Why Manage Compensation?

Every employer needs to make pay decisions when (1) hiring new staff, (2) making salary adjustments, and (3) offering financial performance incentives. How these decisions are made has a direct impact on an organization's ability to:

• Attract and keep effective employees
• Avoid costly and damaging litigation
• Motivate employees to produce outstanding results
• Spend its payroll dollars cost-effectively

Pay plans are simply frameworks within which pay decisions are made. All employers, even those with as few as 10-15 employees, need a structured approach if they are to be able to optimally achieve the bullet points noted above. One additional benefit of a structured pay plan is that it reduces the amount of managerial time (and distress) involved in attempting to make pay decisions without guidelines.