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Aligning Compensation Strategy with Business Strategy: A Holistic Approach to Organizational Success
Author: Dr. Amelia Hernandez, PhD, SPHR – Dr. Hernandez is a renowned organizational psychologist and SHRM-certified Senior Professional in Human Resources (SPHR) with over 15 years of experience consulting Fortune 500 companies on talent management and compensation strategies. Her expertise lies in designing and implementing high-impact compensation plans that drive business results.
Publisher: Strategic HR Solutions – Strategic HR Solutions is a leading publisher of HR management resources, known for its high-quality, research-backed publications and commitment to delivering practical, actionable advice to HR professionals and business leaders. They are widely respected for their commitment to evidence-based best practices in human resource management.
Editor: Michael Davis, SHRM-SCP – Michael Davis is a seasoned HR editor with over 20 years of experience in the field. He holds the SHRM-Senior Certified Professional (SHRM-SCP) credential and has a proven track record of producing clear, concise, and insightful articles on complex HR topics.
Keywords: aligning compensation strategy with business strategy, compensation strategy, business strategy, total rewards, talent management, employee engagement, performance management, pay for performance, strategic compensation, HR strategy
Introduction:
Aligning compensation strategy with business strategy is not merely a best practice; it's a fundamental requirement for sustainable organizational success. In today's competitive landscape, organizations must strategically manage their most valuable asset: their people. This requires a sophisticated understanding of how compensation can be leveraged to attract, retain, motivate, and engage top talent, ultimately driving the achievement of business objectives. Failing to align these two crucial strategies often leads to high turnover, decreased productivity, and missed financial targets. This article delves into the significance of aligning compensation strategy with business strategy, exploring its multifaceted aspects and providing practical guidance for effective implementation.
1. Understanding the Interplay Between Compensation and Business Strategy:
A robust business strategy defines an organization's long-term goals, target markets, competitive advantages, and the actions required to achieve its vision. The compensation strategy, in turn, should directly support these goals. For example, a company aiming for rapid growth might prioritize a compensation plan that attracts high-potential employees, even if it means a higher initial payroll expense. Conversely, a company focused on cost efficiency might favor a more conservative compensation structure. The key is creating a cohesive relationship where compensation serves as a powerful tool to achieve business objectives. Aligning compensation strategy with business strategy necessitates a thorough understanding of both, and the identification of clear linkages between them.
2. Key Elements of an Effective Compensation Strategy:
An effective compensation strategy goes beyond simply setting salaries. It encompasses a comprehensive approach to total rewards, including:
Base Pay: Establishing competitive base salaries that attract and retain talent within the relevant labor market.
Incentive Pay: Designing performance-based incentives (bonuses, commissions, profit sharing) that align individual and team performance with organizational goals. This is a crucial element in aligning compensation strategy with business strategy.
Benefits: Offering a comprehensive benefits package (health insurance, retirement plans, paid time off) that meets employee needs and enhances their well-being.
Employee Recognition and Appreciation: Implementing formal and informal programs to recognize and reward outstanding contributions. This goes beyond monetary rewards and strengthens employee engagement, further supporting the overall alignment of compensation strategy with business strategy.
3. The Process of Aligning Compensation Strategy with Business Strategy:
Effectively aligning compensation strategy with business strategy requires a systematic approach:
Strategic Planning: Begin by conducting a thorough analysis of the organization's business strategy, including its goals, objectives, and competitive landscape.
Job Analysis and Evaluation: Understand the key roles and responsibilities within the organization and assess their relative value.
Market Research: Conduct thorough market research to determine competitive compensation levels for similar positions.
Compensation Structure Design: Develop a compensation structure that aligns with the organization's business goals and market conditions, considering both fixed and variable pay components.
Implementation and Communication: Effectively communicate the new compensation strategy to employees to ensure understanding and buy-in.
Monitoring and Evaluation: Regularly monitor the effectiveness of the compensation strategy and make adjustments as needed.
4. Overcoming Challenges in Aligning Compensation and Business Strategies:
Several obstacles can hinder the effective alignment of compensation strategy with business strategy. These include:
Resistance to Change: Employees and managers may resist changes to the compensation system.
Lack of Resources: Implementing a new compensation strategy may require significant investment in time and resources.
Lack of Data: Insufficient data on market compensation and internal pay equity can lead to poor decision-making.
Poor Communication: Failure to clearly communicate the rationale behind the compensation strategy can lead to dissatisfaction and resentment.
5. Measuring the Success of Alignment:
Measuring the success of aligning compensation strategy with business strategy involves tracking key metrics, such as:
Employee Turnover: Lower turnover rates indicate improved employee satisfaction and retention.
Employee Engagement: Higher engagement scores suggest increased motivation and productivity.
Performance Improvement: Increased performance levels demonstrate the effectiveness of incentive programs.
Cost-Effectiveness: Analyzing the cost-effectiveness of the compensation strategy in relation to its impact on business outcomes.
Conclusion:
Aligning compensation strategy with business strategy is a critical process for organizational success. By strategically designing and implementing a compensation plan that supports the achievement of business goals, organizations can attract, retain, and motivate top talent, leading to improved performance and increased profitability. A proactive and systematic approach, combined with ongoing monitoring and evaluation, is crucial for ensuring the ongoing effectiveness of this vital alignment.
FAQs:
1. What is the biggest mistake companies make when designing their compensation strategy? Failing to adequately assess market competitiveness and internal equity.
2. How often should a compensation strategy be reviewed and updated? At least annually, or more frequently if significant changes occur in the business or labor market.
3. How can I ensure buy-in from employees when implementing a new compensation strategy? Through transparent communication, explaining the rationale behind the changes and addressing employee concerns proactively.
4. What role does technology play in aligning compensation strategy with business strategy? Technology streamlines processes, improves data analysis, and enables more effective communication.
5. How can I measure the return on investment (ROI) of my compensation strategy? By tracking key performance indicators (KPIs) linked to employee performance and business outcomes.
6. What are some common pitfalls to avoid when implementing a pay-for-performance system? Poorly defined performance metrics, lack of transparency, and insufficient training for managers.
7. How can I ensure fairness and equity in my compensation system? Through regular audits, robust job evaluation processes, and transparent salary ranges.
8. What is the importance of considering employee benefits when aligning compensation strategy with business strategy? Benefits are a crucial element of total rewards, influencing employee attraction, retention, and overall well-being, directly impacting business outcomes.
9. How can small businesses effectively align their compensation strategy with their business strategy, given limited resources? By focusing on key metrics, leveraging readily available resources (like online salary surveys), and prioritizing clear communication.
Related Articles:
1. The Impact of Compensation on Employee Retention: Examines the correlation between compensation and employee retention rates, highlighting strategies for reducing turnover.
2. Designing Performance-Based Incentive Plans: Provides a step-by-step guide to creating effective incentive plans that drive performance.
3. Market Analysis for Competitive Compensation: Explores various methods for conducting market research to determine competitive compensation levels.
4. Building a Total Rewards Strategy: Discusses the components of a holistic total rewards strategy, encompassing compensation, benefits, and recognition.
5. The Role of Compensation in Employee Engagement: Investigates the link between compensation and employee engagement, demonstrating the impact on productivity and morale.
6. Strategic Compensation Planning for Growth Companies: Focuses on the unique challenges and opportunities of aligning compensation with rapid business growth.
7. Addressing Pay Equity in Your Organization: Provides insights into identifying and correcting pay gaps based on gender, race, and other factors.
8. Legal Considerations in Compensation Strategy: Examines relevant employment laws and regulations affecting compensation practices.
9. Using Data Analytics to Optimize Compensation Decisions: Explores the application of data analytics to improve decision-making in compensation planning.
| aligning compensation strategy with business strategy: Compensation George T. Milkovich, Jerry Newman, Barry A. Gerhart, 2016-03-16 |
| aligning compensation strategy with business strategy: Strategic Pay Edward E. Lawler, Edward E. Lawler, III, 1990-08-31 Make Your Pay System Pay Off A comprehensive look at not only the choices surrounding the development of a pay system but also the pros and cons associated with each choice....Thorough. --HR Magazine In this seminal work, acclaimed compensation expert Edward Lawler III shows companies that the way they pay can be an important source of competitive advantage. He reveals how pay strategies that draw a clear connection between pay and performance can support an organization's strategic objectives by communicating unmistakably what that organization values most. Moreover, he examines a wide range of performance-based pay practices--from piecework incentive systems to merit pay and skill-based pay--to demonstrate how compensation systems can be tailored to fit a variety of business strategies and management styles. Both traditional and nontraditional pay strategies are examined, with special emphasis given to designing pay systems that support participatory management and other innovative practices. |
| aligning compensation strategy with business strategy: Aligning Pay and Results Howard Risher, American Management Association, American Compensation Association, 1999 In Aligning Pay and Results, fourteen compensation experts provide answers, techniques, and insights on the complex issues involved in incentive- and performance-based pay programs. With the practical help this book provides (in both the human and technical arenas), you'll have a good start toward creating a pay environment that energizes employees, encourages innovation, and fuels growth for years to come. |
| aligning compensation strategy with business strategy: Pay for Results Mercer, LLC, 2009-03-17 The numerous incentive approaches and combinations and their implications can be dizzying even to the compensation professional. Pay for Results provides a road map for developing and implementing executive incentives that drive business needs and strategy. It is filled with specific analytic tools, including tables, exhibits, forms, checklists. In addition, it uncovers myths in performance measurement strategy and design. Timely and thorough, this book expertly shows businesses how to drive their specific needs and strategy. Human resources and compensation officers will discover how to apply performance metrics that align with shareholder investment. |
| aligning compensation strategy with business strategy: Aligning Strategy and Sales Frank Cespedes, 2014-08-12 The best sales book of the year — strategy+business magazine That gap between your company’s sales efforts and strategy? It’s real—and a huge vulnerability. Addressing that gap, actionably and with attention to relevant research, is the focus of this book. In Aligning Strategy and Sales, Harvard Business School professor Frank Cespedes equips you to link your go-to-market initiatives with strategic goals. Cespedes offers a road map to articulate strategy in ways that people in the field can understand and that will fuel the behaviors required for profitable growth. Without that alignment, leaders will press for better execution when they need a better strategy, or change strategic direction with great cost and turmoil when they should focus on the basics of sales execution. With thoughtful, clear, and engaging examples, Aligning Strategy and Sales provides a framework for diagnosing and managing the core levers available for effective selling in any organization. It will give you the know-how and tools to move from ideas to action and build a sales effort linked to your firm’s unique goals, not a generic selling formula. Cespedes shows how sales efforts affect all elements of value creation in a business, whether you’re a start-up seeking to scale or an established firm looking to jump-start new growth. The book provides key insights to optimize your firm’s customer management activities and so improve selling and strategy. |
| aligning compensation strategy with business strategy: Aligning Human Resources and Business Strategy Linda Holbeche, 2009 New edition of best-selling classic by top HR thinker--an essential addition to your HR bookshelf--Resource description page. |
| aligning compensation strategy with business strategy: Effective Executive Compensation Michael Dennis GRAHAM, Thomas A Roth, Dawn Dugan, 2008-04-23 When it comes to creating an executive compensation program, it can feel like there’s little gray area between giving top performers too shiny a golden parachute, with exorbitant perks, and providing the company’s leaders with the incentive they need to continue doing their best. This book gives readers the techniques and understanding they need to design a rewards strategy that will motivate performers while benefiting the entire organization. Taking a careful look at the complicated state of executive rewards, this no-nonsense, practical guide provides readers with a complete methodology for motivating management to accomplish critical business goals. Eschewing a one-size-fits-all approach, the book uses case studies and examples to illustrate what factors should be considered—including environment, key stakeholders, people strategy, business strategy, and organizational capabilities—when designing a program that will benefit both their company and the people who fuel its success. |
| aligning compensation strategy with business strategy: People Strategy Jack Altman, 2021-04-08 Learn to unlock the potential of your employees and colleagues with this definitive resource for people management People Strategy: How to Invest in People and Make Culture Your Competitive Advantage provides readers with a powerful framework in which to develop high-performing teams, increase employee motivation, and use data to build an inviting and effective company culture. Author Jack Altman, cofounder and CEO of Lattice, an award-winning HR and performance management platform, shows you how to: Establish the values that will form the bedrock of your organization Develop feedback processes that help employees feel heard, supported, and equipped to succeed Monitor the breadth and depth of employee engagement in your company Use the data and insights created by your People Strategy to drive business results Perfect for executives, managers, and human resource professionals, People Strategy also belongs on the bookshelves of anyone with even an interest in how to develop, nurture, and unlock the potential of their employees and colleagues. |
| aligning compensation strategy with business strategy: Better, Simpler Strategy Felix Oberholzer-Gee, 2021-04-20 Named one of the best strategy books of 2021 by strategy+business Get to better, more effective strategy. In nearly every business segment and corner of the world economy, the most successful companies dramatically outperform their rivals. What is their secret? In Better, Simpler Strategy, Harvard Business School professor Felix Oberholzer-Gee shows how these companies achieve more by doing less. At a time when rapid technological change and global competition conspire to upend traditional ways of doing business, these companies pursue radically simplified strategies. At a time when many managers struggle not to drown in vast seas of projects and initiatives, these businesses follow simple rules that help them select the few ideas that truly make a difference. Better, Simpler Strategy provides readers with a simple tool, the value stick, which every organization can use to make its strategy more effective and easier to execute. Based on proven financial mechanics, the value stick helps executives decide where to focus their attention and how to deepen the competitive advantage of their business. How does the value stick work? It provides a way of measuring the two fundamental forces that lead to value creation and increased financial success—the customer's willingness-to-pay and the employee's willingness-to-sell their services to the business. Companies that win, Oberholzer-Gee shows, create value for customers by raising their willingness-to-pay, and they provide value for talent by lowering their willingness-to-sell. The approach, proven in practice, is entirely data driven and uniquely suited to be cascaded throughout the organization. With many useful visuals and examples across industries and geographies, Better, Simpler Strategy explains how these two key measures enable firms to gauge and improve their strategies and operations. Based on the author's sought-after strategy course, this book is your must-have guide for making better strategic decisions. |
| aligning compensation strategy with business strategy: Compensation, Organizational Strategy, and Firm Performance Luis R. Gomez-Mejia, David B. Balkin, 1992 |
| aligning compensation strategy with business strategy: The Compensation Handbook Lance A. Berger, Dorothy R. Berger, 2000-01-19 Straight answers to your compensation questions An A-to-Z guide to compensation strategy and design, Compensation Handbook, Fourth Edition, has been completely revised and updated to keep you on top of the important changes that have taken place in this area. Editors Lance A. Berger and Dorothy R. Berger have assembled articles by leading compensation practitioners to give you authoritative solutions to a wide range of specific compensation problems. This important new edition shares with you the best thinking on attracting and retaining outstanding employees in a tight market...executive compensation...computers and compensation...how to use a mix of compensation devices...and much, much more. |
| aligning compensation strategy with business strategy: The Sales Acceleration Formula Mark Roberge, 2015-02-24 Use data, technology, and inbound selling to build a remarkable team and accelerate sales The Sales Acceleration Formula provides a scalable, predictable approach to growing revenue and building a winning sales team. Everyone wants to build the next $100 million business and author Mark Roberge has actually done it using a unique methodology that he shares with his readers. As an MIT alum with an engineering background, Roberge challenged the conventional methods of scaling sales utilizing the metrics-driven, process-oriented lens through which he was trained to see the world. In this book, he reveals his formulas for success. Readers will learn how to apply data, technology, and inbound selling to every aspect of accelerating sales, including hiring, training, managing, and generating demand. As SVP of Worldwide Sales and Services for software company HubSpot, Mark led hundreds of his employees to the acquisition and retention of the company's first 10,000 customers across more than 60 countries. This book outlines his approach and provides an action plan for others to replicate his success, including the following key elements: Hire the same successful salesperson every time — The Sales Hiring Formula Train every salesperson in the same manner — The Sales Training Formula Hold salespeople accountable to the same sales process — The Sales Management Formula Provide salespeople with the same quality and quantity of leads every month — The Demand Generation Formula Leverage technology to enable better buying for customers and faster selling for salespeople Business owners, sales executives, and investors are all looking to turn their brilliant ideas into the next $100 million revenue business. Often, the biggest challenge they face is the task of scaling sales. They crave a blueprint for success, but fail to find it because sales has traditionally been referred to as an art form, rather than a science. You can't major in sales in college. Many people question whether sales can even be taught. Executives and entrepreneurs are often left feeling helpless and hopeless. The Sales Acceleration Formula completely alters this paradigm. In today's digital world, in which every action is logged and masses of data sit at our fingertips, building a sales team no longer needs to be an art form. There is a process. Sales can be predictable. A formula does exist. |
| aligning compensation strategy with business strategy: Compensation and Benefit Design Bashker D. Biswas, 2012-12-07 In Compensation and Benefit Design, Bashker D. Biswas shows exactly how to bring financial rigor to crucial people decisions associated with compensation and benefit program development. This comprehensive book begins by introducing a valuable Human Resource Life Cycle Model for considering compensation and benefit programs. Biswas thoroughly addresses the acquisition component of compensation, as well as issues related to general compensation, equity compensation, and pension accounting. He assesses the full financial impact of executive compensation programs and employee benefit plans, and discusses the unique issues associated with international HR systems and programs. This book contains a full chapter on HR key indicator reporting, and concludes with detailed coverage of trends in human resource accounting, and the deepening linkages between financial and HR planning. Replete with both full and mini case examples throughout, this book will be valuable to a wide spectrum of HR and financial professionals, with titles including compensation and benefits analysts, managers, directors, and consultants; HR specialists, accounting specialists, financial analysts, total rewards directors, controller, finance director, benefits actuaries, executive compensation consultants, corporate regulators, and labor attorneys. It also contains chapter-ending exercises and problems for use by students in HR and finance programs. |
| aligning compensation strategy with business strategy: The Talent Manifesto: How Disrupting People Strategies Maximizes Business Results RJ Heckman, 2018-12-28 Rethink Everything You Know about Managing Talent in Today’s Disruptive Landscape A Vice Chairman at Korn Ferry (KF)—the world’s largest talent advisory and executive search firm—RJ Heckman has helped many of today’s most successful companies develop talent-management strategies that ensure corporate success through good times and bad. Now, he shares his breakthrough methods with you. The Talent Manifesto reveals proven talent strategies and innovative recruiting and retainment methods gleaned from nearly three decades of consulting with the world's leading organizations. Heckman identifies the most common pitfalls in HR today and delivers an actionable program for avoiding them. He shows how to generate reliable data and use it to make the best decisions. He reveals all the game-changing HR strategies at your disposal and how to use them to drive superior business performance. As organizations across industries experience faster cycles of disruptive change, one factor looms above all others as a portent of their future success: whether they can recruit, develop, and retain top talent better and faster than their competitors. With The Talent Manifesto, you have everything you need to redesign your HR strategies, reshape perception of talent management, and measurably contribute to your organization’s ability to compete—now and in the future. |
| aligning compensation strategy with business strategy: Total Alignment Riaz Khadem, Linda Khadem, 2017-05-16 ALIGN YOUR BUSINESS FOR SUCCESS From overarching vision to individual competency scorecards, Total Alignment arms you with powerful concepts and tools to run a successful, efficient business. No matter what size or type of business you run, business strategy experts Riaz Khadem and Linda Khadem show you how to align your team and operations from the ground up and from the top down. Total Alignment is the result of innovative thinking, solid research, and thirty successful years of consulting experience with major companies. Whether your team struggles most with communication, accountability, or motivation, this book will help you inspire your organization to produce efficiently, engage in the company's vision, and hold each other accountable for solid, sustained progress. Implement these concepts and tools to gain coherence, strength, and value: • Measure and narrow alignment gaps in key areas of your business using the Alignment Survey • Plan for your company’s growth and measure it along the way with the Alignment Map • Define clear roles and responsibilities for each member of your team to ensure accountability with Accountability Assignment worksheets • Eliminate silos, inefficiencies, and redundancies with the one page management strategy • Set short- and long-term goals that add value to each branch of the company as well as the business as a whole Plus, gain access to easy-to-use templates to analyze your company’s alignment, including Business and Individual Scorecards, the Competency Worksheet, an Action Plan Commitment chart, and the Performance and Effort Indexes. |
| aligning compensation strategy with business strategy: A Guide to Human Resource and Operations Management Monica E. Oss, 2001 |
| aligning compensation strategy with business strategy: Compensation Barry Gerhart, Sara Rynes, 2003-05-02 `Gerhart and Rynes provide a thorough, comprehensive review of the vast literatures relevant to compensation. Their insights regarding the integration of economic, psychological and management perspectives are particularly enlightening. This text provides an invaluable tool for those interested in advancing our understanding of compensation practices' - Alison Barber, Eli Broad College of Business, Michigan State UniversityCompensation provides a comprehensive, research-based review of both the determinants and effects of compensation. Combining theory and research from a variety of disciplines, authors Barry Gerhart and Sara Rynes examine the three major compensation decisions - pay level, pay structure and pay delivery systems.Revealing the impact of different compensation policies, this interdisciplinary volume examines: the relationship between performance-based pay and intrinsic motivation; implications of individual pay differentials for team or unit performance; the consequences of pay for performance policies; effect sizes and practical significance of compensation findings; and directions for future research.Compensation considers why organizations pay people the way they do and how various pay strategies influence the success of organizations. Critically evaluating areas where research is inconsistent with common beliefs, Gerhart and Rynes explore the motivational effects of compensation.Primarily intended for graduate students in human resource management, psychology, and organizational behaviour courses, this book is also an invaluable reference for compensation management consultants and organizational development specialists. |
| aligning compensation strategy with business strategy: Strategic Reward Management Robert L. Heneman, 2002 Annotation Heneman (business, Ohio State U.) presents a series of readings on the management of a strategic reward system. He summarizes the different types of programs that exist, evaluates their strengths and weaknesses, and examines different styles of application. Discussion of how to make a careful fit between the rewards program and the business context, and the role of job evaluation in design contexts is included. Final chapters look at team pay, merit pay, competency pay, and pay system evaluation. Heneman did not make an effort to comprehensively cover the topic, instead writing on the issues that interested him. Annotation c. Book News, Inc., Portland, OR (booknews.com). |
| aligning compensation strategy with business strategy: Strategic Human Resource Management Jeffrey A. Mello, 2002 This text offers a truly innovative, integrative framework that examines the traditional functional HR areas from a strategic perspective. This text is organized into two sections. The first section, Chapters 1-7, examines the context of strategic HR and develops a framework and conceptual model for the practice of strategic HR. The second section, Chapters 8-14, examines the actual practice and implementation of strategic HR through a discussion of strategic issues that need to be addressed while developing specific programs and policies related to the traditional functional areas of HR (staffing, training, performance management, etc.). The integrative framework that requires linkage between, consistency among these functional HR activities, and the approach toward writing about these traditional functional areas from a strategic perspective distinguish the text from what is currently on the market. |
| aligning compensation strategy with business strategy: The Executive Handbook on Compensation Charles H. Fay, 2001 For more than fifty years, human resources departments have turned to HayGroup for concrete, practical advice on how to structure compensation programs. Also the authority behind leading books on compensation, HayGroup renders all others obsolete with this publication -- the new last word on compensation. The Executive Handbook on Compensation speaks directly to businesses' most important concerns, highlighting dramatic changes in the world of business over the past decade -- changes caused by the globalization of the economy, the diversification of the workforce, new work habits including flexible time and telecommuting, and organizational shifts that require that compensation packages maximize employee-employer partnerships like never before. The Executive Handbook on Compensation shows managers how to: -- Reward and retain key people -- Determine affordable, appropriate pay scales -- Evaluate employee expectations and boost morale -- Develop nontraditional and contingency-based compensation -- Use the latest electronic media to improve the way businesses document, evaluate, price, and plan jobs |
| aligning compensation strategy with business strategy: Human Resource Strategy Peter A. Bamberger, Ilan Meshoulam, 2000-02-15 Applying an integrative framework, the authors review 20 years' worth of empirical and theoretical research in an attempt to reconcile often conflicting conceptual models and competing empirical results. This book presents much of the relevant research in the context of the critical strategic decisions that executives are often forced to make with regard to human resource investments and developments. |
| aligning compensation strategy with business strategy: Pay Without Performance Lucian A. Bebchuk, Jesse M. Fried, 2004 The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance. |
| aligning compensation strategy with business strategy: Strategic Compensation Chris Ashton, Business Intelligence (Firm), 1999-01 Drawing on the experiences of leading international organizations, this book demonstrates how to align a company's compensation strategy to its business goals, and also to its employees' needs, aspirations and motivations. The report also reveals a detailed route map for ensuring the compensation strategy supports key corporate goals, step-by-step guidelines for linking pay and rewards to strategic management frameworks, and the strengths and weaknesses of performance pay applications. International case studies include: Unilever plc; Ericsson Inc; Nike; Bass Brewers; and Whirlpool Europe. |
| aligning compensation strategy with business strategy: The Complete Guide to Sales Force Incentive Compensation Andris Zoltners, Prabhakant Sinha, Sally Lorimer, 2006-08-07 A well-designed and implemented incentive program is an essential tool for building a motivated, highly effective sales force that delivers the results you need. Incentive programs are seductively powerful but complicated instruments. Without careful planning and implementation, they can be too stingy to motivate, too complex to understand, too quick to reward mediocre results, and too difficult to implement. The Complete Guide to Sales Force Incentive Compensation is a practical, accessible, detailed roadmap to building a compensation system that gets it right by creating motivating incentives that produce positive outcomes. Packed with hundreds of real-life examples of what works and what doesn't, this important guide helps you: Understand the value of building an incentive plan that is aligned with your company's goals and culture. Avoid the common trap of overusing incentives to solve too many sales management problems. Measure the effectiveness of your current incentive program, employing easy-to-use tools and metrics for pinpointing its weak spots. Design a compensation plan that attracts and retains successful salespeople, including guidelines for determining the correct pay level, the best salary incentive mix, the proper performance measures, and the right performance payout relationship. Select an incentive compensation plan that works for your organization -- then test the plan before it is launched. Set territory-level goals that are fair and realistic, and avoid overpaying the sales force or demoralizing salespeople by having difficult goals or not fairly assigned. Create and manage sales contests, SPIFFs (Special Performance Incentive for Field Force), and recognition programs that consistently deliver the intended results. Manage a successful transition to a new compensation plan and build efficient administration systems to support your plan. Filled with ready-to-use formulas and assessment tools and a wealth of insights from frontline sales managers and executives, The Complete Guide to Sales Force Incentive Compensation is your hands-on, easy-to-read playbook for crucially important decisions. |
| aligning compensation strategy with business strategy: Glass Half-Broken Colleen Ammerman, Boris Groysberg, 2021-04-13 Why the gender gap persists and how we can close it. For years women have made up the majority of college-educated workers in the United States. In 2019, the gap between the percentage of women and the percentage of men in the workforce was the smallest on record. But despite these statistics, women remain underrepresented in positions of power and status, with the highest-paying jobs the most gender-imbalanced. Even in fields where the numbers of men and women are roughly equal, or where women actually make up the majority, leadership ranks remain male-dominated. The persistence of these inequalities begs the question: Why haven't we made more progress? In Glass Half-Broken, Colleen Ammerman and Boris Groysberg reveal the pervasive organizational obstacles and managerial actions—limited opportunities for development, lack of role models and sponsors, and bias in hiring, compensation, and promotion—that create gender imbalances. Bringing to light the key findings from the latest research in psychology, sociology, organizational behavior, and economics, Ammerman and Groysberg show that throughout their careers—from entry-level to mid-level to senior-level positions—women get pushed out of the leadership pipeline, each time for different reasons. Presenting organizational and managerial strategies designed to weaken and ultimately break down these barriers, Glass Half-Broken is the authoritative resource that managers and leaders at all levels can use to finally shatter the glass ceiling. |
| aligning compensation strategy with business strategy: Ask a Manager Alison Green, 2018-05-01 From the creator of the popular website Ask a Manager and New York’s work-advice columnist comes a witty, practical guide to 200 difficult professional conversations—featuring all-new advice! There’s a reason Alison Green has been called “the Dear Abby of the work world.” Ten years as a workplace-advice columnist have taught her that people avoid awkward conversations in the office because they simply don’t know what to say. Thankfully, Green does—and in this incredibly helpful book, she tackles the tough discussions you may need to have during your career. You’ll learn what to say when • coworkers push their work on you—then take credit for it • you accidentally trash-talk someone in an email then hit “reply all” • you’re being micromanaged—or not being managed at all • you catch a colleague in a lie • your boss seems unhappy with your work • your cubemate’s loud speakerphone is making you homicidal • you got drunk at the holiday party Praise for Ask a Manager “A must-read for anyone who works . . . [Alison Green’s] advice boils down to the idea that you should be professional (even when others are not) and that communicating in a straightforward manner with candor and kindness will get you far, no matter where you work.”—Booklist (starred review) “The author’s friendly, warm, no-nonsense writing is a pleasure to read, and her advice can be widely applied to relationships in all areas of readers’ lives. Ideal for anyone new to the job market or new to management, or anyone hoping to improve their work experience.”—Library Journal (starred review) “I am a huge fan of Alison Green’s Ask a Manager column. This book is even better. It teaches us how to deal with many of the most vexing big and little problems in our workplaces—and to do so with grace, confidence, and a sense of humor.”—Robert Sutton, Stanford professor and author of The No Asshole Rule and The Asshole Survival Guide “Ask a Manager is the ultimate playbook for navigating the traditional workforce in a diplomatic but firm way.”—Erin Lowry, author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together |
| aligning compensation strategy with business strategy: Compensation Barry Gerhart, Sara Rynes, 2003-05-07 `Gerhart and Rynes provide a thorough, comprehensive review of the vast literatures relevant to compensation. Their insights regarding the integration of economic, psychological and management perspectives are particularly enlightening. This text provides an invaluable tool for those interested in advancing our understanding of compensation practices' - Alison Barber, Eli Broad College of Business, Michigan State UniversityCompensation provides a comprehensive, research-based review of both the determinants and effects of compensation. Combining theory and research from a variety of disciplines, authors Barry Gerhart and Sara Rynes examine the three major compensation decisions - pay level, pay structure and pay delivery systems.Revealing the impact of different compensation policies, this interdisciplinary volume examines: the relationship between performance-based pay and intrinsic motivation; implications of individual pay differentials for team or unit performance; the consequences of pay for performance policies; effect sizes and practical significance of compensation findings; and directions for future research.Compensation considers why organizations pay people the way they do and how various pay strategies influence the success of organizations. Critically evaluating areas where research is inconsistent with common beliefs, Gerhart and Rynes explore the motivational effects of compensation.Primarily intended for graduate students in human resource management, psychology, and organizational behaviour courses, this book is also an invaluable reference for compensation management consultants and organizational development specialists. |
| aligning compensation strategy with business strategy: The WorldatWork Handbook of Total Rewards WorldatWork, 2021-01-21 Equip yourself to manage, motivate, compensate, and reward everyone in this workplace revolution The future of work is here. From the shift to Millennials and Gen Z in the workforce to the advent of the Fourth Industrial Revolution and the Gig Economy, the world of work and rewards has significantly changed since the initial WorldatWork Handbook was published. Human resources and total rewards professionals need tools to equip them to manage a changing workforce. This completely revised second edition addresses the challenging and disruptive issues facing employers today and tomorrow. The WorldatWork Handbook of Total Rewards is the definitive authority on compensation and rewards from the leading global nonprofit organizations for professionals who are engaged in the critically important practice of total rewards. This book is a go-to resource for all business professionals and leaders who reward and create productive, committed and inspired workforces worldwide. Readers will learn the basics of rewards, along with a deep dive and high-level view of how rewards programs enable organizations to deliver on their brand promises and perform at their optimal level. Gain a thorough understanding of compensation and benefits, along with employee well-being, development, and recognition, all updated to address the realities of today’s workplace. Understand why the Millennial and Gen Z workforce requires a different value proposition, and how to meet their needs. Discover the tools and techniques you need to help you reskill and become a highly valued workforce contributor and leader in the digital era. Learn how to attract, retain, and engage talent by building a healthy workplace culture and employing unique incentives that drive high performance and loyalty. Technical enough for specialists but broad in scope for managers and HR generalists, this well-rounded resource belongs on the desk of anyone interested in organizational effectiveness. An indispensable tool for understanding and implementing the total rewards concept, The WorldatWork Handbook of Total Rewards, Second Edition is the key to designing programs and practices that ensure employee engagement and organizational success. |
| aligning compensation strategy with business strategy: Building High-Performance People and Organizations Martha I. Finney, 2008-06-30 Business success depends on employee innovation, drive, skill, endurance, and dedication. Engaged employees, studies show, provide tangible advantages to the organization like greater customer satisfaction and improved profitability. In contrast, the Gallup Organization has discovered that disengaged workers cost U.S. business between $250 billion and $350 billion each year. How do you engage employees and, in turn, create the high-performance organization? That's what this set is all about. From the latest theories on motivation to innovations in HR to methods to increase employee retention, it provides the essential insights and tools managers, leaders, and HR people need to find new ways to succeed—while keeping employees happy, productive, and loyal. Employees know that cradle-to-grave—or even week-to-week—employment security is a thing of the past, and that they are at the helm of their own career ship. Discerning consumers in the employment marketplace, they therefore seek employment opportunities that speak not only to their wallets and life circumstances, but also to their desire to find work that provides purpose and passion. How can employers meet these needs and create a team of engaged employees? That's a large question, and one that spans a spectrum of issues that includes career development, human resource management, and the alignment between individual and organizational goals. In these three volumes, leaders and managers will find answers. They feature articles, interviews, and reports from academics, psychologists, managers in the practical corporate world, and experts in career management. Despite what Donald Trump might say, work is personal, and the ways in which individuals navigate the organizational environment—and businesses organize to seek, attract, and retain the best employees—is of primary concern. That goes double in these turbulent times, when job security is at stake, cynicism rampant, and loyalty at risk. Building High-Performance People and Organizations connects the dots so employers can maintain a loyal, satisfied, and productive workforce. Volume 1: The New Employer-Employee Relationship looks at trends in demographics and the general business environment leading to and driving the concept of employee engagement. Volume 2: The Engaged Workplace: Organizational Strategies focuses on real-world organizational strategies to find, develop, and retain the best employees, with an emphasis on innovative practices in both the U.S. and internationally. Volume 3: Case Studies and Conversations features interviews with thought leaders in the entire landscape of performance management and employee engagement. Their insights will provide readers with the absolute latest thinking in their fields of expertise. Volume 3 also contains short case studies of companies that are pioneering high-performance cultures. |
| aligning compensation strategy with business strategy: Pay People Right! Patricia K. Zingheim, Jay R. Schuster, 2000-01-26 Widely recognized as the nation's foremost experts on pay strategies, Zingheim and Schuster offer up a nuts-and-bolts guide on how a company can use pay to create a win-win partnership with its workforce. Their advice is direct and specific and will help you tackle many of today's most critical business issues from attracting and retaining talent to motivating sales staffs to improving mergers and acquisitions. Charged with readily usable tools for successfully implementing pay change, Pay People Right! also contains numerous examples of how many top organizations are creating total rewards packages that engage people and enhance performance. |
| aligning compensation strategy with business strategy: The Strategy-focused Organization Robert S. Kaplan, David P. Norton, 2001 A Powerful New Approach to Performance Management from the Creators of the Balanced Scorecard In Today's business environment, strategy has never been more important. Yet research shows that most companies fail to execute strategy successfully. Behind this abysmal track record lies an undeniable fact: many companies continue to use management processes-top-down, financially driven, and tactical-that were designed to run yesterday's organizations. Now, the creators of the revolutionary performance management tool called the Balanced Scorecard introduce a new approach that makes strategy a continuous process owned not just by top management, but by everyone. In The Strategy-Focused Organization, Robert Kaplan and David Norton share the results of ten years of learning and research into more than 200 companies that have implemented the Balanced Scorecard. Drawing from more than twenty in-depth case studies-including Mobil, CIGNA, Nova Scotia Power, and AT and T Canada-Kaplan and Norton illustrate how Balanced Scorecard adopters have taken their ground-breaking tool to the next level. These organizations have used the scorecard to create an entirely new performance management framework that puts strategy at the center of key management processes and systems. Kaplan and Norton articulate the five key principles required for building Strategy-Focused Organizations: (1) translate the strategy to operational terms, (2) align the organization to the strategy, (3) make strategy everyone's everyday job, (4) make strategy a continual process, and (5) mobilize change through strong, effective leadership. The authors provide a detailed account of how a range of organizations in the private, public, and nonprofit sectors have deployed these principles to achieve breakthrough, sustainable performance improvements. Presenting a practical, proven framework steeped in rich case study experience, The Strategy-Focused Organization helps solve a universal management problem-not just how to formulate strategy, but how to make it work. Building on one of the most revolutionary business ideas of our time, this important book shows how today's leaders can shape their own companies to meet the challenges and reap the rewards of a new competitive era. |
| aligning compensation strategy with business strategy: Aligning Employees with the Organization's Strategic Objectives Wendy Robyn Boswell, 2000 |
| aligning compensation strategy with business strategy: HRM Strategic Integration and Organizational Performance Ashok Chanda, Jie Shen, 2009-08-06 Human Resources Management (HRM) has a very important facilitative and strategic role in organizational success. Several financial and non-financial performance measures of an organization are positively related to its levels of HRM Strategic Integration (HRMSI). HRM Strategic Integration and Organizational Performance develops a better understanding of strategic HRM and its impact on organizational performance. |
| aligning compensation strategy with business strategy: 2022 Sales Compensation Almanac David Cichelli, 2021-12-15 Now in its 8th edition! The 2022 Sales Compensation Almanac provides the latest trends, resources and insights into sales compensation solutions. Sales compensation is an important management tool, yet needs constant attention. Excellent designs one year may give way to necessary updates and revisions the following year. Sales compensation stakeholders, including executive management, sales leaders, finance and HR professionals, are often looking for specific resources, survey findings and publications to address sales compensation design and administration challenges. The Sales Compensation Almanac provides the latest research and resources in this space.Featured Sections: Sales Compensation Trends Survey, Sales Compensation Hot Topics Survey, Sales Compensation Multiyear Trends, Reference Guide to Sales Compensation Surveys, Sales Compensation Administration Vendors Guide, Sales Compensation Education Resources, Case Studies, Whitepapers, Articles Listing. |
| aligning compensation strategy with business strategy: The Art Of Alignment Art Johnson, 2021-02-23 Leading organizations worldwide are evolving from the idea of employee engagement to that of organizational alignment. More important in today’s virtual work environment, The Art of Alignment provides a roadmap to creating alignment to your mission and vision to distributed teams. Readers will discover the answers to: How bought in to the mission and vision are your employees? Are leaders across your organization aligned? How are your KPIs integrated into the organizational alignment? The Art of Alignment takes a data-driven approach to organizational alignment. When executives add PURPOSE to engagement, coupled with measurement, your organization will experience market-leading performance. By following the 9-Pillars approach to leadership, your organization can increase key metrics by as much as 28% with each percentage point improvement in alignment. The approach to organizational alignment is organized into four parts; how it can be measured, practiced and analyzed: Part 1 – Alignment is the Responsibility of Leadership Part 2 – The Nine Pillars of Alignment Part 3 – The Data-Driven Leadership Playbook Part 4 – The Scientific Leader - Where Data Science Meets Leadership Decisions By adopting a scientific approach to your leadership style, leaders are able to visualize how to improve employee engagement and performance. |
| aligning compensation strategy with business strategy: Work Disrupted Jeff Schwartz, 2021-01-07 If you only read one book on the future of work, Work Disrupted: Opportunity, Resilience, and Growth in the Accelerated Future of Work should be that book. The future of work swept in sooner than expected, accelerated by Covid-19, creating an urgent need for new maps, new mindsets, new strategies-- and most importantly, a trusted guide to take us on this journey. That guide is Jeff Schwartz. A founding partner of Deloitte Consulting’s Future of Work practice, Schwartz brings clarity, humor, wisdom, and practical advice to the future of work, a topic surrounded by misinformation, fear, and confusion. With a fundamental belief in the power of human innovation and creativity, Schwartz presents the key issues, critical choices, and potential pitfalls that must be on everyone’s radar. If you're anxious about robots taking away your job in the future, you will take comfort in the realistic perspective, fact-based insights, and practical steps Schwartz offers. If you're not sure where to even begin to prepare, follow his level-headed advice and easy-to-follow action plans. If you're a business leader caught between keeping up, while also being thoughtful about the next moves, you will appreciate the playbook directed at you. If you're wondering how Covid-19 will change how and where you will work, Work Disrupted has you covered. Written in a conversational style by Schwartz, with Suzanne Riss, an award-winning journalist and book author, Work Disrupted offers a welcome alternative to books on the topic that lack a broad perspective or dwell on the problems rather than offer solutions. Timely and insightful, the book includes the impact of Covid-19 on our present and future work. Interviews with leading thinkers on the future of work offer additional perspectives and guidance.Cartoons created for the book by leading business illustrator Tom Fishburne bring to life the reader’s journey and the complex issues surrounding the topic. Told from the perspective of an economist, management advisor, and social commentator, Work Disrupted offers hope--and practical advice--exploring such topics as: How we frame what lies ahead is a critical navigational tool. Discover the signposts that can serve as practical guides for individuals who have families to support, mortgages to pay, and want to stay gainfully employed no matter what the future holds. The importance of recognizing the rapidly evolving opportunities in front of us. Learn how to build resilience—in careers, organizations, and leaders—for what lies ahead. Why exploring new mental models helps us discover the steps we need to take to thrive. Individuals can decide how to protect their livelihood while businesses and public institutions can consider how they can lead and support workforces to thrive in twenty-first-century careers and work. Jeff's marvelous book is a roadmap for the new world of work with clear signposts. His insights will help readers discover opportunities, take action, and find hope in uncertain times. The ideas are fresh, beautifully crafted, and immediately applicable. This is not only a book to be read, but savored and used. —Dave Ulrich, Rensis Likert Professor, Ross School of Business, University of Michigan; Partner, the RBL Group; Co-author Reinventing the Organization |
| aligning compensation strategy with business strategy: Strategic Reward Management Robert L. Heneman, 2002-06-01 The contents of this book center around the management of strategic reward systems. In particular, the book focuses in on the following elements of managing a reward system: design, implementation, and evaluation. It is my belief that too much time is spent on the administration of strategic reward systems at the expense of these other activities that add more value than does administration to the organization. Moreover, it is very important to remember that the management of reward systems takes place in a larger context that must be accommodated when designing, implementing, and evaluating strategic reward systems. This larger context includes the business environment, business strategy, and compensation strategy. Elements of the environment include the internal environment (organizational structure, business processes, HR systems) and external environment (laws and regulations, labor markets, and unions). The collection of articles presented throughout the book is very concerned with the fit of strategic reward management with the business environment, business strategy, and compensation strategy. Research has clearly documented the importance of this fit to organizational effectiveness (Gomez-Mejia & Balkin, 1992). A practical illustration makes the point as well. Taco Bell was found guilty in a class action suit by current and former employees. In order to keep the number of labor hours low in a productivity formula used to grant bonuses to managers, employee time sheets failed to account for overtime hours by employees. Failure to pay attention to the legal context in designing, implementing, and evaluating a strategic reward program cost Taco Bell millions of dollars (Gatewood, 2001). Although all of the readings in the book focus in on the management of strategic rewards in the larger business context, the readings are organized by topical area. The selection of topics is simply based on my writing interests and do not reflect the entire domain of important topics in strategic reward management. |
| aligning compensation strategy with business strategy: Compensation Management Deb, 2009 |
| aligning compensation strategy with business strategy: Handbook of Industrial, Work & Organizational Psychology Neil Anderson, 2001-12-20 Work in the 21st century requires new understanding in organizational behaviour; how individuals interact together to get work done. This volume brings together research on essential topics such as motivation, job satisfaction, leadership, compensation, organizational justice, communication, intra- and inter-team functioning, judgement and decision-making, organizational development and change. Psychological insights are offered on management interventions, organizational theory, organizational productivity, organizational culture and climate, strategic management, stress, and job loss and unemployment. |
| aligning compensation strategy with business strategy: Building Sustainable Competitive Advantage Dhirendra Kumar, 2016-03-03 In Building Sustainable Competitive Advantage Dhirendra Kumar shows how the Enterprise Excellence (EE) philosophy is a holistic approach for leading an enterprise to total excellence. It does this by focussing on achieving sustainable significant growth in revenue and profitability, reducing the business cycle time, strategically managing the enterprise risk and focusing on the needs of the customer. There may be various organizations within an enterprise but they must all focus on meeting or exceeding customer needs. Therefore, EE is an integrated approach affecting every employee, every functional area and strategy within the organization. Enterprise risk must be identified, assessed and prioritized; developing a growth strategy proposal which leadership has to execute in order to achieve goals. As business leaders spearhead the efforts, they must minimize, monitor and control the probability and/or impact of unfortunate events and maximize the realization of opportunities. The achievements in Enterprise Excellence can range from greater cost efficiencies, improved market perceptions, fundamental changes to markets, to new product and service offerings. There may also be significant upgrades in skills, technology, and business strategies. The scope of Enterprise Excellence can also range from operations activities, to business functions, to overall organization and to the enterprise as a whole. Building Sustainable Competitive Advantage is a comprehensive reference book for practising professionals, teaching faculty, and students alike. |
ALIGNING | English meaning - Cambridge Dictionary
ALIGNING definition: 1. present participle of align 2. to put two or more things into a straight line, or to form a…. Learn more.
ALIGNING Synonyms: 146 Similar and Opposite Words | Merriam ...
Synonyms for ALIGNING: alignment, alinement, structure, system, orientation, distribution, layout, design; Antonyms of ALIGNING: disruption, disorder, confusion, upset, disorganization, …
Aligning - definition of aligning by ... - The Free Dictionary
To adjust (parts of a mechanism, for example) to produce a proper relationship or orientation: aligning the wheels of a truck. 3. To ally (oneself, for example) with one side of an argument or …
align verb - Definition, pictures, pronunciation and usage ...
Definition of align verb in Oxford Advanced Learner's Dictionary. Meaning, pronunciation, picture, example sentences, grammar, usage notes, synonyms and more.
Align Definition & Meaning | Britannica Dictionary
ALIGN meaning: 1 : to arrange things so that they form a line or are in proper position; 2 : to change (something) so that it agrees with or matches something else
What does Aligning mean? - Definitions.net
Aligning generally refers to the process of arranging or adjusting things in relation to each other along a straight line or in correct positions. It can also mean the act of bringing different …
Aligning - Definition, Meaning & Synonyms | Vocabulary.com
DISCLAIMER: These example sentences appear in various news sources and books to reflect the usage of the word ‘aligning'. Views expressed in the examples do not represent the opinion of …
ALIGNING | English meaning - Cambridge Dictionary
ALIGNING definition: 1. present participle of align 2. to put two or more things into a straight line, or to form a…. Learn more.
ALIGNING Synonyms: 146 Similar and Opposite Words | Merriam ...
Synonyms for ALIGNING: alignment, alinement, structure, system, orientation, distribution, layout, design; Antonyms of ALIGNING: disruption, disorder, confusion, upset, disorganization, …
Aligning - definition of aligning by ... - The Free Dictionary
To adjust (parts of a mechanism, for example) to produce a proper relationship or orientation: aligning the wheels of a truck. 3. To ally (oneself, for example) with one side of an argument or …
align verb - Definition, pictures, pronunciation and usage ...
Definition of align verb in Oxford Advanced Learner's Dictionary. Meaning, pronunciation, picture, example sentences, grammar, usage notes, synonyms and more.
Align Definition & Meaning | Britannica Dictionary
ALIGN meaning: 1 : to arrange things so that they form a line or are in proper position; 2 : to change (something) so that it agrees with or matches something else
What does Aligning mean? - Definitions.net
Aligning generally refers to the process of arranging or adjusting things in relation to each other along a straight line or in correct positions. It can also mean the act of bringing different …
Aligning - Definition, Meaning & Synonyms | Vocabulary.com
DISCLAIMER: These example sentences appear in various news sources and books to reflect the usage of the word ‘aligning'. Views expressed in the examples do not represent the opinion of …
