How to Develop a Total Compensation Strategy

May 4, 2009Presented By: Natasha Lomas

Agenda

Define Compensation Define Strategy Strategic Choices Tailoring the Compensation System to Business

Strategy The Total Compensation System Compensation Elements Key Steps Rewards of Work Questions

What is Compensation?

Design Diagnosis Re-enforce

What is Strategy?

Strategy refers to the fundamental directions that an organization chooses.

Strategic choices

Corporate objectives, strategic plans, visions

and values

HR Strategies

Competitive advantage

Employee attitudes and behaviors

Business unit strategies

Compensation systems

Strategic compensation

decisions

Social, competitive, and regulatory environment

Aligning Compensation Strategy

Employee Inputs and Preferences

Strategic Business & Operating Inputs

Industry and Labor Market Practices and

Trends

Asse

ssm

ent

Des

ign

Compensation Philosophies and Objectives

Base Pay

Delivery

Organization Performance or

Variable Pay, Nonmonetary & Other Monetary

Rewards & Recognition

Fringe Benefits Compensation Administration

Total Compensation

System

Motivation and Performance

Strategy and Value Management

Comment and Flexibility

Compensation Elements

Fringe Benefits

Mid/ Long-Term Incentives

Short Term Incentives

Base Salary

Key Steps Assess Total Compensatio

n Implications

Map a Total Compensatio

n Strategy

Implement Strategy

Reassess

Questions