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Review Your Current Compensation Strategy

This is one of the steps you need to take in order to link your business strategy with your compensation strategy. Do a survey, get your employees’ feedback and be better than you were yesterday!

How to Link Business Strategy with Compensation Strategy?

In today’s competitive market, an effective business strategy must be in place in order to provide clear direction for companies to succeed and achieve the desired goals. On the other hand, a good compensation strategy helps companies in maintaining a competitive advantage over their competitors since it helps with attracting and retaining top talents who will drive those desired goals in return. Therefore, it is the key to align compensation strategy with business strategy; otherwise, it can be a challenge for the success of the company. Hereunder are three steps to link both strategies together:

1. Define and review business goals and objectives: This is the first step and it includes defining & reviewing the short, intermediate and long-term goals & objectives that the company desires. Objectives should be specific, measurable, actionable, realistic and time-bound in order to accomplish a particular goal.

2. Review current compensation strategy: Now once goals and objectives have been defined by using gap analysis the company will need to look into its compensation & benefits (C&B) strategy and see if it supports the specified goals & objectives. This can be done through market C&B survey as well as by asking its current employees how they rate their salary compared to others in the same level in a different company. By doing so, the company will know where it stands on the market and if their C&B strategy is effective. If it stands in a good position to attract, retain & engage top talents, then it needs to keep that strategy. If not, an action plan should be prepared to enhance the C&B strategy considering the overall financial situation of the company and the possibility of doing so.

3. Periodically review the link between business and compensation strategies: The last step is to review from time to time the link between both strategies and make sure it exists. Some indicators like monthly, quarterly and yearly business results can be a window to check that. In addition, employees’ turnover related to C&B as well as employee engagement survey’s results are also great sources of information to help strengthen that link. Being up to date with the changes on the market is a key to stand a better chance of maintaining a competitive advantage to achieve the desired goals.

How Is Artificial Intelligence Reshaping the C&B Landscape?

As employers look for new ways to hire and retain their best talents, they begin to use artificial intelligence (AI) as a way to attract and compensate their employees. In comparison to manual systems, AI provides more precision, fairness and accurate data that help company assess its current compensation and benefits strategy against other companies on the market; that is done in an automated, consistent and often less expensive way. AI also provides new insights and services in businesses that have a positive impact on reducing headcount and overall cost.

What Can We Expect of C&B in the Future?

With the constantly changing market and higher employees’ expectations, compensations and benefits are changing towards non-material trends. That includes broader concepts such as wellbeing, inclusion and diversity, corporate social responsibility, career development and flexible work policies. That being said, benefits are now being considered as a tool to attract, retain, develop and engage top talents at a work place.


Mohamed ABDELKAREEM, currently a Cluster Director Talent & Culture at Accor is senior HR Generalist and internationally certified as HR Manager, HR Consultant and HR Professional. He has worked in hospitality chains such as Hilton, Rotana, Millennium and currently works with Accor. He is interested in changing the way companies recruit and passionate about culture transformation and the involvement of artificial intelligence and machine learning in human resources.

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