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Compensation

A4

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.