Payscale Inc., the leading provider of compensation data, software, and services, has released its 2024 Top Performers Report. Leveraging data from Payscale’s flagship Compensation Best Practices Report, the new research examines what differentiates top performing companies, defined as organization who self-report that they exceeded their revenue targets in 2023, from non-top performers: those that missed their revenue goals. Payscale finds that being proactive, transparent, and communicative about pay are leading factors in what distinguishes top performing companies from their peers.
“Today’s employees expect visibility into the ‘why’ behind their pay,” says Lexi Clarke, chief people officer at Payscale. “Seeing such a clear and measurable connection between proactive, transparent, and communicative pay practices and organizations that exceed revenue targets should make every executive pause. As economic and labor dynamics continue to evolve, the pursuit of revenue targets will become increasingly complex. Today’s companies must ensure they have the tools in place to create purposeful compensation practices that engage their workforce to achieve their objectives.”
Key takeaways on the anatomy of a top performing company are below.
- Company size does not matter when it comes to performance. Being a large company with deep pockets is not a prerequisite for implementing compensation best practices that support revenue outcomes. Top performers are found equally in both smaller and larger organizations. About one-fifth of organizations (21%) exceeded their revenue targets in 2023 despite challenging economic conditions.
- Top performing companies are proactive about pay communications. This is one of the biggest differentiators and a driving theme between top performers and non-top performers. Most top performing organizations (57%) embrace pay transparency and share pay ranges even when not required by law, but less than half of non-top performers do so (43%). Nearly three quarters (71%) of top performing companies address underpaid employees proactively and regularly. On the other hand, 32% of non-top performers only address underpaid employees reactively, if an employee or manager brings it up.
- Purpose-build compensation technology is powering top performers’ decision-making. Leveraging the latest compensation technology underpins confidence in pay decisions and leads to better outcomes. Top performers are more likely to be using, purchasing, or evaluating compensation management software in 2024 over under-performing companies (50%).
“The message is clear: companies that exceed revenue targets are purposeful about their pay practices,” says Ruth Thomas, pay equity strategist at Payscale. “With an increased use of compensation management software, these organizations have the tools in place to be proactive, transparent, and communicative about pay. These organizations demonstrate they value their employees by being one step ahead when it comes to pay discussions and decisions. As a result, they are poised to lead the way in performance outcomes.”
