HR Pulse - Fall 2007 - (Page 58)

WHY DIDN’T I THINK OF THAT?—BEST PRACTICES FOR THE PRACTITIONER Compensation Offers— A Better Process By Alex Wade A 58 HR Pulse Fall 2007 s an HR professional, you probably get several questions a week regarding pay. Some of these questions concern offers to new hires, promotions, demotions, and changes in status. You are likely challenged from time to time on some of your recommendations and decisions. You need a standardized procedure to help you become more consistent and to document the results. There are two tools which can help you standardize your process. One is an experience based pay chart for new hires. A second tool is a template for developing pay recommendations. In this article, we will provide an overview of these tools. Experience Based Pay Charts To handle outside hires, you can make it easier on everyone by creating an experience based pay chart for each of your pay ranges. This is a very common practice. For the purpose of this article, we will assume that you have already established pay ranges for your jobs. These pay range charts typically show an increasing rate of pay for each year of experience (from 0 years up to some maximum) within the grade. In this way, offers are made consistently and equitably. Obviously, you would need to ensure that your present staff meets or exceeds these rates based on their related experience to avoid pay conflicts. Mechanically, you would take the minimum of the pay range and add a percentage (like 3%-5%) to establish the rate to pay for the next year’s worth of experience credit. The percentage credit you give should not exceed the average annual increase you anticipate giving for the next few years, so you will want to be conservative on this credit to avoid paying new hires more than your current staff. The final chart could show a minimum rate for no experience, the minimum plus 3% for one year, the minimum plus 6% for the next year, and so forth. A sample chart is presented on page 60. Note that you may want to vary the years of experience credit you allow by pay range, or even by types of jobs within a pay range. For example, you might give no experience credit for your first 5 ranges, up to 5 years of credit for ranges 6 through 10, and up to 10 years credit for ranges 11 or above. Or perhaps you could give up to 12 years credit for specific jobs. Your experience chart can therefore be designed to improve your competitive position in the job market. In addition to established pay ranges and steps for experience, you should research the experience of your current staff to record the number of years of experience they have that is related to the role they serve in your organization. For instance, most employers would ignore all secretarial experience toward an accounting job. However, they might honor all of that experience toward a job as an executive secretary. You will also want to establish an experience rounding rule for consistency (round up, round down, or round off). A simple computer spreadsheet can be created as a template so that you can enter individual work histories and let the spreadsheet consistently compute and round the results. For your current employees, the results of your research should be logged, either in a spreadsheet or in your Human Resource Information System (HRIS). Once logged into your system, you can index these numbers upward on an annual basis until some maximum number is reached. Once you have created a chart and you are satisfied that no one in your organization makes less than his or her experience rate, you can begin using this chart to establish new hire rates. The chart can also be used by others with some assurance of consistency, provided everyone is on the same page concerning your rules for honoring and calculating experience. Standardized Templates A standardized template can help clarify the process, improve consistency, improve equity and docu-

Table of Contents Feed for the Digital Edition of HR Pulse - Fall 2007

Contents Executive Director’s Letter President’s Message HR Leader Profile: Lisa McDaniel Spotlight on Community Citizenship Culture of Engagement How Transparent Should Healthcare Compensation Be? The Value of Assessment Testing in the Recruitment Process Technology Dramatically Changes FMLA Compliance Creating a Magnetic Culture™ Taking It to the Hill: An Advocacy Update 401(k) / 403(b) Fee Lawsuits – Are You the Next Target? Compensation Offers – A Better Process Find It Again Pulse Points Who, Why and Where Conference Highlights Schedule at a Glance Keynote Speakers Social Events Conference Sponsors Exhibitors Index to Advertisers

HR Pulse - Fall 2007

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