Laying the Foundation for Your Compensation Strategy
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The document outlines the importance of establishing a formal compensation strategy for organizations, emphasizing that compensation is a significant business cost and crucial for attracting and retaining talent. It provides a step-by-step approach for developing and implementing the strategy, including gaining management support, involving key stakeholders, and creating a communication plan. Payscale, as a market leader in compensation data, offers tools and resources to assist organizations in managing their compensation effectively.
Laying the Foundation for Your Compensation Strategy
- 1. Laying the Foundation for your Compensation Strategy Stacey Carroll, SPHR, CCP Director of Professional Services & Education PayScale, Inc.
- 2. PayScale is a market leader in global online compensation data. With the world's largest database of individual employee compensation profiles, PayScale provides an immediate and precise snapshot of the job market. 7,000 Positions. Our patent-pending, real-time profiling system indexes custom employee attributes (such as industry-specific certifications) and 50 Major Industries. specific job titles for every industry. 11 Countries. Our secure, on-demand business solutions, PayScale MarketRate and PayScale Insight, provide employers with accurate, reliable compensation detail never before available.
- 3. Have you ever . . . . Had an employee come to you with a ransom job offer from down the street? Had a hiring manager who insists on paying a new hire $10,000 above the market rate because “they must have this individual”? Worried about the equity among your employee’s when it comes to compensation?
- 4. The solution . . . Create a formal compensation program
- 5. Why should you have a formal compensation program? • Good business sense • Compensation is one of your largest single costs of doing business • Attract, retain and engage the talent you already have within your organization • Supports the desired mission, strategy and culture of the organization. • Can ensure equity and fairness among employees • Improves employee morale • Can reduce risk to the organization
- 6. How can you gain support from management? • Focus on the business case • Know what matters • Use data to support your case • Make it relevant • Provide an example • Identify risk to the organization • Be prepared and well-rehearsed with your recommendation • Have an outline of the plan • Be prepared with resource requests (financial, HR, etc)
- 7. Where do I start? • Get the right people involved • Buy-in from ALL key decision makers • Have a project champion • Identify the right decision-making process • Consider employee involvement • Agree on goals • Set a project deadline • Create a communication strategy
- 8. Communication Strategy • Communicate about the project • What is the organization doing and why • What is the process • Choose the right messenger • Be transparent about the process • Be realistic about the goal – no promises should be made • Don’t give employees the opportunity to assume what the outcome will be • Let employees know what to expect in terms of additional communication regarding the project.
- 9. Creating the Compensation Strategy Start with: Then: Where is the Where Do Organization Now? We Want To Be? • Growth cycle • Importance of attraction, motivation • Demographics and retention • Culture/management style • Market competitiveness vs. internal equity • Competitors and degree of competitiveness • The right mix of compensation elements • Salary administration and decision making
- 10. Implement the Plan • Benchmark the organization • Perform a gap analysis • Create a proposal(s) for implementation • Decide what to do with anomalies • Get buy-in again • Communicate with employees • Assesses project effectiveness and next steps
- 11. PayScale Delivers Where Other Compensation Providers Fall Short PayScale operates the largest online salary database in the world. We allow organizations to price their jobs according to their industry, location, and the employee skill sets which make their workforce unique. PayScale goes beyond supplying the accurate data you need - we also give you the tools to efficiently manage your compensation projects, and the knowledge to stay up-to-date. Visit our blog: http://blogs.payscale.com/compensation/ Join our Group on LinkedIN: Compensation Today: HR Best Practices Stacey Carroll, M.B.A, SPHR, CCP Director of Professional Services & Education PayScale, Inc. Connect with me on LinkedIN: http://www.linkedin.com/in/hrstacey