When developing a compensation program, there are many complex ideas that must be conveyed as effectively as possible. Involving employees through representatives of different departments and levels of the business can help ensure that the material is well understood and well-received by smaller groups first, particularly when working with a large employee population.

Establish Core Team

Choose key members of management and a faculty representative to provide input on a draft compensation philosophy statement. Conduct a few focus groups to test that statement with employees and managers to make sure everyone understands it correctly use this link.

Mission and Vision

Keep the organization’s mission and vision at the forefront throughout the development process. Confirm at each stage that policies and procedures remain true to the foundational values of the company and its goals.

CEO and Management Team

Organizations must recognize that the culture and personality of their President or CEO should be reflected in their compensation philosophy. If the actions of the leaders do not mirror the strategies, the program will not be respected or effective.

Address Critical Questions

By answering the questions regarding critical compensation strategy early on, you can set the stage for why compensation is being designed the way that it is. Discuss:

  1. The most important organizational objectives right now.
  2. The most significant challenges to achieving the objectives.
  3. The implications these objectives and challenges have for the way employees are rewarded.

Critical Features

Consider the results, attributes, decision-making commitment, skills, and behaviors that are most critical to the success of the organization. These should be referenced in the philosophy, particularly in regards to professional growth and adjusting to change. Be certain that your new compensation package continues to support and reinforce these important features of success.

Employee Profile

How does your organization expect the landscape of employees to evolve over the next 5 years or so? Your overarching philosophy should reach to encompass the changes that are anticipated even that far out.

Employee Expectations

News of a new compensation philosophy can often lead employees to believe that the company is either cutting or raising salaries. Acknowledge this assumption from the beginning and strategize ways to manage expectations. Use opinion leaders who can reinforce your messages and the true driving force and consequences of your changing approach.

You can get employee input and encourage involvement from the very beginning of strategy development. Treat your employee teams as partners and assets in the course of this development, and the end results will be more accurately understood and appreciated by your employee base.

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