Fundamental Elements of a Total Compensation System
Identifies target market position for competitive pay levels and articulates the company s commitment to motivating, and rewarding employee contribution and performance through the various elements of the company s total pay system.
Pays for standard job duties, skills and results. Should be designed to reflect competitive rates for comparable jobs within identified marketplace.
Performance Based Variable Pay
Designed to reward achievement of specific company and/or individual performance objectives. Payouts vary based on company and/or individual achievement. Types of variable pay plans include:
Long Term Incentive Compensation
Designed to reward long term company performance. Individual job level/performance may impact eligibility to participate. Can be an effective retention tool.
Broad range of practices including health insurance, vacation, leave policies, and retirement and savings plans. Designed to address health and welfare needs of employees. Can send strong messages about company culture and values.
Perks & Non-Cash Rewards
Used to recognize exceptional contribution, performance, commitment to culture and values. Variety of methods including additional time off, tickets to events, trips, dinners, public recognition, etc.
Critical in retaining key talent.