The Best Compensation Plan for Your Firm
Source: Aquila Global Advisors, LLC
The following includes excerpts, reproduced with permission, from a white paper by August Aquila.
In his most recent white paper, “Challenges in Devising a Compensation Plan,” August Aquila outlines the benefits of and requirements for a well-devised compensation plan. According to Aquila, the right compensation plan will not only keep your current employees focused on company goals, but it will also attract new high-quality employees. Following are a few of Aquila's guidelines for creating the right compensation plan for your organization.
Checklist for developing a compensation plan:
- Define the job.
- Study and analyze the organization's general compensation structure.
- Research and analyze the current compensation patterns in the industry.
- Determine the compensation level.
- List all the important elements that make up a compensation plan and then provide for each one of them.
- Revise the plan based on the changes required.
- Implement the plan and provide regular follow-ups to make sure it is running smoothly.
Questions for company leaders to ask themselves as they create a compensation plan:
- What is the goal of the organization's compensation system?
- How will decisions regarding pay be made?
- What is the organization's desired market position relative to pay? Will the organization choose to pay market rates, above market or below market?
- What is the desired mix between benefits and cash?
- What does the organization pay for? Does it pay for performance or seniority or some combination of the two?
Aquila also discusses in detail development of a base-pay program, ways to determine rates of pay, and the role of performance appraisal in creating a compensation plan.
To receive a complimentary copy of the white paper “Challenges in Devising a Compensation Plan,” email August Aquila at [email protected].
From Aquila Global Advisors, LLC, www.aquilaadvisors.com