Request a Demo

Building a Raise Cycle Approver Chain that Gets Seamless Sign-offs

Jen Dewar
Feb 26, 2020 9:05:00 AM

Your raise cycles have a lot of moving parts. You want to make sure you can retain your top performers, while also ensuring pay equity and adhering to your budget. But the process has become very complex as multiple stakeholders chime in, and it often gets stalled waiting on approvals. There’s a lot of back-and-forth, which equates to a lot of late nights and last-minute edits for your team.

A streamlined raise cycle approver chain can help you get seamless sign-offs for your most controversial process, so pay increases will be right on schedule.

Tips to build a better raise cycle approver chain

Do a raise cycle post-mortem

Gather stakeholders and hold a post-mortem meeting for your last raise cycle. Discuss what went right, what went wrong, and what you can do differently for the next cycle.

Some questions to consider:

  • Do all stakeholders need to be involved in the next raise cycle? How many layers are necessary? Perhaps your CEO liked to be involved in individual compensation decisions when the company was smaller, but is creating a bottleneck now that the company has grown.
  • Did everyone have enough time to review adjustments and provide approvals? If approvals were late, perhaps stakeholders needed more time to collaborate, make their own adjustments, and provide approvals.
  • Did multiple versions of the same spreadsheet delay HR approvals, or did faulty spreadsheets delay Finance approvals? These could be signs it’s time to upgrade to compensation management software.

Plan your next raise cycle

Take what you learned from your post-mortem, and create a plan for your next raise cycle.

  • Assign roles: Determine who will view, edit, and approve sales during your next raise cycle, and which slates they will approve.
  • Set the timeline: Build out each step of your raise cycle, and when it should be completed. Include strategic adjustments from HR, merit increases from managers, and approvals from directors, vice presidents, and finance. You may even want to build in a bit of buffer time for some of these to run late, so that the rest of the cycle process doesn’t fall behind.
  • Allocate the budget: Determine how much budget you need for strategic adjustments to ensure pay equity and other company priorities. Hold back 5-10 percent for executives to make additional targeted and discretionary adjustments at the end.
  • Get buy-in: Run your plan by your stakeholders and get their buy-in for roles, timelines, and budget.

Communicate with stakeholders throughout the raise cycle

Strong communication throughout the raise cycle is crucial for getting seamless sign-off from stakeholders.

  • Communicate insights around strategic adjustments: Help your managers and other stakeholders—especially Finance—understand how strategic adjustments were calculated. Did adjustments need to be made due to more competitive salary bands? Were specific groups of employees being systematically underpaid? Were there regional or departmental differences that needed to be adjusted?
  • Enable managers to explain merit-based raises: Allow managers to explain the reasoning behind their recommendations so other stakeholders understand why they made those recommendations. This practice can also encourage them to think through adjustments in a more strategic manner.

Sample approver chain

Your approver chain will depend on your company’s size, hierarchy, and level of transparency. Smaller and flatter companies typically have fewer stakeholders. These companies may even be able to sit down in a conference room to knock out raise cycle recommendations in a day. Larger companies with more complex organizational structures may require more approvers to weigh in on compensation changes. In either case, pay transparency may play a role in a company’s approver chain. And, of course, variations in pay transparency may dictate who is privy to seeing compensation information and making recommendations.

A typical approver chain may include:

  1. HR: Provide strategic adjustments, including market rate alignment and compliance increases.
  2. Direct/Line managers: Provide merit-based adjustments that reward employee performance and retain top performers.
  3. HR or compliance: Make additional adjustments to ensure pay equity and adherence to compensation philosophy
  4. Directors: View, edit, and approve raise recommendations for their teams.
  5. Vice Presidents: View, edit, and approve raise recommendations for their teams.
  6. Finance: Triple-checks, audits, cleans up, and approves everything before it’s sent to Payroll.

It’s helpful to discourage stakeholders from making additional edits once they’ve submitted their edits and approvals. You want to avoid the situation where you roll up recommendations and send them to the next stakeholder on the approval chain, only to receive further edits from someone further down the line. This can get messy really quickly if you’re working in spreadsheets, as it could cause multiple stakeholders to make changes at the same time in different documents. It’s also downright frustrating for busy executives, and will likely delay the process.

Final thoughts

Raise cycles are typically considered a disruptive, painful process for all involved—but it doesn’t have to be that way. A well-thought-out approver chain can streamline your process, improve collaboration, and create a more strategic and efficient raise cycle. Create clear roles and timelines, get buy-in, and enable communication between stakeholders to make sure raises are on time.

raise cycle approver chains 2

Make raises painless

See how Compaas' built-in approval process helps streamline compensation cycles


Request a Demo

You May Also Like

These Stories on Compensation Cycle

Subscribe by Email