2017 Compensation Best Practices

Find out why your compensation strategy has the power
to make or break your business this year.



Executive Summary

We attempt to accomplish multiple purposes with this 2017 Compensation Best Practices Report. We hope that day-to-day compensation practitioners, whether in HR or finance or an operations team, will appreciate the opportunity to gain some insights by comparing their pay practices with respondents to this survey. We also hope to provide insights into the impact of compensation at companies. Increasingly in our work with more than 6,000 customers who rely on our data, software, and analytics to make pay decisions for more than 13 million employees, we hear from C-level executives who think about compensation somewhat differently than their compensation teams do. The CXOs, including Chief People Officers, are beginning to realize that the talent game is about reputation — your ‘Pay Brand’ — and that how you pay, what you value and how you communicate that to your employees is integral to how engaged your employees are.

Is your compensation strategy driving the business forward?

of orgs reported an average increase of more than 5 percent

of orgs say comp is becoming more important to their executives

of orgs are planning to change their comp strategy to accommodate millennials

of orgs pay differently for competitive jobs

of orgs are aiming for pay transparency in 2017, sharing more about philosophy, practices, etc.

of companies reference market data more frequently than annually

The Corporate Chasm: Inside the Disconnect Between Employees and Employers

When it comes to key employee engagement issues, there is a gulf between how employers think employees feel, and how employees actually feel. PayScale has coined this phenomenon “The Corporate Chasm.” Peruse the chart to learn more about the polarity infusing today’s modern workplace.


Top-Performing Companies Believe in Proactive Pay

When it comes to a compensation plan, top-performing companies know there’s no such thing as “done.” Compensation is a reflection of the working world — vibrant, bustling, and ever-changing.

As such top-performing companies are constantly tweaking and recalibrating their comp strategy, whether it’s to accommodate a new generation, or keep commensurate with the market. They also realize that compensation and culture are linked — a little over a third have changed pay and updated their compensation best practices as a result of employee engagement survey feedback.


How Companies Reward High-Performing Employees

What’s new with the modern pay mix? Companies of all sizes are still most likely to give a bigger base pay increase to reward high-performing employees. Enterprise companies are the most likely to reward their employees with a traditional raise. Large companies were most likely to use informal bonuses and incentives. Surprisingly, small companies were the least likely to do non-financial awards like employee of the month.


CBPR: Canada Edition

The annual CBPR you know and love now has an all-Canada edition! While the full report is in its eighth year, this is the first year we’re able to detail Canadian-specific compensation practices — and we’re excited to share with our Canadian readers what other companies in their country are doing when it comes to setting pay for their employees.

Survey Methodology

The 2017 Compensation Best Practices Survey gathered responses during November and December 2016.

Top-Performing Companies

Top-Performing Companies are defined as those who are number one in their industry and met or exceeded their revenue goals in 2016. Eighteen percent of respondents were Top-Performing Companies.


There were 7,700 respondents to the Compensation Best Practices survey that spanned the globe, including 5,136 respondents in the United States and 641 respondents in Canada.

Company Size

This year we defined four organization sizes for comparison as follows: Small (1-99 employees), Mid (100 – 749 employees), Large (750- 4,999 employees), and Enterprise (5,000 or more employees). Although the survey includes many small- and mid-sized organizations, there were more than 1,500 Large and Enterprise organizations included.

Industry and Organization Type

The top four industries responding to the Compensation Best Practices survey were Manufacturing, Technology, Healthcare, and Nonprofits.

In terms of organization type, most respondents were either a public or private company (77 percent), but there were many responses from schools, hospitals, and governments as well.

Job Level

Most respondents self-identified at the Manager level (37 percent). Twenty-two percent were Directors, 21 percent Individual Contributors, and 20 percent were at the Vice president or C-level.