases g Train your managers In most organizations, managers are the ones that have compensation discussions with employees, and not HR or reward managers You need to train managers on: How to discuss an increase or flat salary change for employees How to anticipate unhappiness from employees and how to deal with that Things not to say and to never make promises that they cannot fulfill Because managers are always busy, you may want to create a manager guide and a communication plan Your communication plan needs to include clear terms and phrases that are to be used in a compensation conversation Other components you may want to include in your communication plan include Develop a theme – You can create a caricature or catchphrase related to compensation in your organization Page |9 Design – You can create a consistent brand and theme for all communications as it relates to compensation In this way, you’re able to create a consistent experience for employees, irrespective of their department, role, or location Multiple channels – Even though employees mainly have remuneration and compensation discussions with managers, it should not be the only channel Employees should understand they can talk to HR on any platform and any member of the leadership team through multiple channels (text, email, private meetings, etc.) What are the responsibilities of someone in compensation, benefits and rewards? Basically, people who work in compensation and benefits are responsible for devising policies for an organisation’s salary, bonus and incentive schemes These might include: Salaries Bonuses Commission Company cars Pensions Life assurance Profit-sharing Dental plans Medical insurance Vouchers Capital bonds reward schemes They are then in charge of administering, managing and evaluating the payroll, salary structures, and incentive schemes Basically, they make sure that the right people get the right amount of money, at the right time Why is a good compensation, benefits and rewards scheme important? The right compensation and benefits schemes ensure that hard-working employees are rewarded fairly and in the most cost-effective way for the company This in turn then motivates employees to sustain their performance P a g e | 10 The compensation, benefits and reward schemes that these HR professionals manage are not only important for retaining and motivating employees, but also for attracting new people to the company Salary and incentive packages are one of the main reasons why people apply for specific jobs The more attractive compensation and benefits schemes tend to generate more interest in new positions What skills HR employers in this sector look for? Compensation, benefits and reward careers are all about money Consequently, HR professionals who work in this area need to be numerate, commercially aware and have a detailed knowledge of financial laws and regulations As well as monitoring their own company’s salary structures and benefits, these people may be required to research and analyse the salary rates of their competitors However, it’s not all about numbers, paycheques and payrolls These guys need excellent communication skills to make recommendations to employees on pension and insurance schemes and to liaise with government departments and trade unions with regards to compensation and benefits issues Indeed, these roles have a strategic element too, as the needs of the company and employees need to be balanced effectively Furthermore, compensation and benefits are directly linked to market changes Consequently, difficult decisions regarding salary and benefits alterations may need to be made within this department Would I be in charge of all compensation, benefits and reward schemes? The size of the organisation determines what kind of work you might be doing in your compensation and benefits career In smaller organisations, some people might deal with the whole range of responsibilities, whereas larger companies may offer careers which focus on one specific aspect of the compensation and benefits remit, such as payroll management If you’re interested in an HR career that specialises in compensation, benefits and rewards, check out the occupational profile of a Compensation and Benefits Manager If a career in HR sounds perfect for you, take a look at the various HR jobs listed on our jobs board! If you aren’t looking for careers advice but rather how to apply for benefits you should visit the Gov website in the UK or you can visit Application-Gov if you are based in the US and want advice on how to apply for benefits P a g e | 11 II REAL SITUATION Introduction about the Vingroup The predecessor of Vingroup is Technocom Group, established in 1993 in Ukraine In the early 2000s, Technocom returned to Vietnam, focusing on investment in tourism and real estate with two original strategic brands, Vinpearl and Vincom By January 2012, Vincom Joint Stock Company and Vinpearl Joint Stock Company merged and officially operated under the Group model under the name of Vingroup - Joint Stock Company Vingroup is one of the largest multidisciplinary private economic groups in Asia with a market capitalization of nearly 16 billion US dollars The Group operates in core business areas, including: - Technology - Industry - Trade in Services With the desire to bring to the market products and services of international standards and completely new experiences of modern lifestyle, in any field, Vingroup also proves its pioneering role a change in consumer trends P a g e | 12 1.1 At Vingroup, depending on the specific position, there will be separate mandatory standards, but all members meet the requirements: professional qualifications, determination to develop career, a sense of responsibility responsibility and high discipline Managers at the Group are those who fully bring into play the core values of Vingroup: "Tin - Tam - Tri - Speed - Tinh - Nhan", showing enthusiasm, solid bravery, dare to think, dare to do, dare to take responsibility, has the ability to organize and manage well For senior management positions, recruitment requirements are quite strict with mandatory standards of work experience, logical ability, quick judgment, effective problem solving and analysis Those members have formed a strong team with the same goal as the common development of the Group Vingroup staff members always have a drastic and creative initiative in their work under the guidance of a team of responsive leaders, capable of corporate governance, both flexibly and methodically, creating the reputation and level of Vingroup in the market Under the leadership of the Group, Vingroup people always carry a culture with their own identity That culture is bold in humanity, love, discipline; was built and nurtured with the wisdom and ceaseless creativity of the staff Through a long journey of growth and development, it is the Vingroup people who have created good values, contributing to the success of the Group today P a g e | 13 1.2 - Vision: Vingroup aims to develop into a leading Technology - Industry - Trade and Service Group in the region, constantly innovating and innovating to create an ecosystem of classy products and services, contributing in improving the quality of life of Vietnamese people and enhancing the position of Vietnamese brands in the international arena - Mission: For a better life for everyone - Core value: TÍN – TÂM – TRÍ – TỐC – TINH - NHÂN + TÍN: Vingroup puts the prestige on the top position, taking the prestige as a weapon of competition and protecting its reputation as protecting its honor + TÂM : Vingroup has the word Tam as one of the important foundations of doing business We uphold the law and maintain professional ethics and social ethics at the highest standards + TRÍ: Vingroup considers creativity as vitality, a development lever, in order to create different values and identity in each product - service package + TỐC: Vingroup takes "Speed, efficiency in each action" as its guideline and takes "Quick decision - Quick investment - Quick sales - Quick change and adaptation " as the value of its identity + TINH: Vingroup's goal is to gather elite people to create quintessential products and services and contribute to building an elite society + NHÂN: Vingroup builds relationships with customers, colleagues, investors and the society with goodwill, intimacy, and humanity 1.3 For customers Religion and action Create products and services with optimal quality, bring satisfaction to customers at the highest level Act: - Research, analyze, evaluate and synthesize the needs, wants and aspirations of customers deeply and comprehensively (under the angles: economic, cultural, political, social, artistic ) - Research, design and invest in building product and service system with the best quality, to meet the maximum demand and bring satisfaction to customers - Building a business culture based on the motto "Customer-centric of the customer to evaluate and consider any issues P a g e | 14 - Develop a system of communication and behavioral principles for customers for employees, which clearly define the functions, tasks and standard behaviors to be performed take care of customers with many attractive and practical content, ensure the interests and increase the benefits for customers.- Actively build, deploy (and always accompany customers) in social programs from community-oriented, environmental protection programs Work environment of Vingroup Environment Vingroup is honored for many consecutive years to be in the top "Best Workplace in Vietnam" and is proud to be in the top 100 businesses with the top working environment and personal development for employees You will be able to work in the city center locations and experience the most luxurious and classy office space at Vincom Center Royal City, Vincom Center Times City In addition, work in large spaces Large, beautifully decorated resort at Vinpearl luxury resort is also the pride of any staff working here Vingroup is always considered a competitive environment, for those who dare to think and dare to do, with the desire to dedicate and express themselves With steel discipline, high KPIs, strict supervision, work pressure will push yourself to a higher limit, help you step out of your comfort zone, smash prejudices and thoughts things you cannot change Your capacity will be recognized if you are truly passionate, enthusiastic and persistent HR Policies of Vingroup Management and staff training - Focus on management and employee training Employees are also the face of an enterprise through which people can evaluate the professionalism, operation and management of a "owner" Therefore, Vingroup strives to build and develop its staff by focusing on managing and training them throughout the process they work for Vingroup Accordingly, from the leadership level to the staff of Vingroup must be learners and willing to study anytime, anywhere For leading cadres, under 52 hours / year training must be provided; employee year must train 100 hours With Vingroup, those who study will enjoy higher and better benefits, and the additional benefits will not be cut Mr Vuong also said that human nature is not self-conscious Therefore, Vingroup has clear and strict regulations on reward, reward and punishment for everyone to comply - Each employee is responsible for the work he does P a g e | 15 They are the people who have the highest responsibility for their own work and from there try to complete the assigned work If the employee does not complete well, it will be punished, disciplined, or even fired - Ensuring the welfare regime for employees When working at Vingroup, employees will work hours / day, 5.5 days / week (for Administrative Division - Office) and days / week (for Service Division) All Vingroup employees are entitled to the leave in accordance with the Labor Law, fully paid In addition, Vingroup also ensures uniforms, protective equipment, labor tools, machines for employees according to each profession and is committed to providing a healthy, fair, professional working environment most professional Vingroup employees are also entitled to allowances, including: lunch money, transportation costs, phone money, car support to shuttle staff far away In addition, Vingroup employees also enjoy other benefits brought by the group such as: Giving gifts on important occasions such as birthdays, births, marriage; organizing vacation activities and tourism for employees; set up a fund to support employees in difficulty, set up a mutual fund with mutual interest with no interest loans Besides, Vingroup also has its own rewarding regimes for excellent employees - Standardize and simplify to improve management efficiency When working at Vingroup, employees will work hours / day, 5.5 days / week (for Administrative Division - Office) and days / week (for Service Division) All Vingroup employees are entitled to the leave in accordance with the Labor Law, fully paid … In addition, Vingroup also ensures uniforms, protective equipment, labor tools, machines for employees according to each profession and is committed to providing a healthy, fair, professional working environment most professional Vingroup employees are also entitled to allowances, including: lunch money, transportation costs, phone money, car support to shuttle staff far away In addition, Vingroup employees also enjoy other benefits brought by the group such as: Giving gifts on important occasions such as birthdays, births, marriage; organizing vacation activities and tourism for employees; set up a fund to support employees in difficulty, set up a mutual fund with mutual interest with no interest P a g e | 16 loans Besides, Vingroup also has its own rewarding regimes for excellent employees Working mode The benefit of working somewhere is also the first factor, and can also be the key factor in deciding whether you should join that environment or not? So working at Vingroup - One of the most prosperous private groups in Vietnam, what benefits will you enjoy? - Flexible working mode Vingroup designed a flexible and comfortable working mode for all employees Prevent employees from feeling heavily exploited for their labor force or not having enough time for themselves and their personal lives More specifically, in terms of working regime, for the administrative work block of the office, Vingroup employees only work up to hours / day, from Monday to Saturday morning, off from Saturday afternoon and Sunday For sales, retail, employees will work from Monday to the end of Saturday Rarely does a large corporation in the current recruitment market arrange a relatively gentle working regime like Vingroup Besides, employees will also enjoy the holidays and Tet according to regulations - Attractive remuneration Employee rights are one of the top factors of this group It is only when employees are satisfied in terms of their personal interests that they can have an enthusiastic working spirit, dedicate themselves to their work and move towards collective goals That is why the salary, bonus and welfare of Vingroup employees are among the highest today Becoming an employee of Vingroup, you will enjoy a salary that is worthy of your capacity and performance Above all, employees of the sales, sales, divisions will also receive hot bonuses and performance bonuses if they meet the targets and exceed the set sales targets In addition to salary and bonus, employees at Vingroup, depending on their working position, will receive allowances, job allowances such as food allowance, travel, telephone expenses, travel expenses, There are vehicles to transport far-away employees to factories or workshops, … - The challenges you face when working at Vingroup You can get a salary with a pretty huge figure, enough for you to have plenty and "cool down" in front of friends and family However, the truth is that income always comes with the workload, the difficulty of the task, and the efficiency that you create for your own business P a g e | 17 Frameworks work with a lot of discipline A successful team cannot lack discipline Although, the creative space and the comfortable, unrestrained work environment But above all, Vingroup always brings a discipline to all employees, not only for subordinates, but also for superiors - Working mode you can receive when becoming an employee of Vingroup Raining Opportunities At Vincom Retail, you will be able to participate in many supplementary programs that mean: Orientation training Professional training Software engineering training Competent leadership training Career Development Opportunities At Vincom Retail, you will have many opportunities for growth and advancement The personal development roadmap is built clearly and in accordance with your own abilities and desires Remuneration High income policy with transparent rewards for achievements, initiatives, skills, foreign languages, appearance Stable welfare regime includes insurance regimes according to state regulations, periodic health checks at Vinmec, personal health insurance, team building activities for cultural development Preferential treatment when using services of Vingroup such as Vinfast, Vinsmart, Vinmec, Vinschool, Vinhomes - Salary, bonus With competitive remuneration and remuneration, Vingroup quickly owns a team of high-quality domestic and foreign personnel Working at Vingroup, you will receive a salary that is completely worthy of your working capacity As an employee, you will receive an average salary of 10 -15 million / month In addition, you will receive a weekly and monthly bonus if you meet the set targets, and bring your income up to P a g e | 18 tens of millions of dong / month That is a special point that helps Vingroup attract many excellent personnel to its company In addition, Vingroup also focuses on organizing professional skills training programs for employees, through training programs such as: English communication, customer service, real estate management, and short courses to add knowledge and practice skills for specialized departments Corporate welfare regime for employees in the top best in companies operating in Vietnam Employees will be assisted to work by the company's high-end shuttle bus routes Staff members will have the opportunity to take care of their health at the 5-star Vinmec hospital, or to relax and travel at 5-star Vinpearl resorts, and their children to study at the international school system Vinschool In addition, internal activities, parties are regularly organized to encourage and motivate employees' working spirit - Benefit insurance Vingroup covers Social Insurance, Health Insurance and Unemployment Insurance comply with the provisions of the law In addition, all employees can Personal accident insurance 24 / 24h Benefits enjoyed when working at Vin Group - Career Development Opportunities: At Vincom Retail, you will have many opportunities for growth and advancement Personal road development is built clearly and in accordance with their own abilities and desires - Always trained to improve skills during the working time - All Vingroup employees are allowed to take leave according to the provisions of the Labor Law, are fully paid - Add to That, Vingroup has security, safe labor, using labor, machines for employees by profession and committed to providing a healthy, fair and professional working environment Best - Vingroup employees are entitled to allowances, including: food, transportation, telephone, car support to shuttle staff far away - In addition, Vingroup employees are entitled to various benefits provided by the corporation such as: Giving gifts to important things such as birthdays, births, marriage; organizing vacation activities and tourism for employees; set up a fund to support employees with difficulties, set up a fund that is compatible with interest-free loans Besides, Vingroup also has its own people rewarding excellent employees P a g e | 19
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