– Edward Ilnicki, Compensation Analyst, ATB Financial, Edmonton, AB
When I first told other scholars that I would be returning to ATB Financial for my 2016 summer stretch experience, after a 4 month placement with the company last year, I could tell that a few people were…surprised? I’m not sure what word to use. Here are some snapshots of the follow-up conversations:
“Isn’t that what you did last year?”
“Oh that’ll be…interesting.”
And, my personal favourite – “Well, Ed, you’re in business, isn’t banking what you do anyways? How is that a stretch experience?”
All very good questions, and justified given the circumstances. Some scholars were planning trips to foreign countries, exposing themselves to lines of work that they have not studied or experienced… and I chose to work in the same building, at the same company, with a couple of the same people I worked with last year. So yes, it took a bit of convincing, but I think it was one of the best decisions I have ever made.
So here’s the basics:
I’m currently studying a Finance degree at the Alberta School of Business. Great program, I really enjoy everything I am learning. The team I worked with last summer at ATB, the Business Banking Centre, falls into the broad category of ‘jobs you could definitely use a Finance degree for’, and it was a great job, I learned a lot about small business, customer relationships, sales, and the overall structure of ATB as a company.
Now, as you may or may not know, the requirements for the Stretch Experience were to be pushed outside of your comfort zone and expose yourself to something new. Take a guess at the area of a corporation that Finance grads are the LEAST likely to end up working in…..
Go on, guess!
Was it Human Resources? Then you are right!
Human Resources, which is quickly becoming known as People & Culture (P&C) at many companies, was completely foreign to me. Working in P&C never would have crossed my mind 18 months ago, but after being exposed to some of the culture initiatives going on at ATB Financial, I was intrigued. When the opportunity came up to work in a team that focused on the motivation of employees, I was extremely excited to apply what I have learned through my academic and athletic endeavours to the business world.
The team I’m working on this summer is called Compensation. Compensation for a team member at ATB Financial is made up of their base salary, their short term incentive program, and their long term incentive program. Our team is responsible for the overall compensation philosophy, which is aimed to attract, motivate, and retain top talent as ATB team members. There are a lot of small differences but I’m going to share some of the interesting concepts I have learned, and hopefully they will be useful for some of you, too.
Firstly, there is your compa-ratio. A compa-ratio is the annual salary of an employee versus the median salary that a company has determined for that role. So, so if you had an annual salary of $75,000, and the company has found a market average (or midpoint, another cool Compensation term) of $85,000, your compa-ratio would be 75000/85000 or 0.88. This number is important because a lot of companies will only be willing to pay within a certain range for a roles (0.80-1.20). The compa-ratio is a good indicator of your growth opportunities within a role, if you start on the lower end of the ratio, then you have the option to receive larger raises then someone who starts on the upper end of the ratio. So, the next time you’re offered a job and you get blown away by the starting salary, ask what the compa-ratio is and compare it to what you could make somewhere else in a similar position. It may be that you are earning a lot of money right away, but your growth opportunities could be limited compared to another company that offers less salary up-front, but gives you more room to grow in terms of a compa-ratio.
Next is the Short Term Incentive Plan, also known as the annual bonus. There is so much work that goes into putting these things together. Different roles have different kinds of targets for the year, a sales role is trying to bring in new clients, while a role in Strategy & Operations is trying to boost ATB’s overall performance, and a role in P&C is aimed at turning ATB into ‘THE Place to Work‘, measured by ATB’s annual employee engagement scores. What I have found the most interesting is the amount of effort that goes into building these unique scorecards to measure the success of each employee. There are aspects of behavioural psychology (‘no metric can be less than 15% of the overall payout because it will not be considered as important by the team member’), team-building factors (‘we have removed this metric because it promoted a team member to focus on a specific group of clients instead of referring them to other team members’), and overall strategic objectives, such as roles that have been created to bring in clients from a specific demographic (Indigenous Albertans, entrepreneurs, to name a few). I haven’t had the chance to work on the design of any plans, but learning about how they are built, the number of people involved in the process, and the overall expectation to identify the 3-4 metrics that best measure an employee’s success, as well as motivate them to be the best at their job, has been fascinating for me this summer.
The last piece, the Long Term Incentive Plan (LTIP), is what I have been working with the most this summer. For a lot of companies, LTIP equals profit-sharing, offering shares in the company to employees in exchange for their long term commitment to the company. This system is supposed to motivate employees to work hard to ensure that the company grows in overall value, increasing the value of their shares. Since ATB Financial is a government entity, and even though the company operates almost entirely independently from the Alberta Government, ATB cannot offer shares to it’s employees, or to anyone else for that matter. Instead, ATB offers ‘LTIP grants‘ to it’s most valued team members. These grants appreciate over the next 3 years based on ATB’s financial performance, and then these amounts are paid out to those team members. Team members don’t receive those payouts if they leave the company before that 3 year period has ended (besides retiring). That is how ATB’s LTIP grants act as a retention tool and substitute for shares in the company.
One of my major projects this summer has been to examine innovative practices for the LTIP system and recommend some ideas for improving the current system. The grants for mid-level management (non-executives), are discretionary, meaning that a managing director is not guaranteed to be offered a grant each year, based on individual or team performance. The decisions on who does receive grants comes from the executives within each department, as it aligns with the budgeted amount they are allotted each year. One of my theories suggest that the grants should be based on the nominations from lower level team members. Perhaps a team can write a proposal to the executives about the exceptional work that their director has done this year and they should be recognized with a grant amount. This, and other ideas, have been part of on-going research for me over the past 3 months. I’d love to share the full results but they won’t be ready for another week or so, STAY TUNED!
I want to take a second to recognize the challenges and learning experiences I have faced outside of my day to day work within the compensation team. Two big ones from a personnel standpoint are that I am the only male and the only office-based team member on the compensation team. We are a team of 5, 4 mothers who predominantly work from their homes, and a 21 year-old football player who couldn’t spell compensation at the beginning of the summer. Adapting to video calls instead of meetings, emails from my manager at all hours of the day (and night) as she manages her 2 kids, and balancing a workload with minimal supervision has been a stretch in itself. But, I have learned so much about working with team members from a different background and how much that benefits both my growth and the success of the team. During the school year we learned that a team with a diverse background (culture, age, gender, etc.) creates better ideas because your counterparts are less likely to agree with your suggestions, therefore you need to provide better evidence and information to get acceptance at a team level. I see this in action every single day at work. P&C is over 70% female at ATB, and I have the chance to interact with some of the brightest women in the company each and every day. That is something I never would have expected to learn this summer. Coming from an athletics background that is almost 100% male, I often ask myself, “what would Coach Rick think about this?”, or Jim, Bob, etc. But more and more I find myself asking “How would Lisa approach this?”, “What would Naomi think?”, “Would Maureen do this differently?”. That has been one of my favourite experiences so far.
I’ve been lucky, really lucky, to have some great experiences during this stretch experience. With one month to go at ATB, I can’t wait to see what will happen next. Over the last 2 summers I have seen projects develop, roles change, people move on and come on board. I’ve seen downtown Edmonton mold itself into a great place to hangout, eat, explore, dance, sing, and create. I hope that everyone gets the same opportunity to see themselves grow and learn something about themselves that they never expected to see, like my fascination with compensation.
(Here is the ATB/Apple Pay Launch Video: “Apple Pay is Here, and Here is Home.”)