Would you like to be more confident in the effectiveness of your pay programs? Is increased pay transparency making you feel unprepared to answer questions from managers and employees? Not getting the “bang for your buck” with your compensation dollars?
If you answered “Yes!” to any of these questions, you are in the right place.
Effective pay programs are fundamental to a company’s ability to achieve its business goals, attract and retain talent and ensure readiness for pay transparency and ongoing pay equity. From aligning your compensation philosophy with the business strategy to leveraging technology, there are five actions you can take today to enhance the value of your pay programs.
01
A well-articulated and updated compensation philosophy is essential for effective and aligned pay programs. Nearly three-quarters of Canadian respondents to WTW’s Pay Effectiveness and Design Survey said they have a formal compensation philosophy — though nearly half haven’t revisited it in more than three years.
Revamping your compensation philosophy ensures that it aligns with current business realities. An updated philosophy not only aides in delivering on core pay objectives, it also positions organizations to outperform their peers.
02
Base-salary structures serve as the foundation of compensation and HR programs. Key actions to consider include:
By fine-tuning these elements, organizations can ensure competitive compensation, reduce salary compression issues and cater to evolving company and market demands.
03
Ensuring that incentive plans are aligned with business needs is critical for motivating performance and achieving strategic objectives. Organizations should regularly review their incentive plan designs to ensure they support current business goals and encourage desired behaviors. This involves assessing the relevance of performance metrics, understanding current market trends and ensuring that incentive structures are competitive and effective in rewarding performance.
04
Communicating pay programs effectively to current and prospective employees remains a challenge. The results from WTW’s 2025 Pay Transparency Survey show that only about 50% of respondents have concerns about managers’ ability to explain compensation programs, and 53% are worried about employees’ reactions to learning more about these programs.
Organizations must take control of their pay narrative. This involves educating employees about their pay, enhancing transparency and aligning compensation messaging. By fostering a culture of openness, organizations can improve employee understanding, which leads to better attraction and retention outcomes.
05
Enhancing HR effectiveness through technology and skill development plays a crucial role in modernizing pay programs. Equipping HR teams with the right competencies and leveraging technology for better governance and administration allows organizations to streamline processes, gain valuable insights and ensure efficient program delivery.
Start with a rewards health check to assess the relevance of your current compensation philosophy and programs as well as their alignment with your organization’s needs. By creating a strategy to address key priorities, along with a timeline, you will design a roadmap for boosting the value of your pay programs.
