Compensation Planning Checklist

Purchase or access current compensation survey reports from reputable providers to benchmark against industry standards.

Define the set of companies and industries you compete with for talent to ensure accurate market comparisons.

Review cost-of-living and regional pay differences to determine appropriate location-based adjustments for each role.

Compare your total rewards package including health, retirement, and perks against competitor offerings in the market.

Research new pay practices such as pay transparency laws, skill-based pay, and flexible compensation models gaining traction.

Work with finance to establish the overall budget available for base pay, variable pay, and benefits for the cycle.

Decide the percentage of payroll to allocate toward merit-based salary increases across departments and levels.

Reserve a dedicated portion of the budget specifically for correcting internal pay equity gaps identified during analysis.

Ensure adequate budget is allocated to cover salary increases resulting from anticipated promotions during the cycle.

Model the financial impact of planned new hires, attrition, and role changes on the total compensation budget.

Present the proposed compensation budget to leadership for review, feedback, and formal sign-off before implementation.

Ensure all roles are properly classified within the job family framework and leveling structure before setting ranges.

Update minimum, midpoint, and maximum salary ranges for each grade level using the latest benchmarking data.

Establish clear policies on where employees should fall within their pay range based on experience and performance.

Outline the requirements and milestones employees must meet to advance from one pay grade to the next.

Cross-check proposed pay ranges against current employee salaries to identify and address any internal compression issues.

Create guides and presentation decks that help managers understand the compensation philosophy and communicate changes effectively.

Prepare clear and personalized letters or emails that explain each employee's updated compensation details and rationale.

Compile answers to common questions employees may have about the compensation review process, timing, and methodology.

Organize training sessions where managers learn how to discuss compensation decisions and handle employee questions confidently.

Define the steps employees and managers should follow to raise concerns or appeal compensation decisions after rollout.

Map out key dates for announcements, manager briefings, employee notifications, and payroll implementation deadlines.

Review applicable federal, state, and local pay transparency regulations to ensure all disclosure requirements are met.

Confirm that all proposed pay rates meet or exceed the minimum wage requirements in every jurisdiction you operate in.

Validate that all positions are correctly classified as exempt or non-exempt under applicable wage and hour laws.

Maintain written records explaining the business reasons behind each compensation decision to support legal defensibility.

Engage employment attorneys to review your compensation plan for potential legal exposures before finalizing and communicating changes.

Work with the payroll team to input all approved salary changes accurately and ensure they take effect on time.

Audit the human resources information system to confirm that all employee records reflect the correct updated compensation.

Monitor which managers have communicated compensation changes to their teams and follow up with those who have not.

Survey employees after the compensation cycle to gauge satisfaction with the process, communication, and outcomes.

Hold a debrief meeting with stakeholders to identify what worked well and what should be improved for the next cycle.