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WorldatWork Total Rewards Conference and Exhibition

May 8, 2007
Related Topics: Executive Compensation, Diversity, Organizational Development, Featured Article, Compensation, Benefits

Event: WorldatWork Total Rewards Conference and Exhibition
May 6-9, 2007

Where: Walt Disney World Swan & Dolphin, Orlando, Florida

What: More than 1,500 compensation, benefits and HR managers get together to share best practices and learn the latest strategies around health care and retirement benefits, compensation and total rewards.

Conference info: For information, go

Day 3—Tuesday, May 8, 2007

HR’s opportunity to shine: A number of speakers had some words of advice for HR managers still complaining that they don’t know how to get a seat at the table.

In their morning presentation, "Innovative Executive Compensation Practices," Peter Chingos, senior executive compensation consultant at Mercer Human Resource Consulting, and David Cross, a consultant with Fidelity Investments, discussed how it was up to HR to be on top of the executive compensation process.

"HR needs to own this," Chingos said, adding that compensation committees want to have ongoing discussions with HR about what they should do regarding executive pay. "Compensation committees do not want you walking in and just saying, ‘Vote on this plan.’ They want to work with HR throughout the process."

If compensation committees don’t feel HR is doing a good job with helping them design the executive compensation, they will hire their own advisors, Chingos warned in an interview following his presentation.

HR’s role in compensation issues becomes even more important as shareholder activists get involved in critiquing CEO pay, Chingos said.

While 10 years ago a company would just come up with its executive compensation and hope shareholders approved it, today it’s important that companies run the numbers by their largest shareholders, Chingos said.

"They should reach out to their top 10 shareholders and give them an update of what the company is thinking regarding executive compensation," he said. "And it’s HR that should be making those presentations."

In a subsequent presentation, Mark Royal, senior consultant at Hay Group, and colleague Melvyn Stark, a vice president at Hay, discussed how one of the key differentiators between Fortune magazine’s Most Admired Companies and the rest of corporate America is the organizations’ focus on human capital management.

Eighty-four percent of the boards of the Most Admired Companies are very involved in human capital management, according to Hay’s research. Ninety percent of these organizations have a succession plan in place if the CEO suddenly is gone. Eighty-five percent have a good long-term CEO succession plan.

"This is an opportunity for HR executives and teams to play a different role," Stark said. "It’s an opportunity for them to ask the board questions about executive planning, HR strategy and metrics."

However, it’s not going to be easy for HR to get the board’s attention, Stark warned. These individuals are busy, so HR needs to get on their agenda early on, he says.

"Some of you are going to have an uphill battle, but we think it’s the right thing to do," he said.

--Jessica Marquez

Day 2—Monday, May 7, 2007

One company’s loss is another man’s fortune: On the face of it, Scott Adams’ keynote speech seemed just to be a very upbeat way to get attendees laughing as the conference kicked off. But before the creator of the beloved workplace cartoon Dilbert shared stories of comic strips that got him into hot water with his old corporate bosses, he had a lesson for all HR managers.

After being rejected from the "Famous Art School for Young People" at the age of 12, Adams described how he went on to get good grades, become an economics major in college and go to work for a company "that sucks the lifeblood out of you."

After moving his way up at that bank, Adams was passed over for a promotion because, he was told, the company needed to create a more diverse management team. Adams tried again, however, joining a telephone company, where he again found himself up for a promotion and again his boss passed him over because of diversity efforts at the company.

"You would have thought that this was the worst day of my life," he said. "But the day you realize that your efforts and your rewards are not related, it really frees up your schedule."

Suddenly Adams found more time to devote to his hobbies, which in the end resulted in his becoming the creator a comic that today appears in 2,000 newspapers and 65 countries.

The win for Adams, however, was a loss for the company—and something that every HR manager should remember: Reward for performance is the key to retaining talent. In this case, though, millions of Dilbert’s fans are glad that at least one phone company didn’t get that.

The realities behind the aging-workforce scare: A couple Monday sessions were focused on how companies can go about addressing the pending worker shortage as baby boomers retire.

Employers and HR consultants have been talking about this issue for the past 10 years, and it’s still unclear whether it will be the crisis that many predict, but speakers agreed it’s worth it for HR to take a look at their own workforces to determine if it will be a problem.

The majority of employees at Marathon Oil are in their mid 40s and the voluntary retirement age is 50, so it’s clearly an issue there, Marathon organizational development manager John Farrell said in his presentation, "Understanding and Preparing for the Exodus of Mature Workers."

To address the issue, Marathon is offering employees who plan to retire the option of working flexible schedules. But many companies aren’t worried about retaining these workers; they just want to know how to transfer their knowledge to younger employees, said Jennifer Tomko, an HR generalist at the University of Michigan.

To help with the knowledge transfer to younger employees, Marathon Oil is developing a mentoring program to teach older workers how to mentor, Farrell said.

"Often these employees don’t know how to teach," he said.

Companies need to think about such cultural issues when figuring out how to facilitate the knowledge transfer to younger workers, said Donna Klein, president and CEO of Corporate Voices for Working Families, a Washington-based nonprofit.

PepsiCo realized this recently and started a pilot program in which its corporate HR managers will meet with executives and ask them about their retirement plans.

"We realized we needed to establish a dialogue around retirement," Bruce Monte, director of retirement plans at PepsiCo, said during his presentation, "Mitigating the Risk of a Senior Leadership Talent Drain."

"It’s not something people need to feel closeted about," he said.

—Jessica Marquez
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