Compensation planning and administration can be an odyssey. Traversing your way through the trials and tribulations of benchmarking jobs, analyzing market data, and building then communicating a compensation structure can feel like quite the expedition.
In the years that I’ve been working with customers in different stages of their compensation quest, I’ve noticed that many see compensation planning as a necessary destination, something to check off a to-do list. However, seeing comp only as a destination may prevent your organization from receiving value from each step of your compensation journey.
While dreaming of the beautiful island destination of Comptopia is a wonderful goal, follow along to understand how you can appreciate each step of your compensation odyssey.The more you love the odyssey the easier it will be to get to Comptopia!Click To Tweet
Job Analysis Jungle
Job analysis is the starting point and most dreaded milestone in the comp planning journey. It constantly falls to the bottom of the project list, and is an activity that strikes fear in to the heart of many a compensation or HR professional.
This doesn’t have to be the case! Job analysis is hugely valuable to your organization and is a worthwhile part of your comp journey. Taking the time to analyze jobs gives you a leg up later when it comes to benchmarking and legal compliance. It also gives you a chance to take stock of whether the job summaries still reflect actual employee responsibilities. If not, this is the time to either adjust what employees are doing or revise job summaries.
Make job analysis less tedious by separating the tasks of job analysis for market benchmarking: identifying key compensable job details like years of experience, degree level, and key skills – and job analysis for compliance: listing legally mandated language and stipulations of a job. If one of these tasks is more urgent than the other, focus on that part first.
Whatever the tools you use to benchmark jobs in your organization, traditional salary surveys, free online resources, and/or robust crowd-sourced market data, benchmarking is another activity that can feel daunting. Benchmarking answers the question: how much jobs are like mine are paid in our talent market. Your talent market, which describes your competitors for talent, refers to the locations, industries, organizational sizes, and organizational types that you hire from or hopefully to whom you don’t lose employees.
This piece of the comp journey can feel the most tiresome, so it is often rushed and undervalued. There is a wealth of data information to be gleaned from benchmarking your jobs to the right talent markets. Make the time to review and analyze the market data you’ve gathered and understand how that information impacts your organization.
A common misstep with market data is to think of it as right or wrong. Market data should be interpreted in the context of what you’re actually trying to accomplish. Taking the opportunity to examine market data and consider how it is applicable to your org is hugely impactful, a worthy stop on your compensation journey.
Strategy & Structure Seashore
The strategy and structure seashore is a nice place to enjoy an extended layover during your compensation journey. Pull up a blanket, put your feet in the sand, and give yourself some time to ponder what your organization is trying to accomplish with a comp plan. When you dream of Comptopia, what does it look like for your organization? The answer to this question can help inform both where you target the market, what you decide to prioritize, and how you build your pay ranges.
What would a well-managed, well-communicated structure look like at your company? Building out pay ranges helps create order from the chaos. With ranges you can answer questions about how your comp plan is performing to the market, what to offer new employees to your organization, and how your organization values your jobs relative to one another. Having a comp strategy & structure in place is like buying yourself a first class ticket to comp plan paradise!
The simple act of communicating that you are doing a market study/benchmarking exercise is super valuable. This may be something you communicate to execs, leadership, management, or out to the entire organization. As you do, be mindful of your audience as there will naturally be questions about ‘what’s next?’
Take this opportunity to communicate with compassion. Compensation is personal. This is your chance to define, explain, and communicate to your organization how your jobs compare to market, what sources you’ve chosen to use for market comparison, and why the organization has developed this particular comp plan.
There are some tools that help communicate comp plans; maybe you want to share pay ranges with your managers. Some tools help communicate pay increases; consider using total rewards statements to provide information about the range of rewards employees receive. Pick a spot on the pay transparency spectrum that’s right for your company and create compensation communication content that honors that.
Comp Plan Paradise
Arriving at paradise is made sweeter by having the confidence in your comp plan that you’ve gained at each step. The data, structure, policies and processes that you’ve collected along your comp plan journey are the supplies you’ll need to set up camp in Comptopia. Think mai-tais, sandy beaches, and easy breezy recruiting, raise recommendations, and results!