I had an opportunity this morning to address some of my professional peers and colleagues who wanted to chat about the current trends in total rewards (aka total compensation).  It was the second request in as many days regarding this top so I thought I'd jot down some brief and salient points from my talk...

First, while some fun and sexy things are being done with compensation it is still crucial to do the basics well.  You can be confident that your organization is ready to think about advanced compensation programs when:

1. Your organization's job descriptions are up-to-date, adequately describe the scope of responsibilities and related tasks, and contain relevant details on the education, skills, and other attributes that the job demands.  If I see another 'must be an excellent communicator' line in a job description I'm gonna hurl!  Be specific in stating what is needed.
2. Your organization has a credible job evaluation program that is directly tied to the organization's objectives in some measurable way.  The days of 'Bob's doing a great job' have passed.  Specific objectives, specific milestones, and actionable plans are needed in order to be credible.
3. Your organization is in compliance with the Pay Equity Act -- you aint' there if your organization doesn't have up-to-date job description, a method for formally evaluating job content, a real honest-to-goodness pay line, and the ability to produce the reports the Commission is now requiring under their new enforcement regime.  If any of this is missing it is time to get busy on your compensation system development and maintenance.

If your organization has all of the above well in hand then trying to do something 'trendy' and value-added with compensation is open for discussion.

According to the 2009 Mercer Compensation Report (see my briefcase for a copy) the trend for companies to shift a bigger portion of the compensation pie into short-term incentive programs.  A perennial observation in trend studies but the magnitude of the response of companies reworking their STI plans was notable (37%).  My impression based on feedback from clients and my professional students are that they are using STI plans to retain and motivate high performers.  As I noted to my colleagues this morning -- as we emerge from a recession the companies that emerge first will be cherry-picking the best and the brightest.  Even if your organization isn't rebounding as quickly it is a good time to identify your key personnel and be the best employer you can be -- an attractive pay-for-performance (STI) program is an effective technique when combined with other retention practices.