Compensation
Establish a compensation, benefits, and incentive system based on job families and the performance evaluation system.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Compensation at each level of maturity.
- 1Initial
- Practice
- Pay only fixed salaries.
- Outcome
- Employees are compensated by their fixed salary only.
- 2Basic
- Practice
- Hold discussions between employees within the IT function and line managers to determine fixed and variable salary components.
- Outcome
- The motivating aspects of variable compensation are generally ensured, though typically variable salary may not be linked to the formal performance review process.
- Metric
- % of employees with variable components within their salaries.
- 3Intermediate
- Practice
- Base a range of fixed and variable salary components on the employee's current work position and qualification (job families), and career level.
- Outcome
- There is consistency and transparency of fixed and variable compensation across IT and some other business units.
- Metric
- % of job families with associated salary ranges.
- Practice
- Link variable compensation to performance against individual goals.
- Outcome
- There is identification of performance enhancing goals for employees.
- Metric
- % of salary that is related to compensation for achieved goals.
- 4Advanced
- Practice
- Take regular decisions to match pay, under pay or over pay compared to the market.
- Outcome
- The salary policy is effectively positioned within the market.
- Metric
- # of decisions taken on salary per specified time interval based on market positioning.
- Practice
- Link variable compensation to individual, team, and organization-wide performance and the career level, to ensure retention and incentivizing of performing employees.
- Outcome
- The compensation system is targeted at the retention of high-performing employees.
- Metric
- % of employees with variable compensation linked to individual, team, and organization-wide performance.
- 5Optimized
- Practice
- Continually monitor compensation management regarding the ability to retain high-performing employees.
- Outcome
- There is transparency on the effectiveness of compensation management.
- Metric
- Churn rate (comparative to industry norms).
- Practice
- Survey the market with respect to industry-wide average compensation.
- Outcome
- Detailed information is available on the strengths and weaknesses of the compensation system and the means to optimize it.
- Metrics
- # of publications screened.
- Amount spent per employee on market survey activities.