According to IBGE, half of the companies in Brazil close their doors within the first four years. This is a significant number that warrants several reflections. External factors such as the economic and political landscape certainly influence this situation. However, it is also necessary to look inward. And business management is among the most important issues to evaluate.
In this context, Strategic Compensation and Corporate Governance emerge as central themes for companies that want to persevere in this competitive market.
Understanding the best employee compensation solution, as well as the direction to take for managing a corporation, are crucial for surviving in unfavorable scenarios like today's.
Read also: The alignment between strategy and profit-sharing policy
But, what is corporate governance?
The Corporate Governance it is the system that regulates how the business is directed, as well as the relationships between the involved parties (partners, directors, employees, suppliers, etc.) with the company's objectives. It can be translated as:
- Processes
- Costumes
- Policies
- Laws
- Regulations
- Institutions
And what is strategic compensation?
The Strategic remuneration It is the combination of different types of compensation, divided between fixed and variable.
As the name itself suggests, it is strategic because it is a model that links the employee's extra compensation to the company's performance.
Download our step-by-step guide to creating a strategic compensation policy for free
With Strategic Compensation, it is easier to align business objectives with employees, retain talent, and better achieve intended results.
She can appear as:
- Competency-based salary (administrative and leadership positions)
- Supplementary pension
- Performance-based pay
- Goals and indicators: individual and team
- Shareholding
How can they influence each other?
Both models are extremely important for all companies. The big detail is that Corporate Governance and Strategic Compensation cannot exist separately.
Of course, you can establish only one of them in your business. But the expected results will be lower or even nonexistent.
From the moment the directions a corporation should follow are established, the objectives are aligned with the employees.
On the other hand, it is possible to define compensation to achieve such goals, closing a positive cycle within the company.
Let's go with an example to make it even clearer: imagine your company has transparency with its clients as one of its governance pillars. With that in mind, you could offer bonuses to employees who receive the best customer service ratings.
Did you see how Strategic Compensation and Corporate Governance can make a difference in your business?
If you have any questions, leave them in the comments, and we'll be happy to help!
