Compensation Plans

With optimism that the economy is slowly rebounding, although currently labor markets appear to still be critically tight, I am curious as to how many HR professionals are considering reviewing their corporate compensation philosophies and plans to ensure they can not only retain their high performers, but also attract new talent when required. There are many changing business circumstances which require flexibility and agility with compensation. Some which come to mind are change in strategy, as well as changes associated within the overall market conditions. For example, if you have a new competitor in a region which will likely increase the threat to talent, is your compensation strategy aligned with performance and flexible enough to provide more frequent adjustments to pay? Are you partnered with a market salary survey vendor to ensure a positions’ compensation is relative to the market rate? A number of market salary survey vendors (a.k.a. compensation benchmarking vendors) come to mind: Culpepper, HayGroup, Mercer, Economic Research Institute, Synergy, Salary.com, PayScale, Radford, and Towers Perrin, to name a few. Who are your compensation partners you highly recommend? What about market research vendors for differing geographical regions such (e.g. Europe vs. North America)? The primary decision to make a compensation design and approach is one of structure. A majority of companies use a broadband method. There are pros and cons of the differing structures, such as it allows for salary increases without a promotion. How do you structure compensation at your organization? What are the primary considerations you take into account before making such a decision?  For example, if a company’s growth plan calls for future M&A activity, it would be important the compensation structure accommodated integration and alignment. What about checks and balances to ensure fairness and elimination of favoritism to ensure salary increases are aligned with performance? From my experience, it appears many companies have a checks and balances process, such as ensuring sign-off from more than one individual with management authority, whereas some have no process at all. Does a particular process jump out which has been easy to implement and gain quick buy-in? Compensation planning involves a number of actions and begins with a philosophy aligned with culture and strategy. Then we have job evaluations and salary market surveys followed by communication considerations to increase transparency and trust, and finally training managers on their role in managing pay. When rolling out a change in compensation, do you consider who your champions are, agents, sponsors and targets to align actions and buy-in for success? From your experience as an HR Director or Compensation Director, what else is necessary to ensure success?