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Compensation Strategy Video

Consider, that: Compensation Strategy

It aligns all of your compensation resources to your business goals, helps you decide where you want to compete, how competitive you need to be and what you choose to reward. A compensation strategy forms the backbone of your compensation plan.

With a solid strategy in place, your organization can quickly make sound decisions about compensation. What you pay, how you pay, and why Stratey pay the way you do affect your ability to retain and attract top talent. With all of this said, here are five steps you can take to develop a Compensation Strategy strategy so you can be more intentional with your comp spend.

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Your culture is who you are as an organization and consists of the values and behaviors that collectively determine how and why your organization operates the way it does. All these factors taken together should inform your compensation strategy. Circling back to your company culture, Stratety down on what kind of behavior you want to reward with pay increases. Are you focused on performance to the point where top performers get bigger raises? Performance Compensation Strategy the number one reason for giving merit pay increases, according to our Compensation Compensation Strategy Practices Report. Or is loyalty a big part of who you are and thus rewarding tenure is important? Or do you plan to reward some combination of these things? More and more, we observe that organizations are starting to pay employees based on the relevant skills they bring to their roles rather than traditional factors such as tenure, education pedigreeor years of experience in an industry.

This practice is becoming more common Compensation Strategy tech, healthcare, manufacturing and other sectors that are undergoing rapid changes. For these industries, retention and hiring see more right people are often top concerns. These employers recognize that workers with certain skills are in high demand, and they need to pay a premium to attract and retain these employees. Additionallythey see that using skills SStrategy determine pay paves the way for better conversations with their employees. As you start to craft your compensation strategy, be sure to take the time to understand the skills you need in each department and each role, and determine which Compensztion are mission-critical to your organization.

Then, make sure everyone involved in making pay decisions knows what you intend to reward. The best compensation strategy is the one that rewards what your organization values. Compensation Strategy often hear from PayScale customers that they only want to compare themselves to similarly sized organizations in their own industry when pricing their jobs. However, the competitive landscape for talent is typically much broader than that. For one thing, many jobs exist across all kinds link industries. Likewise, there are often companies whose entry into a new labor market has a ripple effect on pay up and Compensation Strategy the size spectrum think Amazon and their network of distribution centers across the country.

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The result of that conversation should be a decision on the salary data you will use for benchmarking: industry, size, revenue and location s as well as how competition in the market impacts your compensation strategy. The other key component of your comp strategy is how competitively you plan to pay—the percentile in the market where you intend to pay proficient employees—and if, for strategic reasons, that should differ by job function, level, location, or some other factor. The CBPR found that 54 percent of top-performing organizations target a higher market percentile for more Compensation Strategy jobs i.

Crunch the numbers here and examine a few different scenarios to ensure the affordability of your plan. And then consider: even if you can afford Compensation Strategy target higher in the market for base pay, is that a smart decision for your organization right now? Where does variable pay fit? A full 79 percent of top-performing companies and 70 percent of all organizations surveyed in the CBPR incorporate variable pay into their comp strategies. With an attractive Compensation Strategy of base and variable pay, depending on your market, you may not need to target a higher percentile. Here are some tools and guides click at this page may be helpful:.

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What do you need from your compensation strategy? We want to hear from you. Tell us your thoughts in the comments. I wish I had considered this more when we first began.]