Every organization compensates its employees, but few do so according to a defined plan that accounts for employee recruitment, retention, and cost control.
To avoid the financial loss that can result from this lack of direction, organizations should have an up-to-date compensation strategy that includes:
- A compensation philosophy.
- A compensation policy.
- Compensation plans for employee segments that have distinct properties (e.g. executives, salespeople, etc.).
- An organization-wide compensation plan that encompasses all employee-segment plans.
It's well worth the time investment; McLean and Company's research shows that organizations that have an up-to-date compensation philosophy and policy enjoy greater success with their overall compensation strategy.