[Go here for #1 to #3]
#4: Competitive Reference Points
Describe the comparator group(s) for your rewards package
Determine industry/geographic competitors
For signature programs, what are the benchmarks
#5: Competitive Positioning
Describe your desired position vs. the market. If your position is below market average, be prepared to explain why. Honesty is a positive message, says Csizmar. (Be sure you walk the talk.)
Avoid false aspirational statements like “We pay at market.” when actually your ranges are at market, but your pay isn’t.
6: Internal Equity and Consistency
Will your strategy be consistent? Employees will assume yes, that they are getting fair and equitable treatment. It is a common occurrence that business necessity forces you to pay new hires more than existing employees. Be sure you are consistent and that exceptions can be explained.
If you fail here, first you lose employees’ hearts and minds, and then eventually their bodies when they up and leave.
7: Communication and Involvement
How much program information will you disclose? Key elements for sure, but not necessarily all the particular details.
Clarify HR vs. management responsibility for program design and ongoing administration. HR typically is the responsible party for rolling these programs out, Csizmar says.
If have unions, employee councils, or other similar bodies, you should indicate what the roles are and what the extent of employee involvement is.
8: Governance
State the need for revision and competitive refreshing of the strategy. Determine the frequency of review and by whom? HR should take the lead, Csizmar says.
Also for senior management, are we keeping pace with our commitment?
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Communicate, Communicate
Then, you need to communicate:
- Define a theme to generate interest.
- Talk to employees, not at them.
- Use multiple media, speaking points and Q&As.
- Be easily understood; avoid confusion.
Sample Ministatements
Csizmar offers the following as examples of clear statements you can make about your compensation program:
- Base salary will be targeted at the 50th percentile of the relevant competitive marketplace in which we compete.
- Future salary increases will be based on an employee’s evaluated performance.
- Benefit scheme provisions should be cost- and tax-effective to the company.
- If individual performance does not meet objectives, monetary rewards will be reduced.
This Is Not Easy Stuff!
Finally, says Csizmar, this is not easy. You may expect challenges, such as:
- It’s hard to establish consensus on what to do.
- You can expect passive resistance (especially those who are happy with the status quo).
- You have to have top-down support.
- You need to monitor reality vs. plan.
It’s not easy stuff, but you can’t avoid it—your compensation strategic plan, just one of comp and benefits’ daily challenges. “Maintain internal equity and external competitiveness and control turnover, but still meet management’s demands for lowered costs.” Heard that one before?
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“Base salary will be targeted at the 50th percentile of the relevant competitive marketplace in which we compete.” As you say, it’s not easy, so it’d probably be wise to provide your employees a real-world example of what this means.