Footnotes on Compensation Trends

March 21, 2005 · by DesignIntelligence

From the 2005 Architecture Compensation Survey.

In the United States the increases in base salaries from 2004 to 2005 were moderate (typically 2.5 to 3.5 percent), but we find in many "best of class" firms significantly higher incentive compensation. This incentive compensation ranges from relatively small amounts to several times base salary for equity partners.

All best practices now include retirement plans such as 401 (k) and SEP IRA. Typical retirement plan contribution ranges from 3 to 6 percent of base salary. Profit sharing is now included in all best practices.

All firms include health insurance.

The accumulated value of investments in staff training, competence, and attitude, referred to as human capital, is becoming increasingly important to best of class firms.

The value of what the individual employee can produce is being measured to create a new meritocracy concept as best practice. Firms report a priority on transforming an individual's value into collective competence and more enduring organizational capital.

Knowledge management (KM) is a growing concept where best practices bring together the management of technology, information, processes and people.

Best practices strive to enable frequent knowledge interaction into a "learning organization." Tacit knowledge (highly personal talent, including design talent, and know-how that is hard to formalize and communicate) is being increasingly recognized and compensated for in best practices.

There is a guru class or elite star class at the very highest levels of compensation in firms of all sizes.

Best practices are not satisfied with being average. They are striving for continuous improvements-including compensating their talent at above average levels.

Professional practices that have a human focus including 360-degree perspectives that are listened to at the policy level are becoming the increasingly strategic and competitive best practices.

All compensation survey research and summary information is provided by Greenway Group Copyright 2005.

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