A SERIES OF ARTICLES FRoM THE 2011 EMEA CoMPENSATIoN ...

THE VALUE OF RICH ANALYSIS
For a professional services firm trying to temper increasing turnover amongst high performers, statistical analysis
provided some important insights.
Examination of the drivers of pay revealed significant value in advancement (that is, the pay increase associated with
a promotion) as well as significant value associated with an employee’s performance. But those apparent alignments
masked a significant concern, revealed when a more holistic examination of workforce dynamics was undertaken.
An analysis of turnover showed that the organisation was more at risk of losing not only its highest performers, but
also those who received higher pay increases and long-term incentive awards. Increasing apparent randomness in the
allocation of ratings, under a fixed distribution, was the culprit, as supervisors sought to distribute a limited number
of high ratings across their critical employees over time; employees chose to leave after receiving high ratings and/or
high payouts that were unlikely to be achieved in the next year.
The turnover analysis did, however, reinforce the effectiveness of the career trajectory – that is, through the impact on
retention of both base pay growth and promotions.
The organisation sought to more thoroughly communicate and leverage the value of career and to improve the validity
and implementation of its performance management system.
COMPARISON TO THE FRENCH MARKET
A comparison between pay norms in France and
patterns at the OECD revealed some interesting
differences that pointed to priorities for change.
First, though those who are changing roles are
generally less well-paid relative to their new peers,
the difference in pay at the OECD for those making
such changes was reflective of a more modest pace of
pay progression than what is generally seen in other
French organisations. Career incentives at the OECD,
and the related ability to engage employees through
those incentives to commit to the organisation
and excel, appeared to be relatively weak. Second,
the impact of above-average performance on pay
was weaker than what was seen elsewhere; the
value proposition to high performers needed to be
examined.
RESULTS OF DEEPER ANALYSIS
The organisation employs broadly two types of
labour: “A grade” specialist staff – policy analysts and
economists, who are recruited internationally – and “B
grade” support staff. The very distinct nature of these
groups means that there is scarcely any progression
from B- to A-grade roles. Few people move forward and
learn “the trade” within the OECD, and few, therefore,
really understand the different parts of the organisation
and how they can be brought together effectively to
meet member countries’ changing priorities.
The organisation has traditionally hired specialists, not
developed them and in fact expected the majority of
them to leave after fixed, short-duration assignments.
There had been very little movement between
directorates (OECD’s departments) because of the
specialist nature of the jobs.
A deeper dive into the drivers of turnover (what
employees value and what engages them; see
figure on next page) and of promotion (what drives
employees to succeed), using statistical analysis,
yielded even more interesting results. Despite the
lack of frequency, those who did change directorates
were 85% less likely to leave than those who did
not – making this the very largest driver of retention,
even relative to financial rewards and withindirectorate
promotions. Such changes were also
associated with a 137% increase in the probability
of advancement. Those who were learning broad
skills within the organisation were engaged by the
opportunities and were highly successful. Expanding
such developmental opportunities seemed to be a way
to improve the value proposition for high performers
and, at the same time, meet the OECD’s need to more
fluidly meld its different areas of expertise to meet
changing client demands, by creating more broadly
skilled talent.
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