Compensation management focuses on structuring and determining the appropriate pay and employee benefits in order to attract and retain your workforce. It's a critical domain for talent management in today's competitive market. Progressive compensation managers skillfully use direct and indirect compensation, such as health insurance, profit sharing, retirement benefits, wellness incentive programs, and other fringe benefits, to encourage employee motivation and keep them engaged.
Compensation management processes require the analysis of large sets of data across multiple profiles, positions, departments, and regions to:
- determine fair direct compensation and employee salaries and bonuses
- calculate fixed and variable pay
- track the performance and evaluate the employee
- determine pay equity and identify any possible pay gaps
- assure legal compliance with company guidelines and local governmental policies
- boost employee retention and attract new talent
- control budgeting and plan the compensation management program accordingly
Effective compensation management plays a crucial role in determining a company's success. An appreciated and engaged workforce won't hesitate to give back through increased performance and a positive atmosphere that benefits both the employer and the employees.