Developing a Compensation Plan, Step 7: Keeping It Updated


This is a lesson from PayScale’s Modern Compensation Planning ecourse. Want access to all seven lessons? Sign up for the course!

Now that you’ve built and implemented your plan, think about how you can keep it current both from year to year and between cycles.

One of the tricks of compensation planning is that it’s never truly done. As soon as you think you have crossed all your Ts and dotted all your Is, a well-meaning employee or manager will point out some skill or certification or priority that hasn’t been accounted for yet.

That doesn’t mean you have to go back to the drawing board; sometimes it’s helpful to draw a dotted line in the sand. Here are some suggestions to help you do just that:

  • Build an evaluation process into your rollout that makes adjustments to the plan after a month, a quarter or maybe six months.
  • Develop a short list of “hot jobs” that you plan to review for market movement on a monthly basis. Consider involving your managers or leaders in generating the short list.
  • If you have an organization that involves managers, train them in what matters in defining jobs for compensation purposes, and have them review their job descriptions for accuracy.
One of the tricks of compensation planning is that it’s never truly done. Click To Tweet

Keep It Up

Consistent application of your documented pay practices is one of your best defenses against charges of pay inequity from employees and outside agencies. If you need to deviate in any way from your company’s compensation policy, which happens at times to compensate truly exceptional performers, document the justifications for the decision with relevant information. Continue to communicate with employees about your company’s intentions with regard to compensation.

Also, be sure you keep your plan current to the market with a regular review cycle. It’s during these larger plan reviews that you should recommit to your compensation philosophy, update your compensation strategy to the new business priorities, refresh your market data, revise and update pay ranges and fix any outdated policies and processes. Think of these major reviews as the higher level strategic reviews that help ensure that your plan is still aligned with your business goals.

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Summary

Over the past seven lessons, we’ve covered how to:

Depending on the complexity of your plan, it may take anywhere from a few days to several weeks to develop. Do take the time to flesh out your compensation plan, and involve necessary parties as you go. Your compensation plan can guide your organization in its talent strategies, both for retaining and hiring the best talent. And remember, it doesn’t need to be perfect the first time around! The important thing is to put some thought into it, make sound data-driven decisions and be intentional about how you communicate it.

Resources

Webinar: [RECORDING] Spring Clean Your Comp

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