Craft a Compensation Philosophy
Lay the groundwork for compensation that is competitive, cost effective, and brand aligned.
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Contributors
- Diana Holec, Senior Associate, Performance, Reward & Training, Aon Hewitt
- Jackson Lynch, President and Founder of 90 Consulting
- Jason Rowe, Manager of Survey Services, American Society of Employers
- Kent Flint, Chief Operating Officer, Real Estate Webmasters
- Kristen Cifolelli, Director, Research Services, American Society of Employers
- Megan Graham, Senior HR Advisor, Ross Video
- Melanie Hall, Job Evaluation Analyst, London Health Sciences Centre
- Michelle Edwards, Global Director, Total Rewards and Organizational Effectiveness, Agnico Eagle Mines Limited
- Randy Ross, Regional Compensation Specialist, Danfoss Group
- Syma Khan, Senior Manager, Compensation, Loblaw Companies Limited
Your Challenge
- 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- Many organizations experience an inconsistent application of compensation programs due to a missing or outdated compensation philosophy, resulting in internal and external inequities.
Our Advice
Critical Insight
- 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.
1. Explore internal and external factors influencing compensation
Gather data and information on various factors, which will guide decisions in the following step.
2. Draft a compensation philosophy
Develop a compensation philosophy that aligns with your organization’s strategy and competitive environment.
Guided Implementations
This guided implementation is a three call advisory process.
Call #1 - Explore internal and external factors influencing compensation.
Call #2 - Examine potential compensation principles and market positioning.
Call #3 - Review drafted compensation philosophy.
Book Your Workshop
Onsite 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
The Purpose
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.
Activities
Outputs
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
The Purpose
Determine high-level needs for compensation philosophy and prepare a draft.
Key Benefits Achieved
A drafted compensation philosophy for your organization will be prepared.
Activities
Outputs
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.
