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How Compensation fits into the People, Product, and Process Model

Commonly known as the “Three P’s,” people, product, and process are the three key factors to running a successful business. According to David Ciccarelli of Entrepreneur, they are the “three areas that have yielded the greatest return on investment of your time and money.” It’s a business philosophy that streamlines the way that you make decisions for your company. When making choices for your business, you need to ask the question: “will this directly benefit my people, product or process?” If the answer is yes, it is most likely a good decision.

When using this business philosophy, you are narrowing the focus of your values in your company. Using the people, product, and process model streamline decision making and makes everything simpler, easier, and most importantly, more efficient. I recommend this short video from Inc. Studio that quickly describes how the Three P’s can lead you to success. Essentially, a company that puts its focus on these three aspects of their business will ultimately be more successful than one that doesn’t.

So when incorporating the “Three P’s” into your business plan, you have to consider how every aspect of running your company can fit into that philosophy. One of those very important aspects that you have to consider, is the compensation management process.

As your company grows compensation management becomes increasingly difficult. More employees in more departments create… more difficult problems that take more effort to solve. As you can see by that previous sentence, managing your compensation plan for your business simply becomes more difficult to control as time goes on.

So, today we are going to look at how compensation management, and specifically compensation management software, fits into the people, product, and process model. 


There are two major groups of people that you need to consider when following the Three P’s business model. When it comes to compensation management, the first group that you need to look at is your employees, the people that will be primarily affected by your compensation management plan. When you find the right compensation plan for your business, your employees will be more motivated in their job and more likely to stay with your company for a longer period of time.

The second group of people you need to consider are your consumers. These are the people that are keeping your business afloat, so, you want to make sure that they are having the best possible experience with your company, so they become return customers and spread the word of their love for your product or service!

Unsurprisingly, this again relates back to your employees. When you have employees that are satisfied and motivated in their jobs, they will be better at catering to the needs of your customers. Additionally, with the money you save on buying software instead of hiring a compensation manager, you can allocate those funds to things like marketing, production, product design, or customer service to make sure you are doing the best you can to serve your consumers!

1. Product

Again, this category is twofold. The first product that you need to analyze is the compensation management program that you are going to use to create your plan. There are several things you need to consider when searching for the best compensation management plan for your company, but to narrow it down, I’ll give you the few most important ones.

First, you need software that has all of the features that you desire. Look for options such as performance metrics, specific bonuses, and individualized overviews. Next look for a company that prioritizes customer service, so you can always have on-hands help with your compensation. Finally, you want a company that will specialize in customization, so you can work with your existing software infrastructure and get exactly the things you need out of compensation planning. Check out our blog post titled “3 Key Things to Look at When Purchasing a Compensation System” for more information on this topic.

Next, you need to focus on the product that you are selling! I know you might be thinking, how does my product relate to compensation planning, but they, just like everything else in business, are deeply connected. Like I mentioned in the previous section, the money you save with compensation management software gives you more money to place elsewhere. However, in addition to that, the less time you have to spend on administration, the more time you can spend improving and perfect your product and/or services.

2. Process

Finally, with the people and product already under consideration, your process is bound to be more efficient and effective for both your employees and consumers. There is really no better way to simplify and improve your compensation plans than to incorporate the use of compensation software. With the individualized program, you no longer have to spend hours creating spreadsheets, create plans for each department and each person within that department, or even hire a compensation manager or team. Every aspect of compensation is handled by one software program, creating less stress and more time to focus on your consumers.

This brings us to the process of working with your customers. I’ve already mentioned the time and money that you save when using compensation management software, but something I have yet to bring up is how it saves you from stress. From both a management and lower-level employee perspective, a clear and appropriate compensation management plan makes everyone happier.

3. Progress

Progress isn’t officially one of the “Three P’s,” but if you follow the Three P process, progress is your result. Especially when considering how compensation management fits into the Three P philosophy, you can see how easily you can progress your company forward.

By streamlining decisions about compensation using the Three P process, you will likely end at a conclusion that incorporates compensation management software. Customizable software programs improve the morale of your employees, satisfaction of your products and services, and make the process of compensation planning infinitely easier.

The best way to solve your compensation problems is to analyze how it affects the people involved with your business, the products you are selling and purchasing, and the processes that run your business. So, when we revisit our original question “people, product, and process: where does compensation fit in,” the answer is: everywhere.

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