Compensation review cycles have a lot of moving parts and always seem to take longer than you expect. But when you have employees who are eagerly anticipating pay increases, you kick into high gear to get things done. This often equates to late nights—and a lot of coffee.
Run a more efficient, strategic compensation review cycle in 2023 with some additional planning and foresight. A comprehensive compensation cycle timeline can help.
Every organization’s timeline will differ, based on things like the size of the organization, the number of stakeholders, and what's in your HR tech stack. Here are some activities you may want to incorporate into your compensation cycle timeline:
Smaller companies may be able to book a conference room or a day-long Zoom and knock out a raise cycle fairly quickly. Larger organizations, however, may need several weeks or months to plan and run their compensation cycles. You should also account for holiday schedules, vacation plans, and other initiatives as you plan out your timeline. Here’s a sample timeline to help you start thinking about your own:
Year-round: Evaluate performance management and compensation management software
April 1: Compensation cycle post-mortem [the best time to do this is immediately after you run a compensation cycle, but it’s never too late to consider improvements on your process]
October 3: Define and assign roles
October 3-14: Update salary bands
October 17-28: Run a compensation analysis and build your salary increase budget
October 31: Request salary increase budget from finance
November 18: Get final budget from finance
December 5: Allocate the budget
December 16: Get stakeholder buy-in
January 4-6: Provide stakeholder training
January 9-18: HR makes strategic compensation adjustments and managers conduct performance reviews
January 18-27: Direct/Line manager merit-based adjustments
January 30-February 8: HR or compliance adjustments
February 8-17: Director-level approvals
February 20-28 VP-level approvals
March 10: Finance approves; sends to Payroll
March 20: Share results with employees
April 1: New compensation becomes effective
Compensation cycles can be stressful, but a little foresight and planning can go a long way in creating a smoother process for everyone. Planning your timeline and getting buy-in from key stakeholders can help you keep everyone on track and accountable for their deliverables.
Investing time now in evaluating and implementing compensation management software can ensure a more efficient review cycle that saves valuable time for your stakeholders.
With the right solution, your compensation analysis will be completed faster. Approvals will be faster and easier to audit and won’t get mucked up in spreadsheets. Exports to payroll will make for seamless updates. And compensation letters will be easier to administer and share with employees. Each of these improvements in efficiency can compress your timeline significantly and ensure pay increases are right on schedule.
See how Varo ran a compensation cycle in two weeks with Compaas.