This document outlines a compensation review procedure developed by Natalia Zub for a company with 70 employees. It discusses when reviews should occur, who should be considered, and where funding will come from. Reviews are recommended annually or on a case-by-case basis, considering industry standards, growth, expectations and policies. Eligible employees include those with exceptional performance, over a year since their last review, or with salaries below market rates. Funding sources may include customer growth, cost decreases, project rotations, overtimes, and variable pay. The procedure aims to provide transparency, simplicity, and eliminate financial gaps and bureaucracy.

1. Compensation
review procedure
Developed by Natalia Zub for The54

2. This is a story…
about 70 people
5 managers
and one HR
All of them wanted to benefit from the
process of compensation review
But everyone has a different goals

3. 3

4. STEP 1. When?
When it’s time to increase
compensation?
4

5. When?
5

6. When?
6
• Every year?
• Every calendar year?
• Every 6 months?
• Every 3 months?
• Case by case?
 Company statistics:
• Attrition cases (reason: compensation issue)
• Ad hoc reviews (year to date) with budget
 Industry standards
 Growth and Age
 Psy factor and expectations
 Company policies

7. How often?
I’ve got a compensation increase. When will
be the next round?
7

8. How often?
8
+9%
+42%
*dou.ua

9. How often?
 Market dynamics
 Company statistics:
• promotions frequency
• average age
 Forecasted budget (for a year)
 Ad hoc cases
 Company policies (performance reviews)
 Workload
9

10. STEP 2. Who?
… deserves?
10

11. Who?
11
 promotion
 exceptional performance
 more than one year from the last salary review
 salary level is much below the market
 red flag

12. Why?
12

13. 13

14. Why?
14
 The latest performance review results:
• Performance
• Potential
• MBO goals completion
• Promotion
Key indicators:

15. STEP 3. Where is a
money?
15

16. 16

17. Where is the money?
17
 Take a look at the year not one month
 Take a look on a team not a person
(business generator)
 Customer raise (due to promotion)
 Variable part, MBO
 Operational costs decrease
 Project rotation
 Overtimes
 …
Some ideas:

18. How the procedure
works
Finally, we’ve got the transparent process
that suits our needs and goes in line with
other company processes. It works
successfully for almost 2 years.
Full transparency for people and
managers, simple process, no more
financial gaps, zero bureaucracy
The results

19. How it works
19
HR Department
List of people
Age in company
Age from last review
Reason for last review
Compensation
Market
Project Finances
Performance review results
List of people
New salary
Raise delta
Reason for review
Project Finances
Overall budget
Project managers
List of people
New salary
Raise delta
Reason for review
New Financial
Overall budget
Approvals
Overall budget
Board
List of people
Retention
1 2
3
4
5

20. Thank You!
INNOVECS HEADQUARTERS
6-z, Ivan Lepse Avenue
Kiev, Ukraine 03680
Office: +38-044-593-7794
Fax: +38 044-593-7795
www.innovecs.com