Compensation can be complicated. Companies who lack compensation processes often don’t have resources to effectively manage the complexity of compensation initiatives. Planning, creating, and maintaining a compensation strategy requires a mixture of art, science, and a sharp eye for detail.
Not having a clear compensation strategy impacts your company in more ways than unfair pay and grumbling employees on Glassdoor.com. Establishing salary ranges for all positions in your organization goes hand in hand with successful company growth and revenue generation.
Every company is unique and nuanced in their own right so there isn’t a “one size fits all” compensation strategy. But, the levers you can maneuver and choose from are common. For example, if you decide to lead the market in salaries, consider removing bonus (they don’t drive behavior most of the time anyway) and consistently offering refresh equity grants for top talent. It’s important to create a strategy that is competitive and effective, while customizing it to fit your company’s needs and budget.
The CultivatePeople team are compensation experts who have helped over 200 companies in the past few years develop their compensation strategies and effectively eliminate key pain points companies face. Clients like MasterClass, Peloton, and InVision have worked with CultivatePeople to establish career paths for their employees with competitive salary ranges. These have directly impacted employee decisions to stay and grow within the companies, and leaders are able to make informed pay decisions based on a clear compensation philosophy and reliable market data.
Here are 4 steps to creating a successful compensation strategy:
1. Re-evaluate jobs by job leveling
2. Perform a market compensation analysis
3. Develop a compensation philosophy statement
4. Create compensation ranges
Don’t forget to keep compensation education part of your ongoing dialogue with leaders so they are aligned with the company’s compensation strategy.
Initiate and share your annual compensation schedule so they are clear on timing for compensation reviews and promotions.
This foundational structure is used when developing a compensation strategy for our clients, and we tailor it to fit their specific needs. For more information on the services CultivatePeople provides, visit our services page.