Craft a Compensation Plan
Lay the groundwork for compensation that is competitive, cost-effective, and brand-aligned.
- Please refer to our updated blueprint on compensation planning, Craft a Compensation Philosophy.
- Every organization compensates its employees, but few do so according to a defined plan that accounts for employee recruitment, retention, and cost control business goals. This lack of direction can result in financial waste or loss.
- Staff complaints about compensation issues are almost cliché. Managers often don't have defensible compensation information at their disposal to address employee concerns, leaving employees disappointed, frustrated, and eventually disengaged.
- Without a compensation philosophy, policy, and plan to steer their decisions, organizational leaders will make unguided compensation decisions. When compensation decisions are inconsistent, employees can experience real or perceived inequity, which could lead to lawsuits.
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Our Advice
Critical Insight
- Employees who are satisfied with their compensation are more likely to be committed to the organization.
- An organization that has an up-to-date compensation philosophy and policy enjoys greater success with its overall compensation strategy. However, only 26% of organizations have an up-to-date compensation philosophy, and only 27% have an up-to-date compensation policy.
- Executives are far away and the employee segment is most likely to have a separate compensation plan, with 80% of organizations taking a distinct compensation approach to this group.
Impact and Result
- Develop a clearly articulated compensation philosophy that accurately reflects the organization's true approach to compensation decision-making and practice.
- Create a solid set of rules for governing compensation practice in the form of a compensation policy so that all organizational managers are in agreement.
- Construct comprehensive compensation plans by employee segment, as well as organization-wide, to promote clarity, transparency, cost control, and the equitable distribution of compensation for all employees.
About McLean & Company
McLean & Company is an HR research and advisory firm providing practical solutions to human resources challenges via executable research, tools, diagnostics, and advisory services that have a clear and measurable impact on your business.
What Is a Blueprint?
A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your HR problems.
Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.
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Our analyst calls are focused on helping our members use the research we produce, and our experts will guide you to successful project completion.
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You can start as early as tomorrow morning. Our analysts will explain the process during your first call.
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Each call will focus on explaining the material and helping you to plan your project, interpret and analyze the results of each project step, and set the direction for your next project step.
Unlock Sample ResearchContributors
- McLean & Company conducted an extensive HR benchmarking survey, which captured responses on candidate sourcing strategies and trends from over 500 HR and IT professionals, between June 2011 and present day.
- McLean & Company conducted a compensation planning survey that captured responses on current practices and trends from approximately 63 HR and IT professionals in February 2012.
- McLean & Company conducted four interviews with thought leaders and HR practitioners between February and March 2012.
Company contributors included:
- Cutting Edge
- Wajax GP HoldCo Inc.