What Should Your 2023 Compensation Offering Include?
Every company’s pay strategy and accompanying value offer have taken on added significance in the past couple of years. Gone are the days when providing a fair salary, an annual bonus, adequate benefits, and a 401(k) plan will do. First, the economic lockdown taught business leaders that compensation is expensive, and if not approached effectively, can wreak havoc on cash flow, the P&L or both. Second, the Great Resignation taught those same leaders that they cannot take their employees for granted, especially top performers. Their people are constantly on the lookout for better opportunities and are willing to go elsewhere if their current employer's offer and experience do not meet their expectations. All of this has left most company heads with more questions than answers. The biggest one is this: “How do I create a value offer that attracts the talent I need and rewards the right kind of performance while simultaneously protecting the short and long-term financial interests of company owners?” With that question in mind, this month’s Growth Notes addresses the issues that should be front and center as you construct your organization's 2023 pay offerings.
12 New Approaches to Compensation
(Chief Executive Magazine)
In an unprecedented time for attracting and retaining talent, CEOs and CHROs are getting creative—from three-day workweeks at full-time status to paid mental-health days to raised wages. Here's what a dozen leaders told us they are doing differently. Read More>
Which is Better--Higher Salaries or Bigger Incentives?
That is a question every business struggles to answer. Some company leaders reason that paying salaries at the higher end of the market will attract the best people and therefore the company will perform better. Others are determined to tie compensation to results and so want a high percentage of employee compensation to be “at risk.” So is one right and the other wrong? Read More>
The Powerful Role Financial Incentives Can Play in a Transformation
(McKinsey & Company)
In our experience supporting hundreds of transformation efforts, generous and specific financial incentives are one of the most effective tools available for executives to motivate employees. In fact, companies that implemented financial incentives tied directly to transformation outcomes achieved almost a fivefold increase in total shareholder returns (TSR) compared with companies without similar programs. Read More>
The 3 "Habits" of Highly Effective Pay Plans
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Stephen R. Covey’s seminal work, The 7 Habits of Highly Effective People, defined “effectiveness” as achieving a desired outcome or result. The seven behaviors he introduced were designed to help individuals and organizations consistently achieve the results they targeted. The principles he taught were transforming…because they worked.
Effective pay development is rooted in these same principles. In other words, compensation plans are only effective if they produce and sustain the outcomes they exist to achieve. And that can only happen if organizational leaders clearly define what those outcomes are and then set in motion the right “habits” in their approach to rewards development and implementation.
VisionLink’s free report, The 3 "Habits" of Highly Effective Pay Plans, teaches how high-performing companies use their compensation strategies to ensure the achievement of their performance targets. These practices help those businesses attract premier talent, sustain success patterns, and create a culture of confidence. By any measure, those outcomes equal effectiveness.
Don’t delay effectiveness. Download our free report today!
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