Building Blocks for Driving Business Results
Building Blocks
September 21, 2018

There are numerous perspectives on how to successfully drive business results. One to consider is employee compensation. Effectively leveraging compensation for employees can incent employee performance and align it with the goals you are trying to achieve. In this context, the three building blocks for driving business results include an organizational pay strategy, understanding the market, and accurate job descriptions and clear employee goals.

Pay Strategy

A sound pay strategy can drive your business results as it links employee pay to your business strategy. If done correctly, a pay strategy is the foundation for designing all elements of your compensation program. Think of it as your reference point as you decide how to set your compensation program. Just as important, it can be integral for attracting, motivating and retaining talent.

A pay strategy addresses questions such as:

  • How do we want to align with the market?
  • Is internal equity essential?
  • Does performance determine pay levels and/or does longevity?

The output of a pay strategy includes such examples as a pay range structure, short- and long-term pay programs, reward and recognition programs, premium pay programs and skill-based pay.

Understanding the Market

The basis for understanding the market is having access to reliable and credible, third-party market data. This can be accomplished through the investment in salary surveys that are inclusive of your organization’s jobs or enlisting the assistance of a human resources consulting firm.

Once this first step is achieved, the focus is to match the jobs that exist in your organization to the survey jobs. Having up-to-date job descriptions makes that step that much easier. The pay strategy, described earlier, determines how you interpret the data. For example, choosing if you want to set pay levels below, at or above market. From there, the most basic approach is comparing employee pay against the market data to determine competitiveness.

Ideally this analysis takes place regularly and the findings of the analysis help determine a budget to address any issues. Critical factors such as turnover, hard to fill jobs and employee performance can guide how to spend your budget dollars.

Job Descriptions and Clear Goals

Job descriptions come in a variety of formats. Ultimately, accurately reflecting the job-related data is most important. Job descriptions have several purposes:

  • As stated above, they function as a reference when comparing jobs to the market
  • For attracting, screening and the placement of qualified candidates into jobs
  • Communicating job expectations to employees
  • Establishing clear goals within performance reviews

Organizations who value pay for performance rely heavily on this last bullet to make their pay decisions and reward their high performers.

What is your perspective? Leave a comment or get in touch to let us know your thoughts.

Melissa Gallaway

Melissa Gallaway


Melissa Gallaway is a KardasLarson Consultant with Compensation and Human Resource Generalist experience within healthcare, insurance, and other industries.


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KardasLarson is a human resources and business consulting firm that maximizes employee performance so people and organizations prosper.



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