Resources How-to's Support managers in making better compensation decisions


Support managers in making better compensation decisions

To help keep your compensation adjustments fair and effective in encouraging high performance, you need to give managers four key things:


Let's be honest, managing employee compensation is not an easy thing. To effectively manage compensation and rewards so they motivate high performance, managers need training on things like:

  • How pay affects motivation and engagement
  • Other ways to reward high-performance all year round
  • How to effectively communicate about compensation and adjustments to keep employees motivated and engaged
  • The basic elements of compensation and how to use them: pay scales, job codes, compa ratios, bonuses, stock options, variable pay, etc.
  • How and why you should consider compensation when conducting performance appraisals
  • What your compensation management process is, and their role in the process

Data to make informed decisions

To make informed decisions about compensation, managers need to know things like:

  • Your organization's philosophy and policies related to compensation. This includes things like: where employees should start on the pay scale; what is the preferred target in a pay scale (e.g., mid-point, 70th percentile, etc.); how do you deal with high performing employees who are already at the top of their pay range; are there groups or skills sets that need special compensation. etc.)
  • How much money do they have in their compensation budget?
  • What the pay scales are for the various job codes
  • The job codes that apply to their employees
  • Where does each of their employee's salary fall on the pay scale?
  • Are any of their employees considered high potential or a scarce skill?
  • Their employees' compensation history
  • Their employees' performance history
  • And most importantly, each employee's performance rating for the year


Compensation adjustments aren't something that should be rushed. Make sure you give managers sufficient time to do it right. That means making sure performance appraisals are completed on time (a clear, straightforward process with effective forms and support tools can help), training is completed, and managers have the data they need to make decisions - all in sufficient time to allow thoughtful consideration.


Managers need to know how employees in the organization feel about their compensation. Do they have confidence in the current process? Do they feel fairly rewarded and recognized? How do they perceive communication around compensation?

Understanding their employees' perspectives and attitudes can help managers improve their compensation management skills and make sure employees are effectively rewarded for their performance.

Read how others are using compensation to drive high performance

Learn how Pechanga Resort and Casino invested in training their managers to better distinguish among the various levels of performance, to better communicate about performance, and to make better pay decisions - and changed their whole culture to focus on high performance.

At UW Credit Union, they leveraged compensation best practices to sustain a high performance culture. They understand that great service begins with a committed, service-minded, performance-oriented and engaged workforce.

Success with Talent Management made easy. Experience it for yourself.

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