SHRM 2011 – Aligning Comp with Business Goals

SHRM 2011: “Stupid Things” We Do in Compensation

I learned a very important lesson during my first speaking engagement at the SHRM national conference: Be careful what you say. During my conference break-out session titled “Aligning Your Compensation Strategy with Business Priorities” I said, “I’m on a mission to eliminate the stupid things we do in compensation.” A writer from the SHRM newsletter was listening. Guess which quote led his article? Yep, you guessed it.

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It’s true that, at PayScale, we are on a mission to help organizations drive better business results with smart compensation management, but I, unfortunately, didn’t use those words. Ah, well… lesson learned. I can only hope that my “stupid things” quote grabs some attention and focuses people on important task of managing compensation well in an organization.

Strategy Is a Favorite Topic

We have discussed the topic of aligning your compensation strategy with business priorities plenty of times here on Compensation Today. The following posts offer some examples:

Designing Bonus Plans That Cut Business Costs

Customize Your Compensation Plan for Your Organization

Why Develop a Competitive Compensation Plan

How to Create a Merit Matrix

Communicating Compensation to Employees & Leadership

When I spoke of “stupid things” in my presentation, I used across-the-board increases as an example. I write about my reasons here, “How Do I Design a Compensation Plan That’s Customized to My Organization?

How to Align Your Compensation Strategy with Business Priorities

If you missed SHRM this year and my session, you can read the article about it here: Align Pay with Business Priorities and Reap Rewards. Below is a summary of my main points.

Become an expert. If you want a seat at the table, guiding business decisions, know your business and understand compensation completely. Google any word or concept you don’t know. We have a whole “How To” section here on Compensation Today. Ask questions to the leadership at your company. Attend webinars and become an expert in compensation and how it can be used strategically at your company.

Review your current comp plan. How update-to-date are your salary range benchmarks for each position? How equitable is the pay at your company among protected classes? Which workers are being rewarded? You must have reliable market data to benchmark against to answer all of these questions. Get advice on doing so here: 6 Questions to Ask When Evaluating Salary Surveys.

Lead your leadership. You may think that you’re in charge of compensation at your company, as an HR professional, but you’re not. You must create a relationship and start an ongoing conversation with the leadership at your company. They can veto, stop, undermine or ignore any pay structure strategy you suggest, if they don’t understand or agree with it.

Make your pay structure support the organization. Every compensation decision must add to the strength of the company. From rewarding those who boost the bottom line, to red-circling those whose pay is above market. You must be a warrior for company success, on all levels. And, encourage managers to be the same. Lead by example.

Communicate. Everyone involved with pay at your organization, which means everyone, in one way or another, needs to understand the company’s strategy around compensation. Be sure to clearly and regularly share your company’s goals and how the pay structure supports them. Make it clear and be consistent.


Stacey Carroll, MBA, SPHR

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