- Compensation is typically the number one operational cost in organizations, yet few of them have plans in place to properly direct and control this expenditure.
- Many organizations experience an inconsistent application of compensation programs due to a missing or outdated compensation philosophy, resulting in internal and external inequities.
- The compensation philosophy should be primarily driven by business strategy and support the achievement of strategic objectives.
- A compensation philosophy provides decision makers with guidance to ensure that compensation practices are consistent and aligned across the organization.
Impact and Result
- A well-designed compensation philosophy clearly articulates the organization’s high-level approach to pay for each of its employee segments, including its target competitive position.
- There are both internal and external factors that influence compensation, and these factors need to be explored to develop a compensation philosophy that fits your organization’s context.
- McLean & Company’s core elements of a compensation philosophy will help you create employee segment plans that are legal, culturally aligned, and designed to support organizational goals.
Workshop: Craft a Compensation Philosophy
Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost onsite delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.
Module 1: Explore Internal and External Factors Influencing Compensation
Discuss challenges, explore internal and external factors influencing compensation, and identify competitors for talent.
Key Benefits Achieved
Use McLean & Company’s process to create a competitive, cost-effective, and brand-aligned compensation philosophy.
Identify and discuss compensation challenges.
- Compensation challenges identified.
Discuss internal and external factors influencing compensation.
- Factors influencing compensation analyzed.
Identify competitors for talent.
- Competitors for talent identified.
Module 2: Draft a Compensation Philosophy
Determine high-level needs for compensation philosophy and prepare a draft.
Key Benefits Achieved
A drafted compensation philosophy for your organization will be prepared.
Uncover fundamental compensation principles.
- Compensation principles determined.
Determine general market positioning.
- Market position defined and understood.
Select market positioning strategies and targets.
- Market positions determined for each employee segment.
Draft the compensation philosophy.
- Compensation philosophy is crafted.