Career Paths are also Linked to a Compensation Program

by on June 15, 2009 · 0 Comment POSTED IN: HR Info Center

A Compensation Program Should Balance Job Titles and Paths

Your compensation program needs to balance the number of job titles with the defined career paths. And people place an awful lot of importance on this aspect of their job.

A Gallup poll has been conducted every year for the last 30 years asking the question of “What do you really want from your job?” And guess what ends up at the top all the time? It’s the ability to gain new skills and accept new responsibilities.

And maybe your organization does a good job with tying this to employee compensation. But I haven’t seen too many that I would consider good at this particular aspect of the compensation program.

So to the extent possible, try to build in job families with defined career paths. And the number of actual jobs you have in these job families will be dependent on the size of your organization probably.

Minor could be a smaller organization. Moderate, the career paths shown in the middle of the chart, moderate for a medium sized company. And significant if you’re in a large company, you might have this kind of career path within a job family.

And it’s okay to have vacant positions. Just don’t overdo it. In fact, if you’re a growing company, a rule of thumb is to try to have about 20% vacant positions so you at least provide the opportunity for growth within a particular job family. And you’re able to provide a clear career path to your people.

But bear in mind, if you do go overboard in this area, the time you spend on administering your compensation program will increase. And finally, HR should be the gatekeeper for the company’s classification scheme.

There are some companies where managers actually have control over the titles given to their employees. And it really should be HR’s responsibility. You want to balance between having too many titles and not enough titles. And HR should be the gatekeeper.

Edited Remarks From “The Seven Deadly Sins of Employee Compensation Plans (and How to Fix Them)” by Rick Olivieri

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