1. Benchmarking Compensation & Benefits: How Do You Compare? Christina L. Greathouse, Ph.D. Strategic Performance Group April 30, 2008

2. Copyright 2008 - SPG 2 Benchmarking Comp & Benefits Determining compensation objectives Choosing sources of data Choosing comparable organizations Matching your positions to benchmark jobs Using multiple data points Deciding which statistics to use Aging the data

3. Copyright 2008 - SPG 3 Benchmarking Comp & Benefits Determining your market position Making market adjustments Developing pay ranges Paying for performance Calculating operating ratios Benchmarking your benefits Communicating total compensation information

4. Copyright 2008 - SPG 4 Determining Compensation Objectives To achieve internal equity, ensuring that employees are paid fairly in relation to one another. To achieve external equity, ensuring that employees are paid fairly and competitively in relation to the external marketplace. To develop pay management practices that are fair, objective, transparent and legally defensible. To develop a compensation process and system that can be easily maintained and updated.

5. Copyright 2008 - SPG 5 Internal Equity Job Evaluation: Determining the relative worth of jobs in order to establish which jobs should be paid more than others within an organization Job Ranking Job Classification Point System Work Valuation

6. Copyright 2008 - SPG 6 External Equity: Sources of Data 1.The American Society of Association Executives Compensation and Benefits Study 2.PRM Consulting Management Compensation Report for Not-for-Profit Organizations 3.Cordom Associates Salary Survey of Nonprofit Organizations 4.Human Resources Association – Washington Capital Area (HRA-WCA) Compensation Survey Report 5.U.S. Mercer Benchmark Database 6.SalarySource.com 7.National Journal Biennial Salary Survey 8.National Compensation Study – Association Chief Staff Executives (American Research Company)

7. Copyright 2008 - SPG 7 Choosing Comparable Organizations Industry Size of budget Number of employees Location Individual versus institutional members Tax status

8. Copyright 2008 - SPG 8 Matching Your Jobs to Benchmark Jobs Scope Experience required Education required Supervisory responsibility Multi-function jobs

9. Copyright 2008 - SPG 9 Deciding Which Data to Use Mean: Average Median: Midpoint/50 th Percentile - figure above and below which half of the reported compensation figures fall 25 th Percentile: figure above which 75% of the reported compensation figures fall 75 th Percentile: figure above which 25% of the reported compensation figures fall

10. Copyright 2008 - SPG 10 Arriving at a Market Price Take the median or average of the data based on two or more “cuts”: Location Size (budget and/or # of employees) Industry Type of organization

11. Copyright 2008 - SPG 11 Arriving at a Market Price 50 th %75 th % WDC$283,600$432,800 Trade Assn.$361,800$619,000 $30M-$60M$306,000$369,200 100-250 Emp.$307,000$393,800 MEDIAN:$306,000$413,300 AVERAGE:$314,350$453,750

12. Copyright 2008 - SPG 12 Aging the Data Increases for executive staff ranged from 4.6% to 5.3% in 2006-2007 Increases for managers/supervisors averaged 4% in 2006-2007 Increases for other staff averaged 3.9% in 2006-2007

13. Copyright 2008 - SPG 13 Determining Your Market Position ASAEPRMHRAAVG.YOUR ORG. DIFF. $56.2$62.1$71.4$63.2$72.214% $85.8$97.1$73.9$85.6$80.1-6% $127.1$156.7$141.3$141.7$110.1-22%

14. Copyright 2008 - SPG 14 Adjustments to Market Price QUALIFICATIONS PERFORMANCE Entry-Level, Little or No Experience Lacks Some Position Quals Meets Position Quals Above Average Quals Extremely Well Qualified Needs Improvement -20%-15%-10%-5%__ Partially Meets Expectations -15%-10%-5%__+5% Meets Expectations -10%-5%__+5%+10% Exceeds Expectations -5%__+5%+10%+15% Significantly Exceeds Expectations __+5%+10%+15%+20%

15. Copyright 2008 - SPG 15 Developing Pay Ranges MinMidMax Grade 1$32,000$40,000$48,000 Grade 2$36,800$46,000$55,200 Grade 3$42,320$52,900$63,480 Grade 4$48,668$60,835$73,002 Grade 5$55,968$69,960$83,952

16. Copyright 2008 - SPG 16 Merit Increases MARKET POSITION PERFORMANCE Below 50% Percentile 50 th to 75 th Percentile Above 50 th Percentile Unsatisfactory 0% Needs Improvement 0%- 2.8%0%-2%0% Meets Expectations 3.5% - 4.5%3.0% - 3.5%2.5% - 3.0% Exceeds Expectations 5.0%- 6.0%4.0%- 5.0%3.0%- 4.0% Significantly Exceeds Expectations 6.5%- 8.0%5.0%- 6.5%4.0%- 5.0%

17. Copyright 2008 - SPG 17 Operating Ratios Total staff compensation (exempt & non-exempt FTEs): Total revenue Staff size (FTEs): Total revenue Employee benefits costs: Total revenue Employee benefits costs: Total staff compensation

18. Copyright 2008 - SPG 18 Benchmarking Benefits Sources of Data: 1.The American Society of Association Executives Compensation and Benefits Study 2.PRM Consulting Management Compensation Report for Not-for-Profit Organizations 3.Cordom Associates Biennial Benefit Survey of Nonprofit Organizations

19. Copyright 2008 - SPG 19 Benchmarking Benefits Benefit Description Orgs with 21-50 Emps Your Org Your Org vs Market Avg. % healthcare premium paid by employer 80%100%+ Avg. unmatched employer contribution to 401(k) 7%0%_ Long-term care 9%Yes+ Health Club Membership 15%No= Flexible Work Arrangements 50%Yes=

20. Copyright 2008 - SPG 20 Total Compensation Statements BenefitEmployer CostEmployee Cost Medical/Dental$4,565$910 Disability/Life$1,245___ 401(k) Match$8,194___ Salary/Bonus$65,654 TOTAL COMP$79,658

21. Copyright 2008 - SPG 21 Contact Information Chris Greathouse Strategic Performance Group 8000 Towers Crescent Drive, Suite 300 Vienna, VA 22182 703-847-3656 – Main phone number 703-736-0340 – Direct phone number cgreathouse@strategicperformance.net www.strategicperformance.net