Compensation management planning is the process of managing, analyzing, and determining the salary, incentives, and benefits for employees. It can include everything from setting pay ranges to designing employee benefits packages. Typically, a company will create a compensation management plan for an overall human resources strategy.
There are a few key steps in designing a successful compensation management plan:
Compensation management planning is based on various factors, including work performance, position responsibilities, experience, and the job market. It’s also based on the company budget, determining how much money is available for salaries and wages. Compensation management aims to ensure that employees are compensated fairly and that the company’s expenses are kept in check.
As the market changes, a reasonable compensation management system is aware and can help attract and keep workers. It may also encourage staff members to stay with their organization.