What is a compensation system?

Fair compensation system is one of the main tools for motivating employees to reach the targets. It organizes work environment, set clear and just system, unifies principles for determining compensation for various job performers. Implementation of compensation system provides managers with arguments when explaining the set compensation to the employees and shareholders.

The aim of the compensation system

The aim of the compensation system is to set clear and understandable principles for how much, to whom and for what to pay, so that employees are motivated to improve their performance, achieve the set targets and at the same time receive fair compensation, corresponding to the labour market and organization capabilities.

Fontes experts have developed job evaluation methodology and have been implementing it in various organizations since 1996, also provide consultations on compensation and development of compensation systems. Annual compensation surveys and gained insight into the compensation systems and compensation levels of more than 600 organizations in the Baltic’s, in both private and public sectors enable Fontes to provide compensation systems that are in line with labour market trends.

Fontes aim of compensation system development is to help arrange principles to determine the compensation that is internally fair, motivating and corresponds to organization’s capabilities.




  • Unified principles and clear understanding of employee reward for their work, as well as for achievements
  • Fair compensation, corresponding to the labour market and organization capabilities
  • Arguments for explaining the set compensation and employee motivation
  • Regulated work environment and employee management in accordance with unified principles
  • Guidelines and discipline for managers for work with their employees
  • Optimal division of limited budget

Other Fontes solutions for compensation system improvement

  • Development of compensation policy
  • Compensation system audit
  • Job evaluation, setting internal hierarchy of job positions
  • Development of base salary system
  • Development of criteria for individual compensation
  • Comparison of the compensation level in the organization with the labour market
  • Development of criteria for variable part of the compensation
  • Development of bonus system based on results
  • Development of common link between compensation and results of organization/departments/employees
  • Development of managers’ financial motivation system
  • Development of benefit and perquisite system
  • Preparation of the documentation of compensation system
  • Development of the communication plan for employees regarding the compensation system
  • Development of annual employee evaluation system and template of evaluation form. Training for managers on employee evaluation
  • Consulting on different questions concerning compensation

Successfully implemented compensation system will increase employees’ motivation, encourage loyalty and achievement of corporate goals!