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How to build compensation planning grids that support managers

Hint:  It’s more than just filling in a number

Ask managers about their ideal compensation planning scenario, and they’ll describe an alignment of certain conditions. They want all pertinent information at hand. They want capacity for complex budgeting. And they want notifications to guide their progress.

At first blush, this vision may sound eminently achievable. But speak to a few more managers, and you’ll uncover an unhappy reality: Managers are not equipped with the tools they need for efficient compensation planning.

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Right data, right place

Compensation equations involve many factors: performance, potential, diversity, pay equity, departmental target pay guidelines, and more. It’s intricate, but it’s also not advanced calculus. Problems begin when the relevant data is not readily accessible or auditable. Without instant visibility into the relevant variables for a given employee, compensation planning takes more time and is less likely to comply with company guidelines.

Ideally, all relevant information should be embedded in managers’ comp planning grids. And when the system behind the grid is connected to pertinent performance data, it can ballpark salary and bonus recommendations to help managers respect company guidelines.

Sophisticated budgeting capabilities

Compensation budgeting is multifaceted and complex—and many platforms lack the flexibility to accommodate. Some software only recognizes a single overriding budget without providing for departmental variations. Some do not accommodate budgets that have separate pools for raises, bonuses, or other variable compensation. That leaves managers to do the math themselves—an inefficient process with room for costly human error.

Optimal comp planning involves planning grids that support complex budgets, including accommodations for department-specific requirements. It’s best when managers can also see budgets allocated to each comp category in their department, as well as running totals for tracking how their recommendations impact the big picture.

Budgeting guardrails and alerts

It can be difficult for managers to focus on the global budgeting landscape while juggling the minutiae of individual salary calculations. Planning grids should raise the alarm when a recommendation falls above or below budgeting guidelines. Even better, they should disallow managers from entering out-of-bounds amounts. While some controls are possible with spreadsheet-based planning systems, others are less likely to work in that format.

Compensation planning is smoothest—and most aligned with organizational guidelines—when it’s powered by supportive systems, including effective planning grids. Want to learn more about Decusoft’s compensation planning solutions? Get in touch today!

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