What Managers Need to Know About Salary Compensation
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What Managers Need to Know About Salary Compensation

Managers Should be Able to Justify the Salary Compensation Program

Managers probably need to know a little bit more than employees. They ought to know something about salary compensation philosophy. You may communicate the entire salary structures where jobs are assigned for only their group of employees or maybe as company wide level. How the salary ranges were developed? Why a job is placed into grade seven versus grade six.

Again, they should know in quite a little bit of detail how the incentive plan works and how the stock program works. You really want your employees to have a tendency to go to the manager first with most questions before they go to Human Resources Department. You probably want that to happen but you have to give them the tools and the information to answer most of those questions. Otherwise, it’s all going to be directed back to you.

They probably should know how to compensate new hires. What’s the policy when they bring in a new hire? What are the things they need to take into consideration? If they’re bringing somebody into an occupied position, how the promotional process works? When do we do promotions? How much can I give a salary increase of promotions or is there a promotional increase amount that I can award? How they get through all the paper work?

Generally, most organizations at any size have some kind of personnel action notice form, which hopefully requires more than one signature. Eventually it gets keyed into the system, paying increases are awarded to the employee to that processing. They need to know how that works and what the timing is and all of that.

They should know what that calendar is. Most salary compensation people work on kind of a calendar. They generally go through the same process generally at the same time every year.

They do need to have access to information about their subordinates. Managers need to be involved in compensations decisions directly because they know the individuals best. And as long as you train them and they have all the information, the tools they need.

Managers may want to tell employees their salary compensation history, incentive payment history, stock award history, any information you could get them on the job family that they’re in so that they can communicate next career progression.

Edited Remarks From “The 7 Deadly Sins Of Employee Compensation Plans (And How To Fix Them)” by Rick Olivieri

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