As you begin to prepare next year’s salary budgets, etc. … wanted to offer a few compensation insights/reminders, to aide your 2018 compensation planning. As you well know, it is tougher than ever to balance competitive costs with ability to attract, retain and motivate sufficient top talent to meet Community Financial Institution strategic objectives …. The following and attached are a few guide points (i.e. compensation planning questions we would ask, and tips that may be helpful (or confirming) to your planning efforts:
Key Comp Questions to ask yourself (and others at your Company):
- Are our compensation offerings complete and competitive?
- Are our overall compensation costs competitive?
- How does our pay mix compare with the industry?
- Does our “payout curve” promote the right relationship between pay and performance?
- Think total compensation – dangerous to look at any single element of compensation in isolation …
- Your people may be invaluable as individuals, but every job has a specific value range … use care, only two ways to get out of non- competitive costs positions, and neither is easy …
- Variable compensation is both very powerful and very dangerous … but just like rest of your business ‘it’ is about managing risk … if well designed, incentives should pay for themselves and clearly convey your organizations appetite and culture ….
- Incentives do not make good people work harder, but should help them understand specifically what you need for them to do/accomplish … hardest part of incentive design is to develop a well-defined “cascade of strategic and budgetary goals to line-of-sight’ …
I hope this information resonates and aides your efforts in preparing your organization for its 2018 Human Capital challenges. Should you have questions about these offerings, and/or we be able to assist your planning in any other way, please do not hesitate to let me know.
The Best to all for a Successful 2018!