Ambitious Compensation Strategy

The compensation strategy sets the ambitions in the area of the compensation and benefits, the HR wants to reach within a defined period. The compensation strategy has to follow the business strategy and the general HR Strategy as they define the broader world of the new organization and the compensation strategy defines the behavior, which will be compensated by the organization.

The ambitious compensation strategy defines the base salary policy of the organization, which has to be aligned with the new mission of the organization and it cannot usually define the position on the job market at median. The ambitious compensation strategy has to point out the groups of employees, who will bring the new success to the organization and their base salaries has to reflect the new situation. The smart organization does not define the unified base salary policy for all the employees, but it brings differences as the employees in the new areas can feel the benefit of working in the risky area.

The bonuses can be defined in the ambitious compensation strategy aggressively. The bonus curves and the bonus levels can be defined aggressively, but the performance of employees has to be monitored closely and the KPIs have to be confirmed by the top management as the employees and the managers cannot fool the bonus scheme. Many organizations define the very aggressive bonus scheme and they do not monitor and define the principles for the content of the goals and defined KPI values and they pay huge bonuses with no long term benefit for the organization.

The benefits are not that important for the ambitious compensation strategy. The benefits are more about the retention of the employees and the aggressive and growing organization use the base salary and bonuses more to keep the employees working for the organization. The benefits are a strong compensation component in organizations focused on keeping their position on the job market and focused on lowering the fluctuation of employees.