Compensation strategy is a critical component of your overall HR strategy. It's important to have one that works for both your organization as well as current and future employees. If you are lacking a formal comp strategy or are in the midst of defining one, here are the basics of how to create one that is effective.
What it is. A compensation strategy is the well-thought-out plan of how to compensate new and future employees, both now and as your company grows. And it shows the proof that you can actually deliver on such promises. Any compensation strategy should be supported by a compensation management software, which allows you to implement the strategy efficiently and effectively. Here at AltaFlux, we highly recommend the SuccessFactors Compensation module, and would be happy to share our expertise on how to leverage this tool.
Who it’s for. A comp strategy is for organizations with valued employees, and those looking to attract, retain and reward top talent. (That should pretty much include everyone!) Studies have shown that fairly compensated employees are more productive, more motivated, and less likely to leave their post for an opening with a competitor. Along those same lines, job seekers or those looking for career advancement opportunities are attracted to companies that openly value their employees, compensate them accordingly, and offer incentive to stay and grow.
Why you need it. It's essential for stability. Without the proper numbers and planning in place, there’s no way to guarantee that the compensation model you’ve built can be delivered to employees. And without proof of a working system, you won’t be able to afford the transparency—open communication about compensation, benefits, and professional development opportunities—that today’s workforce craves.
Where to start. Developing an effective comp strategy begins by evaluating how your organization wants to operate moving forward. Start by identifying the ways your organization plans to grow in the coming years, and get answers to unknowns, like your market-rate of pay compared to competitors, whether or not you need multiple pay structures for different departments or divisions, what trending benefits can offset any potential salary shortages, and additional incentives to include in your plan.
How to make it effective. Great processes begin with passionate people. Identify the right internal and external partners to help execute your compensation strategy and coordinating compensation management system, like our experts here at AltaFlux. Finding the right team to guide you through strategy and implementation can make all the difference.
Any questions? We’re here to help. Wishing you all the best as you move forward with your compensation strategy!
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AltaFlux understands what you and your organization need to excel, and can deliver rapid innovation to unleash your full workforce potential. Together, we can empower your business by streamlining, transforming, and optimizing your key HCM and talent processes with industry-leading SAP SuccessFactors technology—enabling you to adapt at the speed of change.
AltaFlux Corporation is a global HCM cloud consulting partner based in Troy, Michigan. We empower organizations by streamlining, transforming, and optimizing key human capital management (HCM) processes with industry-leading HCM cloud solutions like SAP SuccessFactors, Benefitfocus, WorkForce Software and Dell Boomi.