Base and Variable Pay

Strategic Total Rewards= Engaged Workforce

Total Cash Compensation

An effective total cash compensation program should accomplish three things.  
  • First, it should assist in attracting and hiring of the qualified and skilled employees you need. 
  • Second, the compensation program should direct employee efforts toward achieving the company’s strategic objectives, such as business development, profitability, safety and work quality.  
  • Third, the compensation program should insure the development and retention of a qualified workforce.  
Your complete set of compensation program elements, base pay and variable/incentive pay should be designed to work together with all other rewards offered employees to deliver a package that is clearly recognized by current and future employees as valuable and competitive.

Long-Term Success

Equitable and Competitive Base Pay 

Effective base pay plans should be built on a solid foundation, be equitable and be easy to administer. They must be carefully constructed and maintained to ensure employees understand how their pay is determined, perceive their paychecks as equitable relative to other employees and the job they perform and perceive their pay is competitive with that of others doing similar work across your markets. If employees view their base pay as inconsistent relative to effort and responsibility or they believe it to be under market value, they may become dissatisfied with their work situation, focus less on performance and seek employment elsewhere.  

It is vital that employees recognize their pay as fair, acceptable and consistent relative to the work they perform and the skill level, degree of effort, scope of responsibility, and the conditions under which they are performing their work. How do you accomplish this? 

At HAI we’ve solved this problem for hundreds of employers. First, we listen. We get to know your organization, where you compete, your most complex compensation concerns and the way in which you organize work. Our job evaluation process includes analyzing your organization’s jobs to evaluate and align them in a hierarchy that reflects how your organization utilizes each role and then validating that structure with your leaders. The job hierarchy reflects every job’s core requirements and groups all jobs into grade levels. 

 Next, our experts consider your pay philosophy and identify, gather and analyze relevant market data, establish pay ranges that are unique to your organization and founded on how you structure work, your philosophy of pay and the value of work in the markets in which you compete.  

Your Compelling Pay Story 

The more your employees understand about how their pay level is determined the more likely they will believe their pay is fair based on the work they do and competitive across markets where their talents are in demand. That means that an organization’s pay plan is never complete until the story is told, and the facts are understood. Telling the story of pay translates into job satisfaction. Pay transparency is one of the most effective tools for building trust, retaining and engaging your employees. Pay transparency doesn’t mean that you must publish your pay ranges. Pay transparency means that an organization delivers factual, clear and consistent communication about its pay practices and policies.

At HAI we partner with you to develop and communicate effective pay systems designed to drive your business forward and help you tell your story with pride and confidence. Own your Pay Story and make sure your employees have an accurate picture.


Variable Pay

There are many forms of variable pay plans. They may be based on individual or group performance goals, or solely on organizational performance or any combination individual, group or organizational outcomes. Generally, merit is a change in base pay based on the individual’s prior year performance while incentive pay (including commissions) may direct group or individual performance. Incentives are usually earned by achieving a target set for the future and are not incorporated into base compensation. Qualitative and quantitative goal or target setting is an important component for measuring achievement and should be developed during your company’s performance management process. 

Linking cash rewards to your organization’s strategies, culture, and business goals through carefully crafted performance plans and well-communicated pay practices help direct employee effort to higher levels of skill and performance – a win-win for the employee and the company. At Harrington & Associates, Inc. we take a holistic approach to employee rewards, helping you tailor your programs to your company’s unique circumstances and align all rewards with overall business strategy and philosophy.

"Our partnership with Harrington & Associates has been wonderful.  Over the years, we have engaged their services for several projects. 
In 2016, Harrington guided us through 
the design and implementation of an updated market-based pay structure that has been very effective.  With each engagement they ask questions, listen, understand our needs, and provide great results!" 
Gwen Geier, President
The Fund
Harrington & Associates is an official member of World at Work, SHRM, Melbourne Chamber of Commerce and GOSHRM.
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