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What Do You Perceive To Be The Biggest Compensation Issue/Problem area in 2004
04/04
CRi
Upper Saddle River, N.J. - April 2004 - During the month of March, Compensation Resources, Inc. surveyed 177 companies to extract data on the biggest compensation issues/problems perceived for 2004.
Our survey showed that 21% of the respondents indicated that executive compensation would be the biggest compensation problem in 2004. This may suggest that with all of the recent corporate governance issues making headlines, companies are increasingly becoming worried about how their executives continue to be compensated. Our survey results also show that 20% of our respondents indicate that base pay administration is one of the biggest compensation issues perceived for this year. Consistent with this belief, IOMA’s Report on Salary Surveys states that companies indicated their biggest compensation problem is being allotted a small merit budget and then being able to compensate good performers with it. Base salaries are the foundation of the total compensation program, and for most employees, they represent the largest component of total compensation. Merit pay is very important because, for most salaried employees, it is the embodiment of “pay for performance.” Most employees want to be paid based on their performance and merit pay is the traditional vehicle for accomplishing this.
Recognizing and Managing the Biggest Compensation Problems
A Company's apporoch to these important issues does not just affect employee morale and performance, it can also impact the company's competitive position in the marketplace. The top managmenet of a company must be able to recognize that compensation issues do exist within the company and understand that solving these issues will ultimately take a well-designed strategy and considerable amount of time.
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