Compensation Strategy Implementation

The compensation strategy does not change the compensation policy and the compensation components from one single moment. It takes some time to implement it fully.

The compensation strategy change is usually about the additional costs for the organization. Usually, it is presented as the cost neutral compensation strategy, but it can happen just in the ideal situation, that the salary increases are balanced by the salary decreases. And this does not happen usually.

As the new compensation strategy increases the costs of the organization, it has to be implemented carefully and the top management has to decide about the priorities and the managers have to accept the time line.

The HR Departments makes the proposal about the priorities for the implementation, which is usually driven by the need of the business. The sales force staff is always the first to align with the new compensation strategy and the back office has to wait. The top management decides about the priorities on the basis of the influence on the income of the organization. As the sales force and the specialists are the real human capital of the organization, they are always the first ones to be served.

The managers will always try to get the exception for their own unit, when the new compensation strategy could bring the benefit for them, but HR has to be strict and the compensation strategy implementation has to follow the approved priorities. The only one exception in the implementation plan can bring huge issues.