Planning Wage and Salary Programs
Posted by Paul Creasy on Wed, Aug 03, 2011 @ 07:58 AM
It has been several years since most employers have had reason to assess their salary programs. There have been a number of reports recently that job satisfaction is down from the 2008 level. According to Gallup, the decline is most severe for young workers. When they can, many are ready to change jobs.
One of the most prominent trends in salary management is the use of performance and salary management systems to identify and reward the high performers – the A-Players. Those people are hard to replace and costly to lose. That highlights the importance of a company’s reward practices.
Another trend is to pay the A-Players higher relative to market levels and the salary of other employees. Few employers can afford to pay everyone at, for example, the 75th percentile level but when done on a selective basis to recruit and retain the best talent, it makes solid strategic sense.
A third trend is to rely on a task force of line managers or senior specialists to rethink salary systems. They have to live with and accept responsibility for managing salaries. They know what’s currently working and what’s not. When changes are mapped out behind the proverbial closed doors, with little or no input from front line people, a new system or policies are always seen as HR’s. That serves no useful purpose.
The task of rethinking a salary system is not, as they say, rocket surgery. There are a few basic principles that are easily understood and mastered. A new book by our friend and colleague Howard Risher, Planning Wage and Salary Programs, was written for people with little or no background in salary management who are asked to play a role in planning a new system. It follows the content outline of a textbook but is far less technical and much easier to read.
Howard has helped employers in every sector – industry, healthcare government, higher education – to plan new programs. He spent over a decade serving as an instructor for WorldatWork workshops on salary management. He’s had opportunities to discuss the issues with hundreds of people. That experience was the basis for developing this book. Check it out.