Compensation Planning
What is Compensation Planning? Annual Comp Cycle Explained
Compensation planning is the annual process of reviewing and adjusting employee compensation: merit increases, promotion adjustments, market adjustments, equity refresh grants, and bonus payouts.
The process starts with leadership setting a total budget, managers recommending individual adjustments, HR reviewing for consistency, leadership approving, and communication to employees.
In companies using spreadsheets, the cycle takes 6-8 weeks. Modern comp planning platforms automate budget allocation, approvals, and manager recommendations, reducing it to days.