There’s a compensation heat wave, says Susan Willmott, SPHR, and the only way to avoid it is with a compensation structure that’s carefully worked out based on job content and value to the company.
In yesterday’s Advisor, we learned about writing job descriptions that provide information about job value; now with job descriptions done, here’s how to move on to the compensation system, says Willmott. She is a consultant with Berkshire Associates, a provider of software products and consulting services, specializing in human resources and affirmative action.
First of all, Willmott says, competitive starting salaries are needed to attract talented employees to the company. Thereafter, increases in employee compensation should be tied to factors that add value to the organization.
A compensation structure that features fairness and internal equity (real and perceived) is an asset to organizational culture, as well as a requirement to minimize legal exposure.
There are various methods to create a compensation structure. However, the common purpose is to establish value and group jobs into grades or bands. This is typically done with the following steps:
- Define 3 to 10 factors that affect pay for each position (for example, compensable factors from the job description, time in company, market rate for job, performance). These will vary from job to job—the factors that influence pay for an HR generalist, a sales manager, and a receptionist are very different.
- Assign a value to each compensable factor. Education, for example, may be very important for some jobs, less important for others, or not relevant at all.
- Group jobs with similar compensable factors and values. These groups become your grades or bands.
- Determine minimum and maximum pay rates for each grade or band.
- Document the process for evaluating new jobs and slotting them into grades.
More than 2,400 prewritten job descriptions available 24/7. We store them; you customize, print, download, and e-mail them. Find out more.
We Know Our Pay Differences Are Not Related to Race or Gender
Once a compensation structure is based on good job descriptions and careful factor analysis, your company can say, "We know our pay differences are not related to race or gender because they are determined by job-based, nondiscriminatory factors."
You’ve limited liability because your system will provide the defense often missing to rebut a race or gender complaint, Willmott says. At the same time, you’ll prevent the perception of inequity that employees might otherwise feel. Not a bad outcome from rewriting your job descriptions.
Surprisingly, although we’ve seen their importance, job descriptions are neglected in many organizations.
It’s not hard to see why—job description maintenance is easy to put off, and it’s not exactly glamorous HR. But that doesn’t mean it’s not critical HR.
What’s the best way to manage a whole company’s worth of job descriptions? We put it in the hands of the BLR® editors, and they came up with a revolutionary new program, the Job Description Manager.
Easily customize (or create), maintain, and organize your job descriptions with this online tool. Job descriptions have never been this easy. Get more information.
Job Description Hassles—a Thing of the Past
Now you can easily create, maintain, and organize your job descriptions with BLR’s Job Description Manager. This online tool provides you with:
- Job descriptions for more than 2,400 job titles
- Customizable to fit your specific needs
- Stored on our site and accessible 24/7 from any computer, anywhere
- Easy to access and update—your latest copy is just clicks away
- Available to download and print or even e-mail your job descriptions
The Job Description Manager is the most comprehensive and useful job description tool on the Web. And we’ll stand behind that claim with this promise: If you are not 100% satisfied with your purchase, just let us know within 90 days and we will return 100% of your money—no questions asked.
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