Why Reasonable Compensation Comparator Groups Is Important to Compensation Consultants

The goal of this article is to explore the various reasons that remuneration consultant groups consider when selecting comparable comparator groups for compensation benchmarking. It examines the relative impact of the different criteria on the amount paid and the extent of the performance-based pay. It also looks at how the criteria affect the likelihood of a remunerative contract and the nature of these contractual arrangements.

What is a reasonable salary for an S corporation to pay a shareholder?

The goal of a group selection procedure in any organization is to eliminate any possible non-qualified alternatives. The goal of a company’s compensation program is also to remove all but the most qualified, most highly desired employees. In these endeavors, it is vital to ensure that the best, most desirable workers are chosen for the job. By examining how these workers fare relative to one another, the comparisons between them can be made to determine what criterion groups they most closely follow.

When performing this group selection process, it is important to recognize that this process can have both positive and negative consequences. The first and most obvious benefit is that the results can provide companies with a better understanding of the overall compensation system. The second positive consequence is the fact that this type of group selection process provides businesses with an opportunity to evaluate the comparative worth of their employees in terms of both salary and performance. If the business is interested in a compensation package that best meets both the needs of their existing employees and the company’s own expectations about the future, the comparison of performance data can reveal the exact salary ranges needed to keep the best workers in the best positions. Finally, it is very important to note that the group selection process is absolutely critical to the success of the company’s overall compensation system.

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