![]() It is having a stake in the company that will drive executive wealth and spur the best candidates to join you, but except for publicly traded companies, information about equity is not disclosed. In some cases, by the time the survey is complete, the data could be antiquated for a variety of circumstance Most executive compensation packages rely heavily on long-term incentive plans, but surveys mostly access information about base salary and bonuses. A survey is definitely a piece of the picture, but probably the most notable issue with executive compensation comparison surveys is that there is a discrepancy between the actual market reality and the timing of the information they can gather. That information is rarely discoverable in public records for privately held companies, and we know that staying true to a philosophy is fundamental to a successful search. Surveys also cannot screen for businesses with a similar compensation philosophy. Most survey companies do not look at their targets through those lenses. You may be looking at companies that are larger and wealthier than yours, with the idea that the knowledge and experience of such a hire from one of those organizations will get your company to that next level. Consider whether you want to recruit from a different industry, believing that such an expanded search might bring in a skill set that will benefit you. Surveys Many companies will hire a consultant to conduct a compensation survey, looking at other companies in your industry that are commensurate in size and (if it’s important) operating in your geographic region. ![]() One is based on surveys and the other is real time data. ![]() Compensation Data There are two basic ways to access current data about compensation within your field and in your part of the country. Questions to ponder are whether it’s important to: Align pay with your business’s annual and long-term performance goals Ensure your compensation program is justifiable and equitable in a competitive market Reward achievement, such as accomplishing specific objectives Consider how you’ll balance base salary with short- and long-term incentives Incorporate DEI values in your compensation scheme Maintain internal equity across similar levels in different functions Be a market leader, in the middle or follower with compensation for employees as compared to the competition Once you come up with a compensation philosophy that will drive your recruitment and hiring, stay true to it. There are many considerations as you establish a compensation philosophy. For example, does your organization believe that compensation drives performance or that performance must drive compensation? Does your organization place more value on best in class medical and retirement benefits? Those and many other theoretical positions will inform your compensation philosophy. Different businesses focus on a range of factors when establishing their philosophy. There are numerous considerations-not everyone’s viewpoint is the same. To ensure a successful search, you’ll focus on three priorities: Having a clear compensation philosophy Evaluating all compensation data Proactively setting compensation boundaries and planning Compensation Philosophy Your compensation philosophy will be your north star, keeping you on track to your goal. ![]() You want to position the role competitively vis a vis other companies to make sure you don’t lose your ideal candidate to someone else. Compensation is a major piece of the recruiting puzzle. Hiring the most talented and aligned person for the job and retaining them-a simply stated goal that is far from simple. Executive compensation is at the top of your list of considerations when your company is recruiting.
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