Why businesses need a strong compensation planning process (and how TeamOhana helps)

Compensation decisions say more about your company than any value statement ever could. They signal who you value, how you reward performance, and whether people can trust the system that shapes their careers. They influence retention, internal mobility, and your ability to hire the right talent at the right time.

And yet, most companies still treat compensation planning like an isolated HR exercise that happens once or twice a year in a giant spreadsheet. The process is slow. Managers lack context. Finance is brought in too late. And by the time everything is reconciled, someone’s working off the wrong version.

You can’t run a strategic compensation process if it lives outside your headcount plan. Every raise, promotion, market adjustment, and retention decision rolls up into the same cost forecast. When those decisions happen in disconnected tools, no one has an accurate picture of what’s actually going on.

A strong compensation planning process requires shared data, shared context, and shared ownership, not another spreadsheet. Which is exactly why companies are rethinking the way they run comp cycles.

Why compensation planning matters more than ever

Compensation planning sits at the center of how companies attract, retain, and motivate great people. When the process is steady and well-governed, employees understand why decisions are made, managers operate with clarity, and the organization runs with far fewer surprises. When the process wobbles, the ripple effects hit culture, budgets, hiring timelines, and morale long before anyone sees the full picture.

It drives retention, engagement, and fairness

Employees pay close attention to how pay decisions get made. A process that feels ad-hoc or opaque creates doubt, even when intentions are good. Managers also struggle when they don’t have reliable guidance, which leads to uneven decisions across teams.

A strong compensation planning process builds consistency. Everyone involved works from the same data, follows the same expectations, and applies the same rationale, reducing noise and reinforcing fairness.

It carries massive financial impact

Compensation is the largest component of headcount spend, and headcount spend dominates operating expenses. Every adjustment affects burn, runway, and hiring capacity. Finance teams need visibility into these shifts long before a cycle wraps.

Teams that run comp planning in a structured, integrated system develop a sharper sense of budget discipline. As Tracie Akers, CPO at Metronet, puts it, TeamOhana helps teams stay “much more budget-conscious as we grow.”

That kind of alignment only happens when compensation and headcount plans live side by side.

It shapes hiring and internal mobility all year long

The groundwork for a comp cycle is laid months in advance, often without people noticing. Talent teams rely on salary benchmarks and compa ratios when advising hiring managers. HR looks at promotion readiness, equity across teams, and the timing of market adjustments. Managers need clarity when deciding whether to pursue a backfill, level a role differently, or promote from within.

A strong compensation planning process gives every team reliable signals that feed into daily workforce decisions.

How compensation planning breaks inside spreadsheets and point solutions

Most companies expect precision from their compensation cycle, yet the underlying process is usually stitched together with manual exports, disconnected tools, and a fair amount of institutional memory. That structure can’t deliver the accuracy, visibility, or coordination that Finance, HR, and Talent teams need.

Data is scattered across systems and instantly goes stale

HRIS data lives in one system. Budget assumptions sit in FP&A models. Performance reviews come from a separate tool. Salary bands might live in a static document that only a handful of people remember to update. Pulling this data into spreadsheets creates a single moment of clarity that disappears as soon as something changes, which is often within hours.

Teams lose confidence quickly. By the time managers start reviewing recommendations, no one is entirely sure which version reflects reality.

Finance has limited visibility into decisions that affect budgets

Compensation adjustments have immediate consequences for hiring capacity, runway, and planning. Yet many compensation tools were built primarily for HR teams, forcing Finance to review decisions through PDFs, Slack threads, or manually updated sheets.

That separation slows down approvals and creates preventable disagreements. Finance leaders need to see impacts as they unfold.

Comp cycles happen infrequently, which makes the process fragile

Teams run compensation cycles once or twice a year. Tools that sit outside daily workflows become unfamiliar between cycles, and HR ends up retraining managers and chasing down missing inputs. Each cycle feels like a reinvention of the last one.

The pattern is predictable: slow launches, unclear expectations, and a rush at the end to align numbers across spreadsheets that don’t quite match. A stable, repeatable process is hard to build when the system itself isn’t connected to the way teams operate the rest of the year.

7 steps of a modern, unified compensation planning process with TeamOhana

Collaborative workforce intelligence is the foundation for a more modern compensation planning process.

When headcount planning and compensation planning share a single foundation, teams stop battling stale data, version drift, and siloed decision-making. They gain shared context, real-time visibility, and a workflow that reflects how cross-functional compensation planning is supposed to work.

TeamOhana was built to give People, Talent, Finance, and managers one connected way to run compensation planning. The process becomes more predictable because every step sits on top of the same source of truth.

1. Start with accurate, real-time people data

A successful compensation cycle depends on the quality of the data that feeds it. Job architecture, salary bands, performance ratings, variable pay, tenure, past adjustments. All of it needs to be correct before the first guideline is set. Most teams spend days assembling that information from different systems, only to watch it fall out of sync before managers even log in.

TeamOhana removes that entire layer of friction.

Because the platform already houses your employee roster, job architecture, compensation benchmarks, and headcount plan, the groundwork for a comp cycle is already done by the time you’re ready to launch. Finance and People teams don’t have to reconcile spreadsheets or manage CSV uploads. The system pulls in the data automatically and keeps it updated in real time.

This is one of the biggest shifts teams experience when they adopt TeamOhana. Instead of a six to eight week setup window common with standalone comp tools, cycles can be prepared in about a week and configured in minutes because nothing needs to be rebuilt or re-imported for each event.

2. Define eligibility and approval flows clearly

Once the data foundation is solid, the next challenge is clarity: who’s participating in the cycle, who reviews which decisions, and how recommendations move through the organization. When this structure is even slightly ambiguous, HR ends up mediating exceptions, Finance loses track of approvals, and managers slow the entire cycle down.

A strong process hinges on predictable rules upfront. TeamOhana makes this easy by letting teams tailor the cycle to the way their organization actually works:

• Eligibility criteria can reference any attribute, like tenure, pay grade, performance cycle, location, job level, or custom fields.
• Approval chains mirror your real org structure. Whether a decision needs one reviewer or three levels of sign-off, the system routes it automatically.
• Governance guardrails ensure the right people see sensitive data while others see only what they need to keep the process moving.

Teams feel the difference immediately. As Johnnie Thompson, Senior Director of Compensation, Benefits & People Programs at Bluevine, put it, “This was the first time we really not only had a seat at the table but we really brought the table by bringing TeamOhana.”

Clear rules reduce noise, strengthen trust, and prevent misalignment before it has a chance to form.

3. Set compensation guidelines that balance structure with flexibility

Managers make better compensation decisions when they start with a clear sense of what “good” looks like. Without guidance, every recommendation becomes a negotiation. With overly rigid rules, managers feel boxed in and HR spends the cycle adjudicating exceptions. The best processes offer direction without shutting down judgment.

TeamOhana supports that balance by letting teams build guideline logic that reflects their real compensation philosophy, whether that’s anchored in performance ratings, compa ratios, benchmarks, pay type, geography, or growth trajectory. For scenarios where nuance matters, teams can simply upload a curated set of adjustments and the system applies them automatically.

The result is a more predictable, fair process: managers get the structure they need to move quickly and confidently, while People and Finance teams maintain oversight without micromanaging every decision.

4. Equip managers with context and real-time budget visibility

Managers carry most of the weight during a compensation cycle, yet they’re often the people with the least context. They’re asked to make decisions about fairness, retention, performance, and market positioning without seeing the data that should guide those calls. That gap creates slowdowns, uneven outcomes, and constant back-and-forth with HR.

“Having a system in which your recruiters are living in, your hiring managers, executives, and Finance team can be living in as a regular part of your business cycle really strengthens the idea that keeping comp and expenses top of mind is critical for business success” — Johnnie Thompson, Bluevine

TeamOhana closes that gap by giving managers everything they need in one place. Inside the reviewer dashboard, they can:

• Compare an employee’s current compensation to benchmarks and compa ratios
• Review performance ratings alongside proposed changes
• Explore promotion readiness and level expectations
• Understand the budget impact of each recommendation in real time
• Spot outliers instantly instead of waiting for HR or Finance to flag them later

This changes the tone of the entire cycle. Managers move faster, their decisions better reflect company philosophy, and Finance no longer braces for end-of-cycle surprises. A cycle that once felt like a burden becomes a focused, informed decision window.

5. Run scenario plans for compensation changes and compare actuals against those plans

Compensation planning doesn’t happen in a vacuum. Raises and promotions immediately shift budgets, hiring capacity, and long-term headcount planning assumptions. People and Finance leaders need a way to model those impacts before the cycle begins and then track real outcomes as the year unfolds. Without that connection, teams can’t understand whether their compensation strategy is supporting hiring velocity, retention goals, or budget discipline.

A strong process requires:

• The ability to test compensation scenarios safely, and
• A reliable way to compare actual results to the plan throughout the year.

TeamOhana makes this possible by bringing workforce scenario planning and real-time tracking into the same platform that houses the comp cycle itself.

With TeamOhana, teams can:

• Model different merit budgets, promotion rates, or market adjustments and see cost deltas instantly
• Stress-test how compensation changes affect annual spend, runway, and hiring plans
• Compare approved compensation plans to actuals as the year progresses
• Understand whether early recommendations or mid-cycle adjustments are pushing spending off track

When teams experiment with “what if” questions like “How would a 4% merit budget impact Q3 hiring?” or “What happens if we accelerate promotions for engineering?”, Finance no longer needs to rebuild an entire model just to validate a single idea. Managers and HR gain the context to make informed recommendations instead of guessing. And leadership sees, in real time, how compensation decisions flow into the broader workforce plan.

6. Finalize compensation decisions with automated, personalized communication with employees

The end of a compensation cycle is where many teams hit their breaking point. After weeks of careful reviews and approvals, HR still faces the time-consuming task of preparing and distributing merit letters.For Bluevine, it’s a process that took 10+ hours of manual mail merging per comp cycle before implementing TeamOhana. It’s tedious work at the exact moment when leaders want to put a polished, confident finish on the cycle.

“The time spent manually creating letters is completely gone.” — Johnnie Thompson

TeamOhana turns that final mile into a fast, repeatable workflow. Once decisions are approved, HR can generate personalized merit letters in seconds using templates that reflect the company’s tone, compensation philosophy, and regional requirements. Conditional logic ensures the right content appears for every employee, whether they received a merit increase, a market adjustment, a promotion, or a combination of changes.

Real teams have felt the difference immediately. Metronet, for example, quickly produced more than 3,500 letters for its global employee base without sacrificing accuracy or customization.

7. Close the loop on comp planning by updating the workforce plan in real time

A compensation cycle isn’t complete when letters go out. The real impact shows up in changes to burn, runway, hiring pace, and team composition. If these updates require manual headcount reconciliation or spreadsheet patchwork, the cycle’s accuracy disappears the moment it ends.

TeamOhana syncs every approved compensation decision directly into the headcount plan, keeping Finance, HR, and Talent aligned without any extra work. Raises, promotions, and market adjustments automatically update:

• Department and company-level spend
• Variance tracking between budget and actuals
• Forecasted burn and runway
• Hiring capacity and backfill timing

Because the plan updates itself, teams never run on outdated assumptions. Finance doesn’t have to redo models. Talent doesn’t have to chase corrected budgets. HR doesn’t have to distribute “new versions” of the plan.

The entire cycle flows into one living workforce model, which is exactly what Collaborative Workforce Intelligence is designed to support: decisions that are made once, reflected everywhere, and trusted by every team.

Make compensation planning a team sport with TeamOhana

Compensation planning affects every corner of the business: how you retain people, how you shape teams, how you forecast spend, and how quickly you can move when the organization’s priorities shift. The stakes are high, yet most companies still rely on workflows that were never built for cross-functional decision-making. Spreadsheets, siloed tools, and manual reconciliations create a fragile process at the exact moment when leaders need clarity and confidence.

TeamOhana offers a different path. By connecting compensation planning to the same real-time workforce model used for headcount and scenario planning, teams get a cycle that is faster, more predictable, and far easier to run. Finance sees accurate budget impact as decisions are made. HR brings structure and fairness to the process. Talent can plan hiring with confidence. And managers finally have the context to make informed recommendations instead of relying on intuition.

Customers are already seeing what this shift unlocks. Bluevine brought Finance and People into one unified workflow for the first time. Metronet ran a cycle at massive scale with clarity and control. IonQ uses TeamOhana to keep plans aligned across teams and eliminate the reconciliation work that once slowed everything down. 

And we’re only moving forward from here. TeamOhana’s investment in agentic AI will extend this foundation even further, surfacing pay patterns, identifying risks, and recommending actions in real time. Compensation cycles become more strategic because the intelligence behind them keeps improving.

If you’re ready to bring alignment, accuracy, and speed to your next cycle, we’d love to show you how.

Request a demo and see how a unified compensation + headcount workflow can transform the way your team plans.