1. Maintaining a Competitive Edge: Effective Strategies for Competitive Market Pay Analysis
Presentation Team
Gregory A. Gast, SPHR, Principal, PROXUS Jeffrey Green, Principal, PROXUS Maya Johnson, HR Manager, Air Products Healthcare

2. Our presenters today come from both Air Products Healthcare and PROXUS
Maya Johnson, HR Manager, Air Products Healthcare
Jeff Green, Principal, PROXUS
Greg Gast, SPHR, Principal, PROXUS

3. Today we will cover the following topics
The situation and the players
Air Products Healthcare
PROXUS
The Challenge
AHS acquisition by Air Products
Growth through Acquisition strategy
The Solution
Project scope
Project implementation
Outcomes and Lessons

4. Let’s start with a history of Air Products Healthcare
American Homecare Supply formed in 1999
Air Products acquisition of AHS in 2002
15+ acquisitions in 5 years

5. Air Products Healthcare grew by acquisition The strategy was to leverage existing strengths
Local Identity
Patient Care
Customer Experience
Grandfathered Structures

6. It soon became clear that a major problem existed
Grandfathered compensation plans created
difficulty establishing and administering a
competitive pay program across multiple
geographic regions
The corporate growth by acquisition strategy drove the need for a corresponding HR strategy to support it. The PROXUS – Air Products partnership was established to develop and implement the HR strategy specific to compensation

7. Not having a consistent approach to base pay created challenges
Difficulties around recruiting/hiring/onboarding of new hires post-acquisition
Pay for Performance relationship could not be implemented
Increased exposure to perceived unequal/unfair pay practices
Impossible to benchmark competitiveness in overall industry
Inconsistency in pay rates and job title structure

8. We looked at the business issue and identified a goal
To develop a consistent, yet geographically
adjusted pay program structure across the
organization

9. PROXUS was identified as the best partner to help us achieve these goals
Who is PROXUS:
HR Management and Consulting firm
Joint venture of Granatt HR and Professional Payroll Solutions
Provide Payroll, HR and Benefits services

10. Initial goals for Air Products – PROXUS Partnership
PROXUS was engaged to develop a simple, easy to
administer base pay program that was:
Consistent with the pay philosophy of APH
Competitive within each geographic location
Equitable within APH
Inclusive of reasonable pay ranges for each position
Easily accommodating of future acquisitions

11. Further Analysis resulted in goals being broken into manageable, sequential components
Short Term
Everyone paid within their
range (no one over or under)
Standardized titles recognized
by entire organization
Long Term
Established procedure for
adjusting pay ranges/geographical
differentials
Enhanced automation of
compensation program

12. The Air Products – PROXUS Partnership
The Project Plan - A 4 Step Process:
Position review and analysis of all job titles
Identification of market data sources
Market analysis
Salary structure re-design

13. Prioritization of project phases
1. Exempt / Non Exempt
2. Job Titles
3. Job Descriptions
4. Benchmark Companies
5. Geographic Differences

14. Identify . market data sources
Execute The Plan
Secure Leadership Commitment
Identify market data sources
Job matching
techniques and criteria
Geographically
adjusted
pay program

15. We will walk you through our plan
Identify market data sources
Job matching
techniques
and criteria
Leadership
commitment
Geographic Adjustments

16. The 1st thing we did was to determine Market Data Requirements
Sources
The 1st thing we did was to determine Market Data Requirements
Market Data Sources
Define the competitive marketplace
Who are key competitors?
What industries do we operate within?
Within what geographic regions are we located?
Research available survey sources
Industry
Position
Trade and professional organizations
Obtain input from internal managers

17. Next we had to select the right Market Data for this project
Sources
Next we had to select the right Market Data for this project
Market data used for the Air Products project:
Economic Research Institute
Comp Data Surveys
Watson Wyatt Hospital/Healthcare Survey

18. Effective techniques for job matching build credibility
Collect, organize and analyze available job related information
Job title report
Job descriptions
Table of organization charts
Compare job titles across facilities and geographic regions
Establish job families
Reduce overall # of job titles
Identify each unique job classification
Conduct interviews as necessary
Improve understanding of scope and role
Involves managers in the process

19. Establishing Job Families and Job Documentation builds consistency
Matching
Establishing Job Families and Job Documentation builds consistency
Human resources, with location representatives, established the following job families:
Accounts Receivable
Pharmacy
Administrative
Rehabilitation
Customer Service
Respiratory
Delivery
Sales IV
Warehouse
Resulted in reduction from 155 to 60 job titles

20. Critical Considerations in Pay Program Development
Geographic
Adjustment
Critical Considerations in Pay Program Development
How do we create a consistent program across
locations in multiple states?
Obtained geographic differentials
By location or nearest metropolitan area
Economic Research Institute data utilized
Analyzed the results
Determine # of structures required
High/low market values dictated # of salary grades
Include location differential list (if appropriate per APH)

21. % of U.S. National Average
Geographic
Adjustment
6 geographic regional structures based on a % of the U.S. national average
% of U.S. National Average
Structure ID
Range 90 A
88% – 92% 95 B
93% - 97%
100 C
98% - 102%
105 D
103% - 107%
110 E
108% - 112%
115 F
113% - 118%

22. Fine tuning the results
Geographic
Adjustment
Fine tuning the results
Each location slotted into the appropriate structure (A - F)
Individual jobs slotted in the appropriate grade/range for their structure
All jobs were slotted into the same grade across all locations
“Majority rule” used to standardize grading across locations
Pay higher in range if local market conditions dictate
Maintain same salary grade for all positions

23. Implementation Challenges
Developing a philosophy to address employees:
Under range minimum
Over range maximum
Educating the management team
Maintaining confidentiality
Technology restrictions
Click to bring up each item for discussion (items display after manual click allowing you to discuss)

24. Discussion Activity Break into pairs or trios
Discuss your experience with these issues and how you have addressed them
At the end of the discussion we will ask 2-3 groups to share a key learning from their discussion
This is a place holder for a discussion activity where you involve the group in the process.
I’m glad to help you identify what you can put here. You should receive higher involvement and interest if you do this Should take no more than minutes

25. Challenges presented in implementing the process Discussion topics
Philosophy around under minimum/over maximum pay
Management team education needs
Maintaining Confidentiality
Technology restrictions
Delete the show to aid discussion DELETE the banner if you are going to use this slide.
This does not have the build that is present on the earlier slide.

26. The President must lead the charge and empower HR to proceed
Leadership
Commitment
The President must lead the charge and empower HR to proceed
Align the HR project with the business strategy
Growth through acquisition strategy
Broad geographic locations
Communicate early and often with leadership
Educate on compensation fundamentals
Establish multiple check-in points
Engage the management team throughout process
Establishment of job families
Job description content
Solicit input on salary information sources
Review of job titles for accuracy

27. Lessons learned from
Communicate the difficult information (employee impact)
Compensation does not function in a vacuum
Benefits and employee relations implications
Alignment with corporate strategy
Communications to multiple stakeholders
Service provider relationship must be a true partnership
Role of PROXUS has evolved from 2003 – present
Extension of HR as opposed to outsider
Avoid organizational paralysis…move ahead (“we do not have to get it all right out of the gate”, Gretchen Pendleton – VPHR, Air Products Healthcare)

28. This change does not happen overnight, it is a journey that can make a difference to a company

29. Questions?