Total Compensation Evaluation

The Total Compensation Assessment encompasses a complete review of all aspects that comprise the scope of Compensation of an organization. These are some of the most relevant aspects of this environment:

I. Compensation Policies

It includes the revision and / or modification / creation of the current payment policies, both in positioning at the market level (p50, p75, mix, others) and in temporality (lead-lag 6-6, catch-up 3x) and others. In essence, the policies must be aligned with the strategic and business plan of the organization, sufficiently documented and with adequate follow-up, in such a way that sufficient and reasonable assurance can be offered that these policies, approved by the shareholders, are met. Also, the definition of such policies, in appropriate combination with market information, provides the desired positioning.

II. Internal Equity: Vertical and Horizontal

Internal equity refers to the differences between employees' compensation. Unlike external competitiveness or comparison with the reference market, it is related to comparisons between one employee (s) and another (s). Its basic pillars are the Job valuation and Performance evaluation.

On other hand internal equity has two aspects: vertical and horizontal. Vertical internal equity refers to whether the desired positioning of the high levels of the organization vs the low levels of the same is met, while horizontal equity refers to the differences between the remunerations among employees of the same level of charge assessment, either by performance evaluation and / or other components.

The result is expressed in quantitative indicators of adequate follow-up that allow to verify in time if progress is being made in this matter or if, on the contrary, it is stagnating or falling back.

III. Payment vs Results alignment

Is the level of payment of your organization correlated with the results obtained? To what level? This part of Total Compensation Evaluation has to do with the exploration and review of the incentive plans of the organization and its adequate adjustment to the strategies and policies of the company. As such, it involves in a classic case the revision of all systems of incentive plans (sales, executive, production, services, others) as well as the adjustment of design and governance to organizational requirements.
To obtain an adequate diagnosis, plans alignment to the organization is reviewed, the design of the roles in the corresponding plans, the associated indicators in each of said plans, the design of the pay mix, the type of system used, orientation in the short and medium-long term, performance measures used, among others.

At the government level of the plans, the control and monitoring systems are examined, the documentation and control over the plans and payments, the system of allocation and modification of quotas and goals, the communication of the incentive plans, the level of satisfaction with the same, among others.

At TMC, we provide suggestions for improving the plans in those areas where necessary and contributing to the redesign of the plans.

IV. Total Rewards and management of intangibles

Total Rewards consists not only in considering the tangible / financial compensation (salary, bonuses, benefits), but also in valuing any intangible element such as work-life balance, development and taste for the work that is done, among many others.

Total Reward reviews tend to optimize costs since they detect and contrast the tangible and intangible currently offered by the organization vs. the relative preferences of employees / collaborators or exchange preferences.

Likewise, Total Reward reviews contrast the tools used by the organization vs those that indicate the relative preferences, opening the analysis to the redistribution / optimization of costs with greater satisfaction on the part of the collaborators.

In the section on TOTAL REWARD AND TALENT RETENTION, you can see the pioneering mechanisms of TMC in the measurement of Total Rewards, as well as the adequate use of intangibles.