A comprehensive compensation plan can guide your organization in its talent strategies, but a modern comp plan drives organizational success. Modern compensation planning is rooted in your company’s goals and uses pay as a lever to increase employee retention, engagement, and performance. Whether you’re creating a modern compensation plan for the first time or updating an existing one, these five steps will help you create a plan that sets your organization up for long-term success. Join PayScale’s Krystal Praast and Diane Schuman to learn how to create a modern comp plan from intention to implementation. Register for this webinar and you’ll learn about: -The importance of laying the groundwork for comp success -How to build market-based pay ranges -The path to successfully implementing your plan

1. 5 Steps to Building a
Modern
Compensation Plan
Diane Schuman
Customer Training Specialist
Krystal Praast
Compensational Professional II

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54 Million Salary Profiles
250 Compensable Factors
15,000 Positions 6,000 Customers 2,300 Skills
Hi, We’re PayScale!
www.payscale.com/cbpr

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Diane Schuman, CAPM
Customer Training Specialist
Krystal Praast, CCP
Compensation Professional II

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What are the benefits of having a comp plan?
Fairness Communication Alignment

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Elements of a Comp Plan
 Philosophy
 Strategy
 Guidelines (eg pay ranges)
 Policies
 Processes

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have done a market study in the past
year. 25% in the past six months
have no compensation structure
(ranges, grades, etc)
have a compensation strategy. 34%
are developing one.
Source: PayScale’s 2017 CBPR

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1. Lay the Groundwork

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Gain Buy-in From Executives

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Develop a Clear Compensation Philosophy
If You Believe Employees Are Your Most Valuable Asset…Pay Fairly
If You Have a Fast-Paced Organization…Examine Pay Frequently
If You Value Open Communication…Prove It
If You Give Your Managers Autonomy…Support Them

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Start Getting Your Jobs in Order

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2. Define Compensation
Strategy

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Where Do You Compete For Talent?
Industry: IT Services
Size: 200 EEs
Location: Seattle, WA
One Talent Market Multiple Markets
Industry: IT Services
Size: 10,000 EEs
Location: Seattle, WA
Industry: IT Services
Size: 200 EEs
Location: Seattle, WA

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What do you want to
reward?
How competitive do you
have to be?

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3. Select Market Data
Source(s)

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Comp Data Landscape for Employers
 Traditional surveys
 Industry surveys
 Data aggregators
 HRIS or internal data
 Government data
 Crowdsourced data
 “Scraped” data

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Traditional and Industry Surveys
Source: http://www.rsna.org/NewsDetail.aspx?id=14256

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Crowdsourced

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Make sure it covers your data needs
Breadth
Precision
Age
Ease

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4. Set Pay Guidelines

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Pay Guidelines
Range MidpointMinimum Maximum
$20,000 $32,000
$26,000
Green-Circled Employees Red-Circled Employees

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Pay Ranges vs. Pay Grades
Grade: Multiple ranges are
arranged mathematically, jobs
are assigned to grades
Range: A min, mid, and max
assigned to a job
MidMin Max
$20K $32K
$26K

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Assign Jobs to Grades
Match market value with nearest midpoint
Adjust for internal alignment

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Determine the Shape of Your Structure

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5. Implement the Plan

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The PayScale Pay Transparency Spectrum

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Develop Policies & Processes
Processes:
 Adding or evaluating a job
 Market Study
 Budget
 Increase cycle
 New hire process (pay)
 Promotion process
Policies:
 Increases
 New Hire
 Promotion
 Outliers
 Eligibility

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Immediate Actions
• Clarify business goals and priorities to align comp
• Identify culture aspects to amplify with comp
• Start tracking where you recruit from or lose people to
• Familiarizing yourself with data sources that cover your needs
• Build pay ranges for your top 10 jobs

29. You will get from Compference:
Product Sessions
Customer Presentations
Peer Networking
Breakout Sessions
Phenomenal Speakers
PHR/SPHR recertification credit
Ask about a discount code!

30. Comptopia: A PayScale Community
CONNECT with more than 700 like-minded compensation and
HR professionals
PARTICIPATE in an active discussions forum covering everything
from comp plans to current events
LEARN best practices and product tips from power users and
PayScale experts alike
EARN perks, points, and exclusive swag available only to
Comptopians
JOIN today—ask me for a link to sign up

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Questions?