As part of a strong retention strategy, every organization must have a compensation philosophy and aligned strategy. The below checklist is a starting point to help you gauge your current plan within the framework I use with clients. No strategy checks every box, but if you have spent time thoughtfully building your compensation strategy, you should hit at least 80% of these both overall and within each section.
Feeling overwhelmed? If your organization has very few of these things, it can be hard to know where to start. Here are my First Three – the first three things you need to ensure compensation is equitable, strategic, and sustainable.
1. Jobs are aligned to specific compensation bands. Your bands may be wide, or even overlap, but job titles are categorized into bands. You’ve clearly articulated criteria for how an individual role is classified and separately, how an individual’s compensation is set within each band.
2. Key stakeholders have aligned on a compensation philosophy. As a leadership team, you’ve discussed where you plan to target your comp compared to market rates. You’ve debated whether you value performance or experience more and how you’ll reflect that in your pay structure. You’ve had the tough conversations and come out the other side.
3. The organization can financially sustain its compensation structure for the foreseeable future. Your CFO isn’t sweating bullets over your current comp plan. We don’t like to stress our CFOs :).
Ideal State
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