Companies that lack compensation processes often don’t have the resources to manage the complexity of compensation initiatives effectively. Planning, creating, and maintaining a compensation strategy requires art, science, and a sharp eye for detail.
Not having a clear compensation strategy impacts your company more 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 its 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 bonuses (they don’t drive behavior most of the time) and consistently offering refresh equity grants for top talent. It’s essential to create a competitive and effective strategy while customizing it to fit your company’s needs and budget.
The Kamsa team are compensation experts who have helped over 500 companies develop their compensation strategies in the past few years and effectively eliminate key pain points companies face. Clients like MasterClass, Peloton, and InVision have worked with Kamsa to establish career paths for their employees with competitive salary ranges. These have directly impacted employee decisions to stay and grow within the companies. Leaders can make informed pay decisions based on clear compensation philosophy and reliable market data.
Here are four steps to creating a successful compensation strategy:
Re-evaluate jobs by job leveling
Perform a market compensation analysis
Develop a compensation philosophy statement
Run Compensation Reviews
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 know the 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.