The compensation strategy is the essential strategy for the business, which wants to eliminate the external competition from attacking the top talents. The company has to define its position on the job market, it has to identify bene

1. creative HRM
Compensation
Strategy
What is the compensation strategy?
How does the compensation strategy drive performance and innovation?
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2. The compensation strategy sets a clear guidance for the key remuneration
principles in the company. The strategy defines key strategic behaviors and
values, which are remunerated. It defines the values and behavior, which are
valued and rewarded. The compensation strategy makes the difference between
the focused strategic compensation and a bunch of different non connected
compensation components.
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3. creative HRM
Content
(1) About cHR
(2) What is the Compensation Strategy?
(3) Key Components
(4) Common Implementation Approach
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4. creative HRM
About
creative HRM is a website covering many HR related
topics... HR Management, HR Management Practices,
HR Strategy, HR Models, HR Business Partnering Model,
HR Processes, HR Development, Organizational
Design ...
The website is new and fresh, a lot of new content will
be added during 2013. Please, follow creative HRM as
you do not miss any news... cHRM Twitter
Please, feel free to visit creative HRM
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5. What is the
Compensation
Strategy?
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6. creative HRM
Compensation Questions
Compensation Strategy Challenges
๏ HR enjoys raised expectations of the top
executives. They want HR to increase the
performance, to retain key employees, bring new
skilled talents to the company and they want to
keep costs under a strict control
๏ Finding, motivating, developing and keeping
employees is a key component of business
success
๏ The compensation components cannot be
managed discretely, they have to be a part of the
overall strategy - the company has to define the
competitive compensation strategy
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7. creative HRM
Compensation Strategy
Key Components
PAY
Base Pay
Overtime Pay
Short term incentives
Lump Sum Payments
Cash Profit Sharing
Long Term Incentives
Performance Plans
Equity Plans
BENEFITS
Retirement
Health
Paid Time Off
Income Protection
Death Benefits
Work/Life Balance
Other benefit policies
CAREERS
Skills enhancements
Leadership Development
Career Advancement
Promotion Process
Employment Stability
Nature of Work
Rotations and Job Enrichment
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8. Key Components of the
Compensation Strategy
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9. creative HRM
Pay
Key Compensation Strategy Components
๏ The key component for the right positioning of the
company on the market
๏ Generally, the higher pay can attract skilled employees
and reduce turnover if aligned with right values
๏ The right pay depends on key values and behavior the
company want to reward
๏ Most successful companies do not use the competitive
pay as the advantage; they set the proper mixture of
the pay, benefits and career opportunities.
๏ Changes to pay are quick to implement, but they can
become extremely costly to the company
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10. creative HRM
Benefits
Key Compensation Strategy Components
๏ The attractive benefits package can be a real competitive
advantage - if benefits offered are aligned with the corporate
culture and values of the company and employees
๏ The company has to define its strategy for benefits. It is simple to
lay one benefit over another one. The company has to manage
costs of providing benefits. It has to define its core benefits, which
will be used as a basis for building the competitive advantage
๏ Flexible benefits are usually seen as the best alternative, but the
company loses the option to put “its corporate extra” into the
package
๏ Benefits do not increase the satisfaction of employees, but they
are seen important when the employee considers another job
offer
๏ Benefits can be used as a great reward and recognition tool
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11. creative HRM
Careers
Key Compensation Strategy Components
๏ Careers represent the future value to employees of staying with
the company
๏ The opportunity to learn and grow is highly valued by many
employees
๏ The proper career management is also a strong cost
management tool for the company
๏ Careers are always connected with the strong performance
management process and with the succession planning
processes
๏ Many companies do offer specialized career opportunities and
they let employees leave after a limited period of time (and they
are valued for)
๏ The position and weight of the career management in the reward
mix depends on the industry and the mixture of employees
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12. How to develop an
effective Compensation
Strategy?
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13. creative HRM
Compensation Strategy:
The development process
1. Review the business environment. Understand the
key factors outside the company.
2. Assess the business design. What are your key
business drivers, goals?
3. Examine critical HR implications. Articulate the role
of employees in executing the business strategy.
4. Measure the internal reality. What do you reward?
How? Why?
5. Identify gaps and priorities. What needs to be fixed
or changed? When?
6. Develop the action plan. Measure it.
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14. Want to know more?
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Please, feel free to visit creative HRM
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16. creative HRM
About
creative HRM is a website covering many HR related
topics... HR Management, HR Management Practices,
HR Strategy, HR Models, HR Business Partnering Model,
HR Processes, HR Development, Organizational
Design ...
The website is new and fresh, a lot of new content will
be added during 2013. Please, follow creative HRM as
you do not miss any news... cHRM Twitter
Please, feel free to visit creative HRM
pondělí, 30. září 13