As compensation leaders, we spend a lot of time and energy explaining to our executives, managers, and employees — with varying levels of success — that compensation is driven by cost of labor, not cost of living. Eric Weinberg, VP for Compensation at Prudential, proposes a better way to assess and demonstrate to stakeholders how your organization's investment in people might actually be matching or beating inflation.

Takeaways

• Run analyses that show— despite discrepancies in comparing merit budgets with inflation statistics — the organization is actually doing far more than it may appear.
• Deliver a clear message demonstrating how employee investments outpace inflation.
• Give better answers to questions or challenges suggesting the merit budget is not adequate amid current inflation.