Employee Compensation: How the Pros Do It

Compensation should be more than a strategy, it should be a shared philosophy where every member of an organization is considered. Whether you’re an executive, an HR compensation decision-maker, or a one-man HR department, one thing is for sure. Well, actually three. Here they are…


“Tie pay raises to great performance. Be consistent in assessing performance for everyone. Doing performance reviews (even very short ones) every quarter ensures that everyone has a chance to be considered for a raise on the same schedule. Incredible performers may still receive off-cycle pay raises. But this method ensures that the quiet BI analyst who churns out great work doesn’t get passed over for raises simply because no one assessed her performance regularly.” – Shawn Elizabeth Bridgeman on Quora

Pro Takeaway: Give everyone a chance to be considered for a raise on the same schedule. As underrepresented segments in the workforce continue to push for equality, we’ll see the good ol’ boy system phase out over time. In addition to Shawn’s advice, the pay-for-performance strategy ensures tenured employees don’t just get by with a little help from their friends and the true performers are compensated fairly. Enlist in a performance management process that assesses the alignment of corporate objectives and employee performance on a regular basis.

Tweet This: Try this if you’re stuck on how to properly compensate #employees:

Read more: The Pros and Cons of Tying Compensation to Performance Reviews


“Markets change therefore it is important to perform routine salary audits to ensure salary ranges reflect current compensation trends in a particular industry. How competitive are those particular jobs and what is the external market demanding?  Is it a growing or dying profession?  Failing to keep up with market competition can lead to loss of valuable employees.” – Patricia Lotich, Founder of Thriving Small Business

Pro Takeaway: Stay up to date on salary reviews through sites like Glassdoor and Payscale. Set up google notifications for salary trends, reports and statistics from sources like the Bureau of Labor Statistics to be delivered to your inbox. Scour the internet for the most relevant compensation data on the market, and consider surveying your employees as well!

Tweet This: How you can use @Glassdoor and @payscale to determine appropriate employee compensation:

See More: 5 Expert Opinions on Pay Transparency


“If you want to get it right, develop a compensation philosophy that is linked to your business strategy.  Then develop a base salary, annual incentive and stock option structure that supports this strategy.  And, to be consistent in the administration and have the program perceived as equitable, develop a performance management program.” – Stacey Hawley, Compensation Consultant on Quora

Pro Takeaway: Set benchmarks for raises in accordance to performance improvements across all functions. With the high rates of compensation misperception, employers can’t afford to get caught actually misallocating raises unfairly. In fact, 39% of employees in a Glassdoor survey believed their current pay was unfair.

Tweet This: 39% of #employees believe their current pay is unfair. Read how to fairly compensate employees:

Find Out: Are Employee Bonuses More Important Than Raises?

Enlist the help of a compensation management system to bring structure, automation and equity to your compensation philosophy. 

Download: Automated Performance Reviews Work Better

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