What is Compensation Planning?
Compensation planning refers to the process of designing and administering a company’s compensation program, which includes determining the salaries, wages, bonuses, benefits, and other forms of rewards that employees receive in exchange for their work.
Compensation planning involves analyzing market data to ensure that a company’s compensation package is competitive and attractive to potential employees, while also aligning with the company’s overall budget and financial goals.
The process also involves developing a compensation philosophy that outlines the company’s approach to pay and rewards, such as whether the company values performance-based pay or tenure-based pay.
Overall, compensation planning is a critical aspect of a company’s overall human resources strategy, as it helps to attract, retain, and motivate employees, while also ensuring that the company’s financial resources are allocated effectively.