10 Comp Best Practices

Your organization continues to transform, and your compensation practices are forced to evolve and change. Remote work has expanded your pool for talent and you’re seeing a workforce unrestricted by geography. DE&I has become critically important and it’s being discussed at the board level. Here are 10 compensation best practices to rethink your compensation strategy. As your organization evolves, you need a plan. Here are 10 compensation best practices to rethink your compensation strategy.

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10 Compensation Best Practices

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Develop and review your compensation philosophy

Your compensation philosophy is a formal statement of the company's position about employee compensation. It explains the "why and how" and creates a framework for consistency.

  • Decide when you are going to review compensation

  • We suggest a minimum of annual or even quarterly reviews of market pay vs. Internal

  • Tie-in to your employment brand

  • Build out your employee value proposition – Compensation, Opportunity, Organization and Leadership

Time of Year:

Beginning of the year

Products & Services:

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Conduct a company-wide job analysis and evaluation

Your company-wide job analysis and job evaluation is a precedent for building your job structure. A job analysis is a process in which you analyze the duties, responsibilities, the knowledge, skills, and experience for the job.

  • This exercise should be yearly across all positions

  • To evaluate jobs, you need to understand and document the roles, responsibilities, skills, licenses or certifications required

  • This process could be done by HR, managers, employees, or outside consultants

  • You want your job descriptions to be competency driven

Time of Year:

Q1, ongoing

Products & Services:

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Determine your Compensation Data Sources

You’ll use a variety of sources to make sure you cover all your jobs in every location. You’ll want at least three individual survey sources or one aggregated source (one that combines data sources for you). Make sure sources are HR or company reported for accuracy. If you use crowdsourced data (free online), this should not be used as your main data source.

You’ll want data sources that:

  • Have data that is well known and relatively stable over time

  • Have job data that is common across employers

  • Have a reasonable proportion of the work force holds a given job

Time of Year:

Q1

Products & Services:

Here are some exclusive data sets we offer:

  • U.S. Benchmark Pro, Benefits USA,
  • Banking and Financial Services, Healthcare,
  • Manufacturing and Distribution,
  • Executive Compensation, Global Benchmark,
  • Global Consumer Goods, Global Retail,
  • Global Technology.
  • See our full list of US and Global Surveys
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Share Your Data with the Community

Share your data with the vendor for the data sources you leverage by participating in surveys.

  • The vendors you pick should have easy ways for you to share your data

  • Make sure they do the matching for you

  • The HRIS file is the beginning, but validating matches is the key to accuracy

Time of Year:

Q2

Products & Services:

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Market Price All Your Jobs

Market pricing a job is the process used to determine the external value of a job. Market pricing with accurate data is the foundation for analyzing and evaluating internal pay practices against existing market rates.

Time of Year:

Q3

Products & Services:

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Build a Good Job Structure

This is the foundation of a good compensation system.

  • Establish salary and/or job ranges

  • Build salary structure or job ranges annually to manage, understand, and administer pay data

Time of Year:

Q3

Products & Services:

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Manage the Compensation Budget

You’re responsible for knowing where your organization and your managers stand each quarter on the compensation budget.

  • Work with hiring managers and departments to understand their jobs and communicate where they stand

  • Whether you provide salary increases once or many times throughout the year, having YTD budget numbers at your fingertips is critical for business success

Time of Year:

Q4

Products & Services:

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Communicate

You should provide your hiring managers with a complete picture of how an employee is paid and how that fits in with the rest of the company (compensation philosophy).

  • Give your employees access to their compensation statements

  • Help employees understand what other roles they can take within the organization

  • Review your pay policies and practices to determine the extent to which they can be made transparent

  • Provide visibility to this information often

Time of Year:

Ongoing

Products & Services:

Here are some exclusive reports we offer:

  • Job Focus, Job Family,
  • Career Progression,
  • Total Compensation Statements,
  • Comp360
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Analyze and Monitor

Monitoring requires reporting and analytics capabilities easily at your fingertips. Ideally you would have your data sources, jobs, job matches, salary structures, and employees all in one solution.

  • You should look at your compensation results at least once a year but have the tools to look at this quarterly

  • Focus on fair pay, which is externally competitive and internally equitable

  • Review quarterly where key performers stand to market in the rest of the job family or company

  • Analyze throughout the year when you hire new people, add new jobs, have turnover, or have a significant company event

  • Pay equity laws will require you to review where employees compare for “similar” jobs

Time of Year:

Ongoing

Products & Services:

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Executive Compensation

Attract and retain talented executives to achieve company objectives (for public or private companies).

  • You should have access to public company executive compensation data from 10,000 companies traded on US exchanges

  • Build appropriate peer groups using robust search parameters

  • Build reports that include all elements of executive and Board compensation

Time of Year:

End of Fiscal Year

Products & Services:

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10 Best Practices for Compensation Management

Download our eBook to consider these 10 best practices when taking on your approach to compensation.

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