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IDear Workforce-I How Do We Make the Case for Fewer Salary Ranges and Titles

There are a number of administrative, strategic and other benefits, both to employees and employers.
June 14, 2000
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Related Topics: Compensation Design and Communication, Dear Workforce, Compensation
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Q

Dear Workforce:

The organization I work for has 700 job titles for 3200 employees and a lot of salary ranges. The problem is that the title is so important that new titles are created all the time, and jobs aren't always evaluated (no job description) since the managers don't consult HR.

At the Compensation department, we want to reduce the number of titles ( since a lot a employees do practically the same job but don’t have the same title), as well as reduce the numbers of salary ranges and implement a new evaluation system, since it's hard to manage the internal/external equity.

The problem is that we have to find ways to convince the Compensation Committee that such a change is necessary; in the past it as never been accepted.

— Valerie Palma, Compensation Analyst, Laurentian Bank, Montréal, Canada

 

A Dear Valerie:

Reducing the number of classifications and salary ranges will allow human resource professionals to reallocate their time to serve as a business partner in a more contemporary manner. The following are benefits of reducing the number of job classifications:

  • Facilitates attracting and selecting talented employees for an appropriately classified position related to the external market;
  • Enables better response time to internal customers;
  • Allows managers to manage or assume more responsibility and voice in compensation decisions;
  • Enables human resource professionals to perform proactive staff planning; and,
  • Allows the organization to define career paths for its employees more directly through a streamlined compensation program.

Implementing a compensation program that limits the number of job titles and salary ranges will provide the organization with the following additional benefits.

  • Facilitates internal and external comparisons based on the positions’ actual duties and responsibilities;
  • Streamlines and simplifies salary administration;
  • Maintains legal and regulatory compliance with all applicable federal and state statues and laws; and,
  • Eliminates the need to distinguish minimal differences in job duties and responsibilities.

 

SOURCE: Brian Shay, a compensation consultant with the Global Human Resource Solutions practice at PricewaterhouseCoopers. Shay specializes in salary administration, incentive design and executive compensation related services.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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