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Learn more about variable compensation. We cover benefits, key elements, and real-world examples in driving performance.

As Leaders, we own the responsibility to provide appropriate compensation to our employees based on each organization’s unique situation. This article scratches the surface by noting a few best practices and pitfalls when determining appropriate market compensation for all levels of employees from Executives to Entry level workers.

One right answer does not exist. Each business is unique – combination of industry, sales process, lifecycle stage, level of profitability, and product/service offering all weigh into the establishing the “right” plan for your organization.

As HR leaders, you are typically expected to serve as a strategic partner to the CEO and Compensation and/or Talent Committee of the Board or the Board itself if this sub-committee does not exist, as in some smaller organizations.

While communicating pay changes is usually good news, for many managers there is stress associated with this activity, and rightfully so. Why is communicating about pay so hard?

Turnover at the executive level is high. This has placed greater emphasis on compensation packages that can not only attract but retain executives. One component of executive compensation packages getting increased attention is the long-term incentive.

Companies looking to hire at the end of the year need to face the fact that many currently employed candidates have earned bonuses that will be paid out between December 31st and March 31st.

Nearly every company in WorldatWork’s annual salary survey is planning modest salary increases for 2018. The average projected increase is 3%, the same increase for the past six years.

All non-profit boards have a fiduciary responsibility to approve “reasonable and not excessive” compensation plans and are able to be held personally liable for excessive compensation. As a board member, you can take an active role in keeping this on track and avoid issues with the IRS or bad media exposure.

Bottom line, executive compensation in non-profits needs to be competitive to attract and retain key talent! Overall, base salaries in the non-profit sector are competitive with for-profit companies, but there is still a gap in total cash compensation.