This is an excerpt from our ebook collaboration with BambooHR “Getting Smart About Compensation.” Download the full guide here.
As the HR leader at your organization, you’re an integral player in your company’s success. At a time when the gap between your competitors and you is smaller than ever, people are realizing that what sets companies apart is less about what they do and more about who they are.
Today, long-term success is about who you are as a company: your culture; your mission; your vision; your values; your beliefs; how you recruit, enable and inspire top talent. Leading organizations have realized they need to increase their investment and focus on people and culture in order to succeed.
And when it comes to your people, comp is culture.
Compensation = Culture
Culture is a story. It’s a shared narrative we create together about our company. It’s a story we tell our employees, and it’s a story that employees tell each other about where they work. Thinking about culture this way, as a story, can help influence the way we manage and invest in it.
Compensation plays a massive role in that story. It’s the story we tell our employees about how we perceive their value.
Few things impact a person more than their perception of their own value and their perception of how others value them. With their employer, this is particularly true, given there’s a monetary figure attached to that value. Because of this, compensation can be considered the keystone of culture.
None of the stories we create about what we value as a company are as important as the story we tell each employee about how we value them. You can get all the other things about culture right, but if you get comp wrong, nothing else will matter. That’s why it’s crucial to be strategic about compensation.
Company culture is the story that we tell our employees about how we perceive their value.
Questions to Ask Before Creating/Revising Your Comp Plan
Here are the questions to answer in preparation for crafting a compensation strategy:
- What is your market? This is broader than just your geographic location. What is your industry? How large are your competitors? Where do your employees come from, and where do they go when they leave?
- What are your goals? What are the values you want to communicate to your organization, from executive leadership on down?
- How competitive do you need to be? This is determined largely by combining the answers you asked yourself about your market and goals.
- What should you reward? What types of rewards — financial and otherwise — would your employees appreciate most?
- Is your current strategy working? No need to toss the baby out with the bathwater; perhaps parts of your current strategy are working. If so, try to integrate them into your new strategy.
Want the step-by-step on creating and maintaining a modern compensation plan? Grab your copy of “Getting Smart About Compensation” today!
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What’s your biggest compensation planning challenge? We want to hear from you. Share your questions in the comments.