Lifestagecompensation & benefits
Best Practices in compensation & benefits
Compensation matters: Higher pay has been linked to stronger student outcomes [1].
Designing a competitive and equitable compensation system is a goal of many organizations. To do this well, assess equity in your current structures, articulate a core philosophy that anchors decision-making, and engage staff in discussion and decision-making.
[1]: Garcia E and ES Han. 2022. Teachers’ Base Salary and Districts’ Academic Performance: Evidence From National Data. SAGE Open, 12(1).
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Step
1
Articulate Your Compensation Philosophy
A compensation philosophy is a formal statement that documents an organization's position on compensation. It explains the "why" behind staff pay, and it can serve as a guide through the messiness of compensation design work. You'll use your compensation philosophy to attract, retain, and motivate team members. The philosophy is informed by stakeholder input and findings from your current state analysis (e.g. benchmarking, equity audit, etc.). If there are gaps missing in your understanding, take time to fill them in (focus group, survey, additional market benchmarking).
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To craft antiracist, equitable, and inclusive policies, prioritize input from historically marginalized employees without making them solely responsible for policy refinement. If specific groups are underrepresented, seek external input to enhance inclusivity.
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Step
2
Define Your Compensation Structure
Review different compensation structures (e.g., step-and-column, title-based pay bands, pay grades) and identify one that is most aligned to your compensation philosophy and supports your organization's long-term financial sustainability. You will iterate on the compensation structure alongside steps 3 and 4 as you evaluate the impact on your financial sustainability, equity, and organizational policies for setting and adjusting compensation.
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When designing your compensation system, analyzing its impact on different employee subgroups helps uncover potential disparities. Structures offering more management flexibility pose a higher risk of perpetuating inequities, which underscores the importance of scrutinizing bias potential in each design option.
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Step
3
Assess Financial & Equity Impact
Financial modeling includes mapping out the budgetary impact of the selected compensation structure in order to ensure that it is financially sustainable. To accurately assess the financial impact of your compensation model, you will need to articulate transition policies: how current staff salaries will be adjusted at the point of implementation. For staff whose salaries fall outside of the compensation model, some organizations may opt for a "hold harmless" policy in which no salaries are reduced. Considering how you account for this scenario requires careful consideration of all risks, including internal equity, legal requirements, and overall employee satisfaction. You should engage your finance lead in this phase.
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Performing an “Equity Impact Analysis”—a systematic examination of how race, gender, and other lines of difference might be by proposed actions—audit how the compensation design choice point decisions impact individuals and demographics subgroups, ensuring equity across the board.
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Step
4
Establish Equitable Compensation Policies and Processes
The compensation policies and practices your organization has in place can significantly impact the efficiency of the organization, as well as the employee experience, particularly with regard to equity and inclusion. When setting and adjusting staff salaries, thoughtful, well-crafted compensation policies and processes help ensure that your organization is efficient, consistent, legally compliant, and equitable.The absence of these policies can lead to unintentional inequities and employee dissatisfaction.
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Evaluate how each policy and procedure fosters equity and inclusivity within the workplace, ensuring that the policy creation process involves multiple equity assessments and engages a diverse array of stakeholders across various dimensions such as tenure, seniority, team, and parental/caregiver status.
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