Does your compensation strategy work?

Most big organizations have the compensation strategy as they manage their compensation policies and compensation practices over the whole organization. But, does the compensation strategy really work in the situation, when the company faces difficulties?

During the economic boom, the life of the Compensation and Benefits Manager was extremely easy. The employees and managers expected the bonuses to grow year on year. And the bonuses did. They grew each year and everyone was in the mood, the growing bonuses are normal.

During several days, the story was over. The bonuses stopped to grow. They disappeared. For the team assistant. For the best salesman in the team. With no impact of any of them. End of story.

The top management was facing a difficult and dangerous situation, the best employees could be without any bonus as the bonus criteria were not met. In the honest world, the criteria were not met, the bonuses cannot be paid. But, in the real world, you are requested to do something for your best employees.

The compensation strategy did not work as it was not ready for the slow-down in the economic development of the whole economy and the organization. The top management had to solve the issue how to save the company and it had to solve the issue how to save our Human Resources and the top performers.

The top management did solve the issue as it decided usually about the changes in the bonus criteria as the employees were eligible for some bonuses. But HR did not usually help, it was not driving the whole effort and the communication towards employees. It was the top management, who saved the bonuses.

It is the lesson learned for HR. It has to improve the compensation strategy as it is ready for the unexpected situations, which happens. And the crisis like this one. It will definitely happen.