Perry Doody, CompTrak Co-Founder and the Compensation Guy.
I often get asked what makes a great compensation plan? Over the course of the last twenty years, I have had the privilege to see many compensation plans. There are two key elements that stand out for me.
Alignment with Strategic Goals
The first key element to a great plan is the compensation plan alignment with strategic goals. To do this effectively, those goals need to cascade to various operational groups that require different metrics and weightings to be applied to groups of employees or even specific employees. The plan and its management need to be agile enough to accommodate the different metrics and weightings. Your compensation plan should be a lever in driving results.
Importance of Transparency
The second key element is transparency. Every employee in the organization should know how the plan is structured and what they need to do – both collectively and individually – to be rewarded. That transparency shouldn’t just happen once a year but throughout the year. If an employee does not how their bonus was calculated it can lead to a lack of employee engagement and even turnover. Employees want to know how they made a difference.
Here at CompTrak we aim to provide our customers with the right tools to help manage and administer their great compensation plans. Whether it be Incentive & Merit Review, Long Term Incentive Plans, or simply increasing engagement with their employees through interactive Total Rewards Statements, CompTrak is ready to help.
To learn more about this topic and others visit us at CompTrak.com
If you have a topic you want the Compensation Guy to tackle, send your comments and questions to [email protected].