Summary
Compensation surveys for 2007 project the same flat US salary budgets that have been seen for five years -- a smooth, unchanging pool of merit increases averaging 3.7% and variable pay stuck at less than 12% of payroll. But at high-performing companies like Textron Inc, money is moving below the surface. Segmentation puts employees in groups according to their potential impact on value creation and earnings and the full cost of replacing them. Under direction from its board of directors, Textron segmented the workforce, shifted to a global performance management system for all professional employees and installed uniform incentive pay design and metrics for the top 1,000 executives and managers across all business units and locations. In Deloitte's 2006 rewards survey, more than one-third of the companies reported they view performance pay as a critical tool for a limited group of key employees, but not the remainder of the workforce.
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Money Transfer
Compensation surveys for 2007 project the same flat U.S. salary budgets that have been seen for five years-a smooth, unchanging pool of merit increases averaging 3.7 percent and variable pay stuck at less than 12 percent of payroll. But at high-performing companies like Textron Inc., money is moving below the surface.
Compensation executives at these companies adopt the flat overall budgets reported in the surveys but then sharply segment the workforce and push the cash around to retain critical talent. Multinationals are managing the top segments on a global basis and leaving the rest to local management.Segmentation puts employees in groups ac...See the full content of this document
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