Compensation & Benefits

How do we decide on staff pay and benefits? 

Start here! Listen to this short (2 min) voiceover introduction to this topic. 

Setting a Compensation & Benefits Philosophy
INSIGHTS

Before setting salaries, start with a compensation and benefits philosophy that articulates:

  • Who you want to be competitive with? 
  • How will your salaries compare to external benchmarks?
  • How will you differentiate pay between positions? 
  • How will you ensure equity? 
  • How will pay be connected to performacne, if at all? 
  • How will pay change over time? 
  • What is the value proposition that you offer as an employer, and how do compensation and benefits connect to that. 
  • Consider how benefits can complement salary to make an attractive total reward for employee service. Benefits are the non-cash portion of an employee’s total reward. Benefits such as vacation time, health insurance, life insurance, or working from home can be a compelling proposition.
TOP TIPS
  • Build a clear statement that you apply consistently and without exception.
  • Consider a clear statement of a commitment to equity within the organization.
  • Be sure to consider what is at the intersection of sustainable and attractive.
  • Be sure that your philosophy is aligned with your values and defensible to both internal and external stakeholders.
FAQs

What if we can’t afford to pay high salaries?

Consider your broader Employer Value Proposition.  Research shows that pay is important, and you should benchmark your salaries so that they're competitive.  At the same time, research shows that people also consider other questions when assessing a potential employer: 

  • Do I believe in what the organization is working toward? Will I be making a differnece? 
  • Will I have the chance to learn and grow? 
  • Will I like and be inspired by the people I'm working with? 

Make sure that you are highlighting the many unique opportunities that working for your organization provides someone--whether it's growth, flexibility, impact, or building their personal network. 

Should I pay bonuses?

Research has generally shown that pay-for-performance strategies, like giving bonuses, actually decreases performance.  While you should explore what is most common in your context, partners who have introduced performance-based bonuses have typically later removed them, so we do not recommend them.  Performance can be very subjective and difficult to measure, and adding a bonus to them can add unncessary pressure and harm culture. 

How much should employees’ salaries grow over time?

There is no single answer for this.  Here are a few things you might consider: 

  • What is sustainble for your budget and competitive within the market? 
  • What are you incentivising? Growth in role? Moving to new roles? Taking on management? Are there multiple pathways for growth?
  • How are you acknowledging people's contributions to the organization over time? 

Whatever you ultimately decide, it is a best practice to apply it consistently to all employees within the organization. 

Benchmarking
INSIGHTS
  • Regularly research what your competitors offer, and consider what is feasible for you.
  • Create salary bands for roles to allow similar pay for similar work with differentiation for factors like experience and effectiveness.
  • Benefits can make your organization attractive.  Consider both what is required and what is attractive in your market. In some contexts, this could include things like vacation time, health insurance, life insurance, access to learning and development, or working from home.  Non-monetary benefits--like flexible scheduling, option to work from home, working for a mission driven organization--can provide additional incentive for potential candidates.
  • Regularly survey employees’ perception of salary and benefits to ensure your package is appealing and competitive.
TOP TIPS
  • Identify your competitors. Where might your employees work if they don’t work for you?
  • Consider all costs related to benefits and incorporate into your annual budget.
  • Small partners may want to do quicker benchmarking by asking a few similar organizations to share their information or by using free information. For more established or larger partner organizations, it may be worth investing in having a paid external firm do benchmarking for you as it can be quite complex.
  • Re-visit your benchmarks regularly as the market changes quickly.  
KEY RESOURCES
  • Multi-lateral organizations such as the EU, UN, and World Bank may have useful, public, benchmarking data. Business schools and local graduate schools often have publicly available data about salaries as well (particularly in Europe, the Middle East, Asia, and the U.S.)
  • These websites have useful benchmarking data: Glassdoor, Payscale, Indeed (Please note: listing a companyhere does not mean that we endorse their services.)
  • Benchmarking Vendors: These companies will provide with compensation and benefits for a fee. SGS, Inside NGO, Arthur J. Gallagher & Co., and Mercer. (Please note: listing a company here does not mean that we endorse their services.)
FAQs

What companies should I benchmark against?

This depends on your talent philosophy.  You might consider:

  • Local or international NGOs
  • Schools and education organizations
  • Private sector companies or consulting firms. 

Consider where people who join your staff would likely work if they didn't work for you.  You might also look at data from multiple sectors and then set a philosophy for how you you aim to compare. 

How should I benchmark my compensation and benefits?

First, set your compensation philosophy to help you to know which markets you want to be competitive with.  Also, make sure you have clear job descriptions for the role. Think about which roles are similar to the role you’re looking at so that you can level within a salary band. (For example, market benchmarks may be different for a technology role vs. a teacher coach role vs. a CEO role). Then, look at average pay for those roles and adjust your salary from there, based on your philosophy.

How much should a CEO make?

See the advice above for benchmarking more broadly. You might look at executive directors of similarly sized NGOs. Or you may want to look at regional directors of larger businesses. When setting CEO salary, you’ll want to consider the span of salaries from teachers to the lowest-paid staff in the organization to the CEO to make sure that you and your board feel comfortable with the span. You may also want to consider re-visiting salary benchmarks for the CEO as the organization grows in size and complexity and the base of funding is more stable. You might also reach out to other CEOs of Teach For Organizations in similar countries to ask them to share their salary benchmarks. Having external benchmarks to justify the choice of salary will be helpful, and in many contexts, a committee on the board would propose and approve CEO salary.

What is the typical span across salaries in an organization?

We do not currently have data on this. However, if you’re interested to participate in a future study that would allow you to see how your organization compares to others in the network, please email us to indicate your interest.

Transparency & Equity
INSIGHTS
  • Make sure all employees are familiar with your compensation and benefits philosophy.
  • Put in place practices to avoid bias and inequity in your system in determining salaries and raises.
  • Set clear processes for setting, approving, and changing salaries and apply them consistently in your organization.
TOP TIPS
  • Consider increased transparency. Research has shown that greater transparency around salary and benefits can contribute to greater equity. (For example, it can help eliminate the pay gap between men and women.)
  • Regularly review demographic and salary data to check for gaps by sub-group (i.e. gender, ethnicity, age, etc.)
  • Train managers on potential hidden bias, and make sure that salaries and raises are reviewed by a committee that is explicitly checking for fairness and equity.
FAQs

What if an employee gets an offer at another organization? Should I change their salary and benefits?

Whatever you do, you should do consistently. If you do this with one employee, you should do it with all employees, and it should be reflected in your philosophy.

Wouldn't transparency cause problems in our organization?

You should decide what works best in your context. That said, a number of organizations have been embracing greater transparency with a positive impact not only on equity but also on staff engagement.

PARTNER SPOTLIGHT

Enseña Perú

  • Embarked on overall review of their compensation strategy & a revision of their compensation philosophy. 
  • Conducted an analysis of current compensation levels, which informed the creation of role levels & salary bands. 
Related Resources
Collaborate

If you’d like to engage with the Organizational Development team or other network colleagues about Human Resources and Talent Management, please reach out! Use the form below to share stories & examples from your organization, share a comment, or ask a question.