Transparent and Fair Compensation Strategy

The managers and employees want the compensation strategy to be transparent. They do not want it to be transparent, they want it fair and that they are able to understand, where the position of the company on the job market is and why the compensation strategy emphasizes some compensation components above others.

The transparent compensation strategy is about the explanation of the basic principles included and the managers should fully understand the situation on the external pay market as they can use the compensation strategy as the argument in the discussions with their employees.

The compensation strategy is defined by the top management and it has to be a living document, which reflect the changes on the job market and new approaches in the compensation and benefits area. The changes in compensation strategy are difficult as the employees can lose some compensation components, but HR has to adjust the compensation strategy according the job market.

The design of the transparent compensation strategy is not easy as the organization has its history and the solution for the exceptions and the employees out of the ranges have to be the part of the compensation strategy as well. The HR Compensation and Benefits have to calculate detailed cost/benefit analysis as HR has to implement the compensation strategy.

The top management usually makes the promise, the compensation strategy will be fully implemented during several years and HR has to make a clear implementation roadmap as the managers will push to implement it fully in their departments immediately. The HR has to sort the employees into several groups and the priorities have to be assigned and HR has to be strict in the implementation plan to keep the assigned priorities.