The document outlines the importance of establishing a formal compensation strategy for organizations, emphasizing that compensation is a significant business cost and crucial for attracting and retaining talent. It provides a step-by-step approach for developing and implementing the strategy, including gaining management support, involving key stakeholders, and creating a communication plan. Payscale, as a market leader in compensation data, offers tools and resources to assist organizations in managing their compensation effectively.

1. Laying the Foundation for your
Compensation Strategy
Stacey Carroll, SPHR, CCP
Director of Professional Services & Education
PayScale, Inc.

2. PayScale is a market leader in global online compensation data.
With the world's largest database of individual employee
compensation profiles, PayScale provides an immediate and
precise snapshot of the job market.
7,000 Positions. Our patent-pending, real-time profiling system indexes custom
employee attributes (such as industry-specific certifications) and
50 Major Industries.
specific job titles for every industry.
11 Countries.
Our secure, on-demand business solutions, PayScale MarketRate
and PayScale Insight, provide employers with accurate, reliable
compensation detail never before available.

3. Have you ever . . . .
Had an employee come to you
with a ransom job offer from
down the street?
Had a hiring manager who insists
on paying a new hire $10,000 above
the market rate because “they must have this individual”?
Worried about the equity among your employee’s when it
comes to compensation?

4. The solution . . .
Create a formal
compensation program

5. Why should you have a formal compensation program?
• Good business sense
• Compensation is one of your largest single costs of doing
business
• Attract, retain and engage the talent you already have within
your organization
• Supports the desired mission, strategy and culture of the
organization.
• Can ensure equity and fairness among employees
• Improves employee morale
• Can reduce risk to the organization

6. How can you gain support from management?
• Focus on the business case
• Know what matters
• Use data to support your case
• Make it relevant
• Provide an example
• Identify risk to the organization
• Be prepared and well-rehearsed with your
recommendation
• Have an outline of the plan
• Be prepared with resource requests (financial, HR, etc)

7. Where do I start?
• Get the right people involved
• Buy-in from ALL key decision makers
• Have a project champion
• Identify the right decision-making
process
• Consider employee involvement
• Agree on goals
• Set a project deadline
• Create a communication strategy

8. Communication Strategy
• Communicate about the project
• What is the organization doing and why
• What is the process
• Choose the right messenger
• Be transparent about the process
• Be realistic about the goal – no promises should be made
• Don’t give employees the opportunity to assume what the
outcome will be
• Let employees know what to expect in terms of additional
communication regarding the project.

9. Creating the Compensation Strategy
Start with: Then:
Where is the Where Do
Organization Now? We Want To Be?
• Growth cycle • Importance of attraction, motivation
• Demographics and retention
• Culture/management style • Market competitiveness vs. internal
equity
• Competitors and degree of
competitiveness
• The right mix of compensation
elements
• Salary administration and decision
making

10. Implement the Plan
• Benchmark the organization
• Perform a gap analysis
• Create a proposal(s) for
implementation
• Decide what to do with anomalies
• Get buy-in again
• Communicate with employees
• Assesses project effectiveness and
next steps

11. PayScale Delivers Where Other Compensation Providers Fall Short
PayScale operates the largest online salary database in the world. We allow organizations to price their jobs according to
their industry, location, and the employee skill sets which make their workforce unique. PayScale goes beyond supplying
the accurate data you need - we also give you the tools to efficiently manage your compensation projects, and the
knowledge to stay up-to-date.
Visit our blog: http://blogs.payscale.com/compensation/
Join our Group on LinkedIN: Compensation Today: HR Best Practices
Stacey Carroll, M.B.A, SPHR, CCP
Director of Professional Services & Education
PayScale, Inc.
Connect with me on LinkedIN: http://www.linkedin.com/in/hrstacey