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Total Compensation Management

Market Insights from Benchmark Research

Executive Summary

Total Compensation Management is a holistic approach to planning, administering and communicating across specific processes, using information and analytics with technologies in an integrated approach to the pay including the benefits, incentives, rewards that the workforce receives. Determining and providing the appropriate compensation for each person — whether it involves base pay, merit pay or variable pay, and incentives such as bonuses — is critical to attracting and retaining productive members of the workforce, whether full- or part-time employees, contingent workers or contractors. The complexities of compensation often prove to be a core challenge for HR departments as they strive to keep employees productive, satisfied and motivated while ensuring equitable and defensible pay practices across the workforce.

The processes and systems that support the crafting, management and administration of compensation plans typically take into account both external market factors and internal considerations. Some of these are broadly applicable while others are specific to level, role, job family, business area and geography. As organizations consider advanced practices, such as pay-for-performance, equity-based compensation and even non-financial rewards, many are finding they need a comprehensive and more strategic approach to compensation. As a result, what we call Total Compensation Management (TCM) is a priority for all organizations that seek to optimize their compensation processes and use all relevant information to maximize the value of, and return on, their budget allocated and paid.

 
 

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