Road to riches: compensation management can put you on the path to success

HR Magazine, June, 2004 by Kathryn Tyler

For some, the term "compensation specialist" may spark less-than-exciting visions of crunching numbers on a calculator and sorting spreadsheets on your desktop, but those who wear the title say their work is a cutting-edge adventure.

"People in compensation are passionate about it," says Bonnie Kabin, a certified compensation professional (CCP). "Compensation is fun and exciting. 'How do I motivate this employee population? How do I make every person feel good about themselves and affirm their value?' We feel we make a difference. I could never see myself doing anything else--ever," says Kabin, director of professional development and certification at WorldatWork, formerly the American Compensation Association, a nonprofit professional association in Scottsdale, Ariz.

"It's the hottest area of HR," says Sharon K. Koss, SPHR, CCP, president of Koss Management Consulting in Seattle. "It's a good area for HR generalists to specialize in. It really helps their careers."

A compensation specialist--also called a remuneration professional--calculates employee compensation, maintains compensation databases, develops job descriptions, benchmarks compensation externally and coordinates annual performance reviews. He or she may also deal with employee benefits.

As compensation specialists advance in their careers, the tasks become more strategic and less administrative. Senior compensation specialists create and manage compensation plans to directly link performance and company goals with pay, including sales incentive pay plans and executive compensation.

Specializing in compensation can be a challenging--and rewarding--career choice for HR professionals.

"I was inspired to go into the HR field while growing up watching my father's career as an HR consultant. I grew to love HR and compensation," says Don Hubbartt, manager of executive compensation for Kohl's Department Stores, based in Menomonee Falls, Wis. "Compensation is a great specialty of HR. My favorite part is that your job affords you the opportunity to learn the business and what drives it," says Hubbartt, who has completed four of the nine courses required for the CCP designation.

"The overall responsibility of any compensation specialist is to manage the compensation and rewards programs," Hubbartt says. "A great compensation program will attract the right people, reward the right behaviors and retain valued employees. Additionally, the compensation professional is charged with making sure the compensation costs are aligned with the business culture, philosophy and objectives."

That strategic role is important. "They [compensation professionals] spend a lot of time benchmarking and keeping job documentation up-to-date, strategizing how to tie pay to performance," says Robert Greene, SPHR, CCP. Greene, CEO of Reward Systems Inc., a consulting firm in Greenview, Ill., has also earned the global remuneration professional (GRP) designation.

If you think compensation is the field for you, you'll need to consider whether:

* The potential rewards mesh with your career goals.

* You have the right mix of skills and abilities.

* You should pursue certification.

Even if you don't plan to specialize, the training and skills required for compensation management can benefit the savvy HR generalist.

Good Career Move?

Becoming a compensation specialist offers some impressive career rewards, including healthy job prospects and the potential for higher earnings.

"The field of compensation is specialized enough that it has weathered the challenging job market well," says Kabin.

Hubbartt agrees: "The job market for compensation professionals is fueled by an ever-increasing pressure on companies to comply with corporate governance regulations and a continuing need to account for payroll dollars spent."

On average, compensation professionals earn higher salaries than HR generalists or any other HR specialty, according to the 2003 Human Resource Management Compensation Survey conducted by Mercer Human Resource Consulting. Compensation managers receive an annual median salary of $97,800, whereas HR managers receive $91,400. (See the online version of this article at www.shrm.org/hrmagazine for more information about the survey.)

There's yet another reason to consider this specialty: Due to the nature of their work, compensation specialists spend more time with senior management than other mid-level HR professionals, which can translate into more prestige and visibility.

"The biggest benefit is your work is directly linked to the performance of the business. You are exposed to the highest levels of management. You meet interesting people and get great exposure," says Hubbartt.

A compensation specialist's "contribution is respected and listened to by senior executives," adds John S. Maxwell, CCP, GRP.

While such perks may be compelling, keep in mind that choosing the compensation specialty might preclude working at smaller organizations.

"A basic rule is you won't see a dedicated 'compensation person' until you hit the 1,000-plus employee-sized organization, and so, in smaller firms, the responsibility would fall into the role of a generalized HR person, the finance department or a general manager. At larger organizations, such as Kohl's, we have 12 compensation professionals," Hubbartt adds.