Towers Watson reports that “only 46% of organizations agree that their business strategy and objectives inform their talent management and reward programs, while over one fifth (22%) disagree or strongly disagree.”
When it comes to making compensation decisions, your gut may have served you well to date, but are you confident it will support your organization and its strategic plan in the increasingly complex future? This may be a good year to make a resolution to evaluate your compensation program and transform your labor expenses into a strategic investment that yields greater return.
Should I evaluate?
So, is it time to evaluate your compensation program? Certain events often trigger organizations to decide to evaluate their compensation program. Events may include:
- Experiencing challenges recruiting and retaining talent
- Struggling to defend pay inequities and salary compression internally
- Entering or emerging from a period of immense growth or diversification
- Noticing other reward program offerings are undervalued
- Launching a new pay-for-performance program
- Implementing a new strategic plan that requires new talent to deliver results
How do I implement change?
If your organization fits into one of these categories, it may be time for you to pause and evaluate your current compensation program. Here are some ways to get you started on the evaluation process:
- Talk to the person or team that is responsible for recruiting. Ask them if you are able to attract the right talent, and if not, why? Ask about feedback that is received regarding compensation during the recruitment process.
- Gather information. If you don’t already, start to collect information from “exit interviews” to learn more about why people leave your organization.
- Conduct a skills inventory. Based on your strategic plan, confirm the type of talent you will need to deliver on the new plan; if it includes the addition of new or more senior-level talent, you may want to get a pulse on the market for this type of talent.
- Conduct an employee engagement or feedback survey. Find out what employees value the most about the employment experience.