Many of you in HR or Compensation roles are preparing for the annual compensation planning cycle. This is the time of year when the annual merit budgets are decided and the progress on goals in your bonus plans are reviewed.

The communications you used last year are found in your files and you start your project planning. You touch base with Payroll and the HR Systems group, so they know what to expect when.

And you think about how much involvement managers have in the decision-making process. Do they have discretion on how to spend the merit budget or is it a formula?

Formula Example: Meets Expectations = 3% merit increase; Exceeds Expectations = 3.5% merit increase

Discretion Example: Merit Budget = $X; spend it across your 3 employees and differentiate based on their performance

And, of course, you determine how the LTI grants are going to be decided, approved, and delivered. What is the date of the board meeting where we ask for approval?

The performance management process is also aligned to the compensation planning process. So many meetings and stakeholders to involve and manage. Calibration meetings – love them or hate them?

I see you and know this is incredibly important work, because your employees are looking forward to the outcome.

Employees want to maximize their bonus payouts and LTI grants.

They want to have a big merit increase in comparison to the budget.

And the managers are going to need your help as they plan their conversations with employees.

Thanks for doing this work. And for managing all the details and expectations.

No one really knows the labor involved until you’re in trenches making the magic happen.

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