Salary compensation is based on job, location, and company size
There are available programs that will produce for you a total salary compensation profile, which will show you what a base looks like, and if the person is bonus eligible, what the typical bonus should look like for this job, okay?
Now, a lot of your jobs don’t have bonuses but some of the managerial jobs certainly do. Some of the sales jobs have enormous bonuses associated with them. Or most of the salary is at risk, if you will.
So, again, this kind of salary survey will tell you what the slary compensation profile ought to be for your job. I would highly recommend you figure this out and get in the middle of it, okay?
In the salary compensation profile, there are several components in looking at annual pay.
There was the date of the survey, then you age this stuff. Again, I’m not trying to teach you how to operate the software. There are some things you need to know to make it turn out well even if you are doing an automated system. But you can pick those out by reading.
What to watch for with salary compensation profiles
My biggest fear with salary compensation profiles for those of you who want to do this on your own – and I know some pretty sharp HR people our there, is you got to be careful because if you come forward and you say, “This is it” and you determined some of your folks are overpaid, they’re going to test you, okay? And they’re going to test you hard.
And they’re going to think you’re in the pocket of management and they’re going to give you grief, okay, whereas if you have paid somebody on the outside to go do salary compensation profiles for you, you can stand in front of these people and you make them explain it.
Frankly, I’ve paid a lot of money to people on the outside to do this for me when I was an HR VP because I just didn’t need the grief for aggravation. And frankly, I didn’t do it everyday. So, I wanted somebody who did salary compensation and salary profiles everyday to go there and do this stuff for me. I gave him no instructions other than to tell me the truth, you know, find the middle of the market. I suggest you do the same. Again, if you’ve got to do it yourself, just be wary that they’re going to challenge you on your salary compensation profiles.
Pick a common date for a routine salary administration.
I strongly encourage you get off the anniversary date particularly if you disconnect your performance evaluation process from compensation- and you go to a coaching model like we teach. What you’re going to find is then it’d be great to get salary administration done all at once.
You guarantee you stick to your budget and you don’t exceed it. You guarantee you’re equitable across all people and it’s just hygienic you get it over with. And it takes less HR time.
Just make sure that you spread your scarce resources equitably. If you’re going to adjust to this, first time you do it prorate your salaries so that anybody who gets moved in the middle of their cycle doesn’t get cheated, okay?
And when in doubt, the first time you make the change like this that you get everybody to a routine or common base, you’re in the employee’s favor, don’t get caught, you know, rounding up for the company. It’s not worth a few dollars you save.
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