This document discusses building a strategic approach to compensation. It outlines the key elements of compensation maturity, including having a compensation philosophy and strategy aligned with organizational objectives. It also discusses challenges in compensation like responding to market shifts and retaining top talent. Building compensation maturity requires streamlining processes, having the right data and technology, as well as people and resources dedicated to compensation. Higher maturity is associated with better business outcomes and competitive advantage.

1. The Compensation
Maturity Journey:
How to build a strategic
approach to compensation

2. Ruth Thomas
Chief Product Evangelist
Payscale

3. A new era for
compensation strategy

4. #COMPFERENCE22
The challenges we face
4
What is our role in
supporting
employees against
the background of
a cost-of-living
crisis?
How can I comply
with multi-state
and geography
legislation
demanding more?
How has my
competitive
market shifted?
Am I prepared to
respond at pace?
Do I have the right
total rewards
package to attract
the talent I need and
retain my top
performers?
How can we
leverage
compensation
to reshape our
workforce for
the demands of
this time?
What’s the
right way to
adapt pay for
remote or
hybrid
work?
How can I adapt to
a changing
environment when
things are shifting
so quickly?
How transparent
can I realistically
be right now
without risking
losing out on talent
or losing my
current talent?
How do we
tackle pay
compression
and maintain
equity?

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The talent crisis is unabating
5

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More organizations are recognizing a need for a
strategic approach to compensation
86% of orgs say they have a compensation
strategy or are working on one — a 10% increase
from last year and a 16% increase from previous
years (when this stat hung out at 70% YOY).
However, only about half of orgs are confident in
their strategy.

7. #COMPFERENCE22
And this is was a high priority in 2022
7

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What does strategic compensation look like?
8
Organization
Mission &
Strategic Objectives
Compensation
Philosophy
& Strategy

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9
“Strategic Compensation happens when
you start viewing pay as an investment
rather than a cost and treat your people as
an asset “

10. Compensation
Challenges
Fundamental elements and best
practices to face the future with
certainty and readiness

11. #COMPFERENCE22
11
Identifying your compensation strategy
• A compensation philosophy defines your fundamental approach
and what you are trying to achieve with pay. Your philosophy should
link compensation to the mission, values, and guiding principles of
your organization.
• Your compensation strategy should bring your philosophy to life! A
strategy typically includes a definition of the external competitive
market and internal equity objectives, as well as defining your
compensable factors along with definitions of the pay programs
you’ll use and why they’re in place.

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Building a solid foundation
• Job management is central to any compensation effort. It involves
defining job descriptions as well as leveling jobs and creating and
managing the job architecture required for your business to
operate.
• Salary data is the essential ingredient that enables leading
organizations to confidently price jobs.
• Market pricing is a pay methodology that enables you to analyze
what everyone else is paying for specific jobs in specific markets
and establish pay ranges appropriate to your compensation
strategy.
• Pay structures involve grouping comparable jobs into pay grades,
with a minimum and maximum rate based on credentials,
experience, and seniority level.
• Pay Equity ensures external and internal equity and consistent
application of pay polices.

13. #COMPFERENCE22
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Managing the compensation cycle
• Pay analysis and reporting are key to providing business insights.
Analytics will support compensation decisions and confirm if you
are executing your compensation philosophy and strategy.
• The annual Compensation planning process is the primary
method for aligning your pay practices, in today’s business
environment there is a need to be more agile.
• Today’s modern organizations understand that comp requires real
collaboration to have the most impact. Empowering managers to
make informed decisions and ensuring employees understand how
pay is determined are critical.
• Pay communications and transparency have never been more
important. Communicating more openly with employees about how
compensation works in your organization builds trust and
engagement.

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14
Monitoring trends and hot topics
• Tracking and responding to labor market trends, economic
conditions and shifting business models is essential
• Your compensation approach should be agile to adapt to these
market changes, our compensation eco systems need to be
dynamic.
• Building resiliency is essential and compensation resiliency is
dependent on strong foundations

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Not sure implement these compensation
challenges?
That’s why we’re here.

16. #COMPFERENCE22
Choose the data sets that reflects what
the market is paying and ensure you
remain competitive without overpaying.
Leverage Payscale data and/or manage
and participate in market surveys from
our platforms.
Understand Competitive Market
& Determine Data Strategy
Leverage your market data to implement your
pay strategy and prepare for pat transparency.
Develop your job architecture, complete
market pricing and create pay structures.
Reporting makes it easy to make pay
decisions while keeping an eye on
underpayment, overpayment and equity
challenges within your business.
Benchmark Jobs and Create Pay
Structures
Communicate pay ranges internally
by securely delivering customized
compensation statements
Confidently post competitive salary
ranges in line with your strategy
Communicate Compensation
Internally and Externally
Facilitate Collaborative
Compensation Planning
Rapidly build and maintain job
descriptions that help you best
understand the jobs performed at
your organization to ensure accurate
pay.
Understand Employees Jobs
Complete Pay Equity Analysis
The Payscale Portfolio
HR Market Analysis,
Employee Reported, Peer
Payfactors, MarketPay
Total Rewards
Statements, Payfactors,
MarketPay
Automate the merit cycle including
HR, Comp and front-line management
teams, empowering more meaningful
pay conversations
Enforce budgets, strategy and
timelines from a single location
Compensation Planning
Pay Equity
Understand representation and statistical pay
gaps within your organization
Complete remediation planning based on your
budget
Complete analysis using easily available data in
place of or alongside pay equity consulting work
Compensation Philosophy and
Strategy
Job Description Manager,
MarketPay Jobs Powered by
JDXpert

17. Compensation
Maturity
Building a strategic approach to compensation

18. #COMPFERENCE22
18
The compensation maturity model

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CBPR 22 outcomes on maturity
41% of Payscale customers are advancing or
optimizing their pay practices compared to
23% of non-Payscale customers.

20. #COMPFERENCE22
Maturity by company size
20
1-99
employees
100-749
employees
750-4,999
employees
5,000-49,000
employees
50,000 or
more
employees
0 As Needed 14.4% 7.8% 3.0% 1.6% 1.1%
1 Emerging 31.5% 25.5% 14.4% 7.0% 5.5%
2 Developing 34.9% 42.9% 39.4% 35.6% 20.9%
3 Advancing 12.4% 19.9% 32.2% 38.7% 42.9%
4 Optimizing 14.4% 7.8% 3.0% 1.6% 1.1%

21. #COMPFERENCE22
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Compensation maturity drivers
TECHNOLOGY: Investment in
technology to automate compensation
processes, to ensure focus is on
outcomes rather than processing whilst
delivering critical insights to inform
decision-making.
PEOPLE: The level of dedicated resource
allocated to managing compensation as
well as integration with other talent
processes and collaboration across the
organization.
PROCESSES: Streamlined, consistent yet
adaptable process that require minimal
administration and are monitored for
effectiveness.
DATA: Along with annual and quarterly
published results, real-time validated survey
data is available for on-going or just-in-time
salary planning and review that's precisely
aligned to the organization's data strategy.

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The 25th Edition of the
Annual Systems Survey
Maturity drives our ability to contribute strategic value

23. #COMPFERENCE22
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Maturity drives positive business outcomes
✓Increased process efficiency
✓More time for value-add activities
✓Reduced risk of error
✓Greater market competitiveness
✓Higher talent retention
✓Increased return on investment and business value

24. Explore the Expo Hall
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Report (CBPR) this year. Look for the open survey on payscale.com.
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