Changes to salary administration are best done all at one time

by on June 16, 2009 · 0 Comment POSTED IN: HR Info Center

Once a year for salary administration changes decreases the possibility of errors

If you do this all at once, you’ll make sure you don’t exceed your salary administration budget for the year. If you do this staggered throughout the year, you can get carried away and next thing you know your nine months in and you go, “God, we’ve already spent more than we said we’re going to spend for the year. We got to cut these last people off”. This stinks if you’re one of the next people coming up. It would better for you all of your changes to salary administration at once. It’s a lot faster. You can save your HR time for more meaningful stuff.

Salary administration and compa ratio
I’m not telling you to give somebody a raise derived purely from compa ratio but what I would recommend is that you give a manager with ten employees for example, a list. You give them the list, here are your people and here’s what the computer says they ought to get it. They’re all doing a good job. There it is. Now, you bring back to me one to two sentences for anybody you want to change, okay? Anybody you want to change. Because if you want to change them, here’s what I want to know, you know, who’s going up? Who’s going down?

Give me two sentences as to why I’m giving more to Sally because she accomplished all of her goals and she actually, you know, got everything done and asked for more before the year was out. And she’s made tremendous progress in learning her job. Okay, good

Bob on the other hand, I got to take money off the table. He dropped the ball twice this year on major assignments. We have told him that he needs to really improve or we’re going to have to take him out of that job. So I want to zero him out. Okay, I need two sentences to tell me why. It’s performance related and he has been told. Fine, okay. He’s out.

HR makes sure there is equity in salary administration

Now, your HR people need to look at this and make sure the salary administration is fair. Eighty percent of your people are going to turn out to – nobody is going to argue about them. They’re going to say, “All right. Well, geez, we love to give you more but that’s all I can do” or, “Geez, I’m not going to bother him but okay, fine. I’ll just leave that alone.”

Twenty percent, you move up and down. Now, if you move anybody up and down, you still have to balance the budget, okay? So, if they want more than you gave them, the manager has to come back with a story as to why? And again in HR, it’s always a good rule to have a little bit of a slash fund. So if somebody comes to you and they say they got a reason to do more than – it’d be good to know what that is, okay? So, you got all that stuff prepared to hand to them

Edited remarks from the Rapid Learning Institute webinar “How to Drain the Drama from Salary Reviews: A Conversation Roadmap” by Gary Markle

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