TORONTO, April 6, 2022 /PRNewswire/ - McLean & Company, the trusted partner of HR and leadership professionals globally, has published a new blueprint to guide HR leaders in designing a compensation philosophy and strategy. This research blueprint will allow HR leaders to lay the groundwork for an approach that is comprehensive and cost-effective as organizations work to attract and retain employees in an increasingly competitive market.
In the newly released blueprint, McLean & Company's approach guides HR through developing a compensation philosophy that supports organizational goals and is relevant to the operating environment. The blueprint is intended for HR leaders to explore internal and external factors influencing compensation and build the compensation philosophy.
McLean & Company outlines that a compensation philosophy provides decision makers with guidance to ensure that compensation practices are consistent and aligned across the organization. To ensure consistency, the compensation philosophy needs to be driven by the organization's strategy and support the achievement of strategic objectives.
Employee compensation often comprises the majority of an organization's ongoing operating expenses. However, few companies have plans in place to sustainably direct and control this expenditure. Due to a missing or outdated compensation philosophy, many experience an inconsistent application of compensation programs due to a missing or outdated compensation philosophy. The result is internal and external inequities that can easily become organizational issues, such as:
- Competing organizations in the labor market are offering more attractive compensation packages.
- Employees are paid differently for the same job, and there is no clear rationale or justification.
- Turnover that is too low, which can lead to stale ideas or the retention of employees with a poor organizational fit.
Additionally, the right compensation philosophy will also outline the organization's target market position and its total target compensation, which will drive the selection of base and variable pay for each employee segment.
According to McLean and Company, pay inequity is the basis for most compensation-related discrimination claims. A well-designed compensation philosophy clearly articulates the organization's high-level approach to paying for each of its employee segments, including its target competitive position. As a result, it is good practice to evaluate the internal equity of compensation practices at a minimum every year.
To see the full blueprint, download McLean & Company's Craft a Compensation Philosophy research.
To learn more about McLean & Company and to download all the latest research, visit hr.mcleanco.com and connect via LinkedIn and Twitter.
Media professionals are encouraged to register for McLean & Company's Media Insiders program for more research and insights. This complimentary program provides unrestricted, on-demand access to HR, IT, and software industry content and the ability to speak with subject-matter experts from a group of more than 200 research analysts and thought leaders. To register for access, contact [email protected].
Through data-driven insights and proven best-practice methodologies, McLean & Company offers comprehensive resources and full-service assessments, action plans, and training to position organizations to meet today's needs and prepare for the future.
McLean & Company is a division of Info-Tech Research Group.
SOURCE McLean & Company
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