Salaries and Compensation
Policy and Strategy
Salaries, compensation, bonuses and incentives are directly related to the company’s business success – they link between the motivation of managers and employees in the organization and the desired business and financial results in the field and give rewards for the success, contribution and performance of the employees.
The salary and compensation issues in the company require comprehensive strategic thinking and precise planning, drilling down to the finest details, all in order to come up with the most appropriate, most effective incentive on the way to achieving the business goals over time.
It is important to remember that salary is money with emotions! Therefore, it is a critical issue for most people in the organization, regardless of seniority.
Compvision is one of the leading consultancies in Israel with unique expertise in leading Total Rewards processes in companies and organizations from all industries and sectors, addressing diverse needs, from planning and formulating strategy to implementation in the field through appropriate practical tools. We lead the process end-to-end, beginning with the initial data collection about the company, understanding the business strategy and goals, the organizational structure, the organizational culture and existing plans. From there, we continue to examine comparative data (benchmark), proposing alternatives for building a compensation policy with all its components, from assisting in decision-makers’ discussions and policy approval processes to designing an organized infrastructure for managing all salary aspects, including detailed implementation plans and tools for defining clear criteria and metrics for success. When necessary, we also assist our clients in the implementation, follow-up and control phase, to ensure long-term effectiveness.
We create a specially-tailored process for each customer, according to the existing data, the structure of the company, the nature of the activity, the strategy and the number of employees.
Compensation review processes
Compensation Review is a process that is regularly conducted in many companies. It is directly related to the budgetary and financial management of the company. Formulating a clear policy for the compensation review process enables informed management of the organization’s compensation budget; it enables making correct updates and effectively communicates the process and results to employees and managers.
The Compensation Review process involves making significant decisions requiring professional advice and guidance – the program needs to be tailored to the unique nature, financial data and specific data in each organization, including the frequency of the Compensation Review process, the criteria affecting the amount of the update and the factors involved in the decision.
We at Compvision offer a process based on years of experience in assisting organizations and companies. This is a structured, systematic process, from budget determination through to updating the employees’ salaries. As part of the process, we create and offer our customers a variety of unique, practical decision support tools which are helpful in their implementation in the organization.
Incentive programs and bonuses
Incentives, grants, bonuses, profit sharing and other programs are excellent tools and an opportunity to establish a direct and important link between company performance and employee activity and the desire to succeed, which also translates into actual compensation paid.
In our experience, when performance and incentives are linked correctly, this is a highly important step toward achieving business goals, increasing motivation among managers and employees, creating the correct balance between fixed and variable compensation expenses, increasing employee satisfaction and retaining the best employees over time.
At Compvision, we have already assisted hundreds of organizations, companies and thousands of managers in creating models for providing incentives and bonuses to employees, using a methodology that is specifically tailored to the organization’s needs and goals.
The process of supporting and building the incentive plan includes creating a comparison (benchmark) with commonly-accepted models in similar organizations in the market, defining a budget, prerequisites, caps and the potential for bonuses for the various executives. In addition, defining the parameters for payment, including the link between company results and employee performance. We design the model, present a simulation to understand the financial implications and also support our customers in the implementation stages, using practical tools.
Equity Compensation - Options and Stocks
Equity compensation is compensation derived from the expected future appreciation in the company’s value or from the change in the share price in relation to the set exercise price. The equity compensation plan creates the potential for significant compensation for managers and employees in the company in the event of long-term improved company performance.
Options, Restricted Shares, Restricted Shares Units, Performance Share Units, Phantom Units – are all common tools in stock-based plans. Choosing the appropriate compensation tools for each company has a great impact on the level of compensation, the value perceived by the employees, the percentage of dilution, the level of accounting expenses and more. Therefore, organizations should devote careful consideration to choosing the right compensation tools.
Structuring an orderly equity compensation plan makes it possible to link the compensation of managers and employees to the company’s success, create a convergence of interests between managers and employees in the company and shareholders, increase motivation to create value and increase company value, retain human capital in the long run and improve competitiveness of human resources.
We at Compvision specialize in creating equity compensation policies in organizations and companies and in building detailed, transparent plans for implementation and execution. Our support process begins with a review of commonly-used equity compensation tools in the market and their characteristics, including presenting the pros and cons for the company, assisting in selecting the compensation tools to be used, accurately defining all parameters in the program, identifying those eligible to participate in the program and quantities granted to them, including building an allocation matrix accompanied by detailed simulations and more.
Customized Compensation
The unique concept of “Individually-Customized Compensation” – a compensation package tailored to each employee – is based on the assumption that different people have different needs, different preferences and a different perceived value for the various components of Total Rewards.
The Total Rewards package of employees is directly linked to the level of motivation, commitment and the quality of employee performance, and hence the more a company succeeds in creating a correlation between employees’ preferences and needs for their salary and compensation mix, the more satisfied those employees are likely to be, more highly-motivated and more eager to remain in the company long-term.
Based on our many years of experience, we at Compvision offer a unique process, which begins with mapping the profiles of the various employees in the company, the structure of their current Total Rewards package and identifying the needs and preferences of employees. This is done with assistance from company management and the HR team. Next, we formulate a detailed proposal for a modular Total Rewards package, consisting of multiple choices, which can be offered to the various employees in the company.
