PCM: Total Compensation System (2) (What's in the system? (Performance…
PCM: Total Compensation System (2)
What is a total compensation system?
A road map that details the company’s entire compensations package
Includes Direct Compensation Schemes
Includes Indirect Compensation Schemes
Serves to provide a systematic overview of the entire compensations system
How to ensure competitiveness?
Take note of internal equity
Compare external equity with market
What's in the system?
Performance Based Variable Pay
Long Term incentive compensation
Benefits and Flexible Benefits
Perks and non cash rewards
Why is a system needed?
Increases employee understanding and ease of explanation
Ease of comparison with industry
Ease to review and update
Provides a good image of the company’s compensation road map
Might be too overwhelming at first glance
Competitors might find out about confidentialities