Every year, your executive committee faces the same question: how much will we allocate in salary increases this year? However, you are proud of your teams and you would always like to give them a little more so that you never lose your best elements to your competitors. But when they are not framed in an overall compensation policy, salary increases cause headaches for all your managers for many weeks. How can we standardize the process and bring fairness to the file?

When establishing a competitive salary policy within an organization’s total compensation plan, three fundamental concepts must be considered:

  • External equity: you compare and adjust your overall compensation to that of other companies in your sector activity and/or your geographic region.
  • Internal equity: you weight and compare all the positions in your organization with each other in order to offer equitable management of all salaries awarded internally, depending on the degree of responsibilities of the positions.
  • Pay equity: you carry out the exercise of internal equity but instead of comparing all the positions in your company with each other, you compare equivalent female jobs and male jobs, which also allows you to comply with the Pay Equity Act.

Once this information has been collected, you have a clear idea of ​​the situation of your company in relation to its internal and external environments. Are you competitive enough? Are you dragging your feet? Can your company afford to significantly increase its payroll each year to retain its talent? A global compensation policy would allow you to have a clear strategic vision and position your company advantageously in its salary increase process. Little advice: start the process at least 6 months in advance…!


Médina Cayer

Managing Director, Co-Founder & Partner

Accredited professional coach & approved trainer

Certified management consultant

Recent articles