Many of today's pay programs and practices are changing as formalized compensation programs that include written philosophies, salary structures and active performance management are becoming more popular even among small employers since 2003, according to Compensation Programs and Practices 2012, a new study by WorldatWork.

"For a vast majority of organizations, employee compensation is one of the largest operational expenses and the most difficult to manage," says Kerry Chou, a Certified Compensation Professional and practice leader at WorldatWork. "We expect to see more compensation professionals applying discipline and rigor to the design and management of pay programs to ensure business objectives are met."  

Just two years ago, 61 percent of respondents had formal, written compensation philosophies to support company culture while 67 percent of respondents have this type of policy in 2012. Another 85 percent of respondents reporting following formal salary structures with salary grade structures being the most common. Broadbands, which were prevalent in the 1980s and 1990s, have fallen, and only 8 percent of respondents say they use them. 

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