This is an excerpt from our new ebook “Comp 101: A Beginner’s Guide to Compensation Management.” Download the full guide here.
By now, it’s well-accepted that a comprehensive, up-to-date compensation plan is a must for successful business. A tight talent market means organizations are focusing more than ever on strategies to retain and hire top employees, compensation being a big one. Unfortunately, putting together a strong compensation plan is no easy task. It requires in-depth thought, cross-team collaboration and real effort.
Not to worry; we’re here to help. In our new ebook, “Compensation 101: A Beginner’s Guide to Compensation Management”, you’ll find all the info you need — including both the fundamentals as well as step-by-step action items — to build a solid compensation plan, and to manage compensation successfully.
Today, we’re covering the first step of the process: setting your compensation philosophy.
First, some basics:
The 5 Elements of a Comp Plan
Top-performing companies have up-to-date compensation plans that support their business objectives and ensure their long-term success. As an HR leader at your organization, you’ll want to efficiently lead your company through developing your compensation plan.
A strong comp plan consists of 5 elements:
We’ll work through each of these in the coming blogs.
Developing Your Comp Philosophy
A compensation philosophy answers the question, “What are we hoping to accomplish with our compensation dollars?” Decide how competitive your organization wants to be (e.g., exceed the market, meet the market or maybe even fall shy of the market). Consider your organizational profile — are you a small start-up, a medium-sized, growing company or a large, more established entity? Engaging your leadership in defining your philosophy will help align the group around your overall compensation intentions.
A comp philosophy answers the question, “What are we hoping to accomplish with our comp dollars?”
Stay tuned for the next step in the process: deciding on your comp strategy. For all the steps and takeaways, grab your copy of the full Comp 101 guide today!
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