Performance and Compensation

One of the most complicated and frustrating issues that most senior leaders face is how to use pay practices as a way to improve company performance. The first comment that I will make is that there is no perfect system�if there was, then everyone would be using the same system and thousands of employee compensation consultants and experts would be out of work.

As I researched this article, one common thread came through in all my reading. A company must have a compensation strategy that is in alignment with the company�s strategic direction and goals.

The compensation strategy is the philosophy that guides specific compensation decisions. The components considered when developing a compensation strategy include base pay, incentives, benefits, working conditions, and opportunities for growth. Pay practices should be considered within the context of the overall compensation strategy.

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