When considering an experienced employee's education and work experience for compensation purposes is it better to consider all Years of Education and Experience or only Relevant Education and Experience? The difference being should a company give vacation credit and greater compensation for all of a employee's work and education experience or just that which is relevant to the job the employee will be doing. The same thing goes for promotions or employees seeking career changes. If you do a peer comparison to figure out where the employee should fit in the salary band and level it is much easier to take current year subtract year of high school graduation and come up with a number. However, someone could have taken leaves of absence from work to travel the world, or worked in different careers/industries, not worked at all, and be given vacation credit and additional compensation. On the other hand it is very difficult to do a peer comparison of 3 or 4 people and sift through the details of their work and educational history. Efficiency vs Accuracy or is there a better tool to use. What about people who didn't graduate from high school until mid career or not at all, their number is lower or doesn't have one at all.
Pay for the job? The employee's experience? expertise? education? Pay for performance?
Compensation strategy, policies and practices are required to maintain consistency and equal and fair treatment.
Tuesday, August 30, 2011
Monday, August 29, 2011
Pay for the Job
In a recent discussion with an HR Generalist, the topic of pay for administrative assistants came up.
HR Generalist -I think that Team Admins should get paid more than they do. Don't you think that they should have a higher pay level than the one they do?
Me (Compensation Analyst) -All admins are paid on the same level. Admins are assigned their work as per their managers. Job's are evaluated based on value -what level of responsibility and accountability does the job have? One position might be busier at times than another, but the work is of the same quality(value). The only way possible I see for the pay level of admins to increase is if the supply(availability) of admins was far less than the demand and therefore having to increase the pay. If an employee is unhappy with their pay, there is nothing preventing an employee from applying to other internal positions, seeking additional education and or changing careers. There is nothing preventing a manager from giving a great performance appraisal and assigning a greater merit increase(pay for performance). The manager also might have a budget for ad-hoc awards or appreciation. Managers could also utilize other tools to increase an employee's engagement such as flexible work hours, additional training, career development work assignments, etc. It's important to find out what the root problem is; the pay, total rewards, the work itself, lack or recognition and appreciation, etc. Once the root cause is known, the most appropriate course of action can be taken.
HR Generalist -I think that Team Admins should get paid more than they do. Don't you think that they should have a higher pay level than the one they do?
Me (Compensation Analyst) -All admins are paid on the same level. Admins are assigned their work as per their managers. Job's are evaluated based on value -what level of responsibility and accountability does the job have? One position might be busier at times than another, but the work is of the same quality(value). The only way possible I see for the pay level of admins to increase is if the supply(availability) of admins was far less than the demand and therefore having to increase the pay. If an employee is unhappy with their pay, there is nothing preventing an employee from applying to other internal positions, seeking additional education and or changing careers. There is nothing preventing a manager from giving a great performance appraisal and assigning a greater merit increase(pay for performance). The manager also might have a budget for ad-hoc awards or appreciation. Managers could also utilize other tools to increase an employee's engagement such as flexible work hours, additional training, career development work assignments, etc. It's important to find out what the root problem is; the pay, total rewards, the work itself, lack or recognition and appreciation, etc. Once the root cause is known, the most appropriate course of action can be taken.
Policy Review -Market or Cost
I recently did an analysis for the executives to take to the owners of the company for approval.
I was working on what was thought to be a quick project; summarize the current situation, collect the data, analyze the data, provide a few options for recommendation.
The company pays a boot subsidy to all employee required to wear certified safety boots while at work.
So, I summarized our current process, policy and amount.
I collected data from collective agreements, compensation survey results, focus groups and network contacts.
I collected data on the price of boots that met the required standards for the 2 locations in the city where work boots are sold.
I received the total cost of the boot subsidy paid via employee pay stubs.
I analyzed a report of expense claims for additional boots to see if there were trends of any area/group that went through more than 1 pair of boots a year.
What I found was that the market (other companies) were providing a subsidy/reimbursement greater than the cost of boots.
With a compensation strategy to be p50 or p90, does it make sense to increase the subsidy with the market even if the cost or allowance is more than what is required?
Then there is the additional background information of how frequently is the amount reviewed? How often is it increased as a result of the review. Does the increase and cost ever meet over the period between reviews?
Should the policy be reviewed in terms of who owns the policy, who owns the standards, how should the subsidy be administered as an expense claim or automatically on a pay stub as per meeting eligibility requirements?
What can start as a small project can grow as you seek higher and higher approval.
The underlining fact to point out is that it is called a subsidy not reimbursement and therefore by definition does not have to be 100% of the cost and perhaps a review of the name itself is required.
I was working on what was thought to be a quick project; summarize the current situation, collect the data, analyze the data, provide a few options for recommendation.
The company pays a boot subsidy to all employee required to wear certified safety boots while at work.
So, I summarized our current process, policy and amount.
I collected data from collective agreements, compensation survey results, focus groups and network contacts.
I collected data on the price of boots that met the required standards for the 2 locations in the city where work boots are sold.
I received the total cost of the boot subsidy paid via employee pay stubs.
I analyzed a report of expense claims for additional boots to see if there were trends of any area/group that went through more than 1 pair of boots a year.
What I found was that the market (other companies) were providing a subsidy/reimbursement greater than the cost of boots.
With a compensation strategy to be p50 or p90, does it make sense to increase the subsidy with the market even if the cost or allowance is more than what is required?
Then there is the additional background information of how frequently is the amount reviewed? How often is it increased as a result of the review. Does the increase and cost ever meet over the period between reviews?
Should the policy be reviewed in terms of who owns the policy, who owns the standards, how should the subsidy be administered as an expense claim or automatically on a pay stub as per meeting eligibility requirements?
What can start as a small project can grow as you seek higher and higher approval.
The underlining fact to point out is that it is called a subsidy not reimbursement and therefore by definition does not have to be 100% of the cost and perhaps a review of the name itself is required.
Stampede –The Rise of the West and Canada’s New Power Elite by Gordon Pitts
Winner of the 2009 National Business Book Award
Pitts present an interesting view on what is currently taking place in Canada
With a long term prosperity and developmental view for Canada
- Re-brand
- Create the Heritage Fund for the Arts, Culture and Social Sciences –Work on Diversifying the economy and providing alternate views, activities and opportunities for Albertans.
- Run a bullet train between
- Establish a task force on the oil sands –Plan ahead and figure out a development plan and a reclamation plan
- Move a major bank to
- End provincial trade barriers –Enable free movement of employees (recognize certified tradesmen from other provinces) and remove barriers to supply and demand
- Build universities of excellence –Sustainability & diversify what
- Develop a national talent strategy –Recruit high in demand skilled individuals from other countries
- It’s no more Mr. Nice Guy –Utilize taxes and ensure a fair portion is received
- Make over the zero-sum mentality –Think Win-Win
- Learn to Love resources –Be Proud of what we have and don’t downplay its importance or prestige
For anyone interested in a concise overview of the Canadian politics and economies, this is a must read and provides insightful background. It also warns of the dangers of resentment and if we continue to battle and concentrate on the transgressions we fail to realize and maximize our potential.
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