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Compensation Program Resolutions for 2016


Every year we provide our clients, colleagues and the world at large with our recommended resolutions for improving the effectiveness of their compensation programs.  This year the theme of our resolutions is simple:

Lift your compensation program out of the morass of ineffective and destructive methods that continue to plague the human resources profession and the popular business media.

Effectively — get back to the basics and toss out the gimmicks!

Over the next few weeks we will explore each of the following resolutions in detail:

  1. Educate all of the key players in your organization about how employee compensation works, and how it should be used to improve organizational performance.
  2. Build a culture and philosophy that will lead to taking compensation off the table — effectively making it a non-issue rather than a bone of contention.
  3. Reduce your reliance on market data in favor of an effective internal equity program.
  4. Reconsider your organization’s “minimum wage.”
  5. Eliminate “across the board adjustments” or “general increases” and move to individual adjustments.
  6. Forget last year and the “what have you done for me lately merit increase” and refocus individual compensation adjustments on what people should be paid now based on the job and their performance.
  7. Tie performance management programs directly to the expectations of the job as outlined in effective job descriptions.
  8. Ensure that base pay is predictable, and tied directly to job performance.
  9. Revisit every incentive and compensation policy and ensure that it supports the overall program, and actually achieves the desired results.
  10. Make your compensation program transparent, and effectively communicate everything that employees “need to know.”

If all of this seems confusing, or as if it is too much to even contemplate, read on over the next few weeks and see how easy it can be to do it right — and how what you’re doing right now may be causing you more grief than good.