Key Points
The summer break is the only time of year when senior management and the human resources department can work on their compensation policy without being bogged down by its implementation. Six topics deserve attention during this time: the ability to explain the company’s pay scale in light of transparency requirements; job evaluation, which forms the foundation of the pay scale; the actual effectiveness of sales staff compensation; aligning interests through profit-sharing and employee stock ownership; managers’ understanding of the subject; and the robustness of the Compensation & Benefits function itself. None of these topics is urgent in July or August. All become urgent in September, when the HR agenda resumes and the window for decision-making closes. Compensation is the most direct signal of trust a company sends to its teams: it requires careful, advance preparation. At MCR Rewards, we support HR directors and executives through this summer planning process, so that the start of the new school year is a matter of execution rather than discovery.
Why Summer Is the Right Time to Address Compensation Issues
A compensation policy is rarely developed on the fly. For the rest of the year, HR departments focus on day-to-day tasks: payroll, performance reviews, raises, hiring, and labor relations. Fundamental issues—those that affect the overall coherence of the policy—are put off from quarter to quarter because they don’t have an immediate deadline.
The summer months reverse this dynamic. Activity slows down, demands decrease, and it becomes possible to focus on the data rather than on urgent matters: where are the unexplained discrepancies, which groups are falling behind the market, and which programs are costly yet yield only a marginal impact on performance? This investigative work doesn’t take weeks. It requires a few days of intellectual focus—something the start of the school year won’t allow.
Six Compensation Topics to Keep in Mind This Summer
1. Will you be able to explain your pay scale?
The European Directive on Pay Transparency (EU 2023/970) requires a shift in approach: providing candidates with information on compensation or the pay range before the first interview, the right of employees to access average pay levels by job category of equal value, the obligation to justify pay gaps, a ban on requesting salary history, and reporting of gender pay gaps for companies with 100 or more employees.
Current Status: The deadline for transposition expired on June 7, 2026, without France having adopted its law. A draft bill was submitted to the Council of State in early June, with the aim of having it adopted before the end of 2026. The company therefore has a window of opportunity this summer to prepare, which will close in the fall, when the French legislation sets forth the procedures and penalties.
The risk is not merely legal. A company that grants access to its data without first verifying its consistency will expose discrepancies that it cannot justify—both to its employees and to its employee representatives. The summer directive is to conduct this audit before the issue is raised from outside the company, without waiting for official decrees to be issued before getting started.
2. Job evaluation: the foundation that’s missing from most pay scales
The concept of work of equal value lies at the heart of the transparency framework. However, most pay scales are the result of a gradual accumulation of factors: successive hires under varying market conditions, promotions negotiated on a case-by-case basis, and one-time pay adjustments. The result is a structure that no one could defend on a position-by-position basis.
A documented evaluation of positions changes the nature of the conversation. It makes it possible to answer the question “Why him and not me?” using an explicit criterion rather than relying on past history, and to distinguish between a justified discrepancy and one that has been imposed. This is the technical prerequisite for transparency and, incidentally, the tool that makes effective management of internal mobility possible.
Read the article: Job evaluation: the key to restoring pay equity and internal trust
3. Does sales staff compensation still drive performance?
The right question to ask about a variable mechanism is not its cost, but its effectiveness: does it produce behaviors that differ from those that would be observed without it? Are the criteria understood by those subject to them, achievable, and aligned with the strategy rather than with the available metrics?
A commission plan designed for a sales cycle that has since changed mainly leads to frustration and windfall effects. Summer is the ideal time to plan a revamp that can be implemented in the second half of the year or the following fiscal year, before the issue turns into individual negotiations with top performers.
Discover the white paper on remuneration transparency
Discover the benefits of a transparent approach to talent attraction and retention, and how it can positively transform your corporate culture.
4. Profit-Sharing and Employee Stock Ownership: Aligning Interests Over the Long Term
Profit-sharing, incentive plans, and value-sharing bonuses are based on a collective, short-term approach. Employee stock ownership and long-term incentive plans (LTIPs) are based on a different approach: retaining a small number of key employees—whose departure would be costly—by giving them a stake in the value they help create.
Both are tax-efficient and often undervalued due to a lack of education. A program that beneficiaries do not understand is a cost with no return on investment. The summer provides an opportunity to review the mechanics of existing agreements and prepare explanations that will make them easier to understand when school starts again.
Read the article: Performance-Based Incentives: Transform Your Teams’ Engagement (And Don’t Wait Until Summer)
5. Do your managers know how to discuss compensation?
This is the most common blind spot. A compensation policy isn’t implemented through a memo—it’s communicated by line managers, who must announce a raise, explain a denial, or justify a pay disparity with a colleague. Pay transparency will automatically lead to more of these conversations.
A poorly equipped manager does two things: he hides behind management’s decision, which undermines the policy’s legitimacy, or he makes promises he cannot keep, which sets the stage for future disputes. Training managers in the logic behind the pay scale—not just its specific amounts—transforms the compensation policy into a management tool.
Learn more about Training managers in compensation
6. What happens when your C&B specialist is away?
One final point, which is rarely raised: the Compensation & Benefits function is often handled by just one or two people. A leave of absence, a resignation, or a vacant position during the summer—and the company’s ability to make informed decisions on compensation matters disappears, just as decisions for the start of the new fiscal year are being prepared. The issue of continuity and the team’s skill development deserves to be treated as a risk management issue, not as an organizational contingency.
Read the article: C&B—A Rare and Increasingly Strategic Role
What an HR Director or CEO Should Have Learned by September
- An Overview of Pay Gaps and Their Objective Justification
- An updated analysis of job roles and market positioning
- A critical review of various measures, focusing on their impact rather than their cost
- An educational plan on profit-sharing and long-term incentive plans
- A Checklist for Managers to Prepare for Back-to-School Conversations
- A business continuity plan for the C&B function in the event of an absence or vacancy
Compensation strategy: aligning performance, fairness, and attractiveness
Compensation has become a matter for senior management. It must balance budgetary constraints, transparency requirements, and talent expectations.
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FAQ
Why Should You Revise Your Compensation Policy During the Summer?
Because these issues don’t have an immediate deadline and tend to get pushed back indefinitely as the year goes on. The summer months provide the necessary time to address substantive issues before the start of the new school year imposes its own deadlines: NAO, budgets, and performance reviews.
What are the new requirements regarding pay transparency?
European Directive EU 2023/970 requires that job candidates be informed of the compensation or pay range before the first interview, grants employees the right to access average compensation levels by job category of equal value, mandates that employers justify any observed pay gaps, a ban on asking a candidate about their past salary history, and reporting on gender pay gaps for companies with 100 or more employees.
Do we have to wait for the French law to start preparing for pay transparency?
No. The deadline for transposition expired on June 7, 2026, and the French bill is still going through the legislative process, but the content of the requirements is known. The preparatory work—mapping equivalent functions, analyzing discrepancies, and developing objective justifications—takes several months: this is the critical path.
How can you tell if a variable compensation plan is effective?
By verifying that it actually changes behavior: criteria that are understood and achievable by those subject to them; alignment with the strategy rather than with available metrics; and consistency with the current sales cycle, not the one for which the plan was designed.
What is a timeshare C&B?
This involves engaging senior Compensation & Benefits expertise for a set period of time, without creating a full-time position. This arrangement addresses three scenarios: a company that is not yet large enough to warrant a dedicated position, a vacancy or absence that needs to be covered, or a one-time need for additional support on a key project.
