"What is World-Class Compensation...and How Do I Achieve It?"

Most leaders of growth-oriented companies have large ambition. They are not looking for incremental change. They are seeking breakthrough results.  If you sit in meetings with these CEOs, you won’t hear things like: “Well, let’s look closely at our competition and see if we can mirror what they are doing, but maybe just a little better.” The idea is laughable. Instead they communicate and demonstrate an insatiable curiosity about what’s possible and where they want to take the company in the future.

World-class compensation is achievable.

Chief executives with this mindset want employees who will be true business partners; people willing to take ownership of the company vision and be accountable for its fulfillment. It would be antithetical, then, for these leaders to think in “average” terms when it comes to compensation—yet many do. The statement we laughed at a moment ago regarding “mirroring” what the competition is doing is commonly made by many CEOs when they speak about pay.  Accordingly, the way they compensate their people often communicates a message that’s at odds with their growth-orientation. As a result, pay ends up tugging employees in a strategic direction that is not compatible with the future company that’s been envisioned.

 World-class compensation is one that helps you achieve a Unified Financial Vision for Growing the Business.  It effectively frames the financial partnership with your best talent—those catalysts who will make the future a reality. It achieves this by creating “line of sight” between company vision, business model and strategy, employee roles and expectations and rewards. And it does so in a way that gives the organization a competitive advantage in recruiting and retaining the best people.

Great compensation strategies don’t emerge from random acts of pay plan development. They grow out of practices rooted in strategic thinking and sound design principles. There are key areas that demand an organization's focus and attention if world-class results are going to be achieved. And each of these categories require that a company incorporate proven principles and practices in the development of its pay strategies if world-class compensation is going to emerge. Following is a breakdown of the categories and some considerations that should be made in each. For a complete checklist of what should be done in these areas to secure a competitive advantage with your value proposition, download the checklist referenced at the end of this article.

World-Class Standards

Vision and Forecast

Does your company's compensation design process begin with a clear understanding of the shareholders' vision? Have you created a financial forecast of the future business that helps you envision company growth at various performance levels?


Do you have a written compensation philosophy statement? Do your employees understand your pay philosophy?


Do you have a clear recruiting strategy?  Does your value proposition enable you to recruit and retain premier talent? 


Do you perform periodic market pay assessments to ensure your salaries are competitive? Are your salary levels consistent with your compensation philosophy for guaranteed pay? 


Have you identified value-creation thresholds that need to be reached before value-sharing with employees occurs? Are your value-sharing plans aligned with your pay philosophy?


Are the benefits you offer competitive with market standards?  Do you have a suite of executive benefits that make your value proposition appealing enough to attract premier talent?


Have you built a Total Compensation Structure to view all compensation and benefit plans by class of employee? 


Do you market a future to your employees?  Do you have a systematic way of celebrating successes and reinforcing financial rewards throughout the organization?    

World-class compensation is achievable. Download the accompanying checklist to learn how.

Download a Checklist for Building World-Class Compensation

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