The Compensation Depot Services
The Compensation Depot
Call Jim Johnson for more information
(Home Office) 831-609-6097 (Cell) 831-596-2344 
Email: [email protected]
This slide provides an example and high-level overview of a conceptual "Total Rewards" framework within which The Compensation Depot's consulting work is done.


Philosophy: We start each consulting project with a review of the company's compensation philosophy/policy documentation to ensure it clearly articulates WHAT the company pays for. Where the philosophy is missing or unclear we will work with internal staff and senior management to create or revise the documentation to ensure it is stellar. This step is crucial in ensuring the underlying compensation strategy and programs support the needs of the business.

Strategy: The compensation strategy defines "competitive". It specifies HOW the company pays in its efforts to ensure external competitiveness. The strategy normally specifies WHO the competition is by identifying a specific "comparator" group of companies with which it competes for talent. A well articulated strategy is essential to ensure support of the company's compensation philosophy and the goals of the business. (Note: It is important to reference the company's comparator group's practices, however, it is equally important to avoid the trap of becoming a "me too" company. You should always adopt pay practices that best serve your firm's best interests.)

Note: Reviewing a company's existing Compensation Philosophy and Strategy will typically add no cost to the project as these are necessary prerequisites for drafting a meaningful project proposal. The company will incur no charges until a proposal and project outline are agreed upon.


The needs and demands of various employee groups differ, therefore, most companies find it necessary to create and maintain more than one compensation program. For example most companies maintain separate programs for executives, hourly/production workers, sales, professionals and management. Professional and managerial programs may be further segmented into "technical" and "non-technical or administrative" with compensation programs designed to ensure each segment is externally competitive and internally equitable.

We generally work with senior management and internal staff at the outset of a project to assess the effectiveness and "pain points" of any existing compensation programs and recommend specific actions to address areas where revisions are needed. 

Note: A typical consulting assignment in a larger more established firm may involve only one compensation program whereas a start-up firm or small growing company may require the creation of a philosophy and strategy statement along with multiple underlying programs.


Most of the day-to-day work in the compensation function (and in the consulting support of the function) is involved in creating and maintaining the infrastructure underlying the various compensation programs. For example, the bulleted activities below are generally required to support each compensation program. Each activity also becomes more complicated for multi-national corporations.

Creating and Maintaining Processes, Rules, Methodologies, Policies and Procedures that ensure the programs' legality, accuracy, consistency and ongoing alignment with the company's philosophy and strategy over time

Salary Survey Administration: Sourcing, subscribing to, matching "benchmark" jobs and job levels and submitting accurate data to salary surveys administered by third parties - usually on an annual basis

Competitive Analyses: performing relatively sophisticated analyses to determine the competitive posture of each of the company's jobs within each compensation program (as well as the overall programs themselves) on an annual basis. (Note: fortunately, today most firms base their competitiveness solely on "market pricing" and forego the laborious and time-consuming practice of formal job evaluation, although concerns about "internal equity" continue to be addressed by utilizing formalized job-leveling charts (level-cutters) to ensure skill and responsibility levels are considered in establishing the "market price" of a job.)

Recommending Changes to each program based on results of the competitive analyses: These recommendations, of course, are mitigated by such factors as the firm's ability to afford the changes, the estimated salary/bonus/equity increase trend of competing firms and the company's future business plans and strategies

Salary/Bonus/Equity Increase Administration: This involves a number of factors such as determining and securing executive management's approval of salary increase/bonus/equity budgets, scheduling, communicating and administering individual employee performance appraisals, determining and securing approvals for individual and overall actual salary increase/bonus/equity amounts and ensuring approved increase amounts are delivered as planned.

Post-mortem Analyses: following the delivery of salary/bonus/equity increases a comprehensive analysis should be performed to determine if the actual results were delivered/implemented according to plan, and to identify "areas of improvement" for the next delivery cycle.


Businesses feel the pinch when a key compensation manager or professional position remains open for any length of time. If your organization has or is about to have such a vacancy please give us a call. We should be able to step in on a moment's notice and help keep things on an even keel until your vacancy is filled.

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