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Dear Workforce How Do I Fix a Messed-Up Salary Structure

Shortly after being appointed as human resources manager, I discovered that our salary system was a mess. What’s the best way to implement proper salary levels?
October 29, 2004
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Related Topics: Compensation Design and Communication, Dear Workforce, Compensation
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Dear Cleaning:

It depends on what you mean by "mess." Are jobs out of whack with the market? Are there significant issues with perceived internal equity? Do your policies fail to provide managers with tools for managing pay? Is your salary structure woefully out-of-date?
Your answers to the above questions will influence how you'll proceed. In general, though, you'll first need to assess which is more important: internal equity or external competitiveness. Once you've done that, you can begin to assess and evaluate what must be changed immediately, what can wait and what does not have to be addressed. Keep the following in mind as you proceed:
Define a compensation philosophy for the organization. This not only helps guide your efforts, but also forms the core of the message you want to communicate to your employees.
Make sure job descriptions are up-to-date and accurate. If they aren't, have the employees and managers revise them.
Use only high-quality published (or custom) salary survey sources. Internet sources are highly variable in quality and value.
Be up front with employees about the issues and what you're doing to address them going forward. For many employees, pay is not a motivator. Still, if not properly managed, salary levels can create tremendous dissatisfaction within a company. A well-thought-out plan of action is your best line of attack.
SOURCE: Robert Fulton, managing director,The Pathfinder's Group, Inc., an affiliate of The Chatfield Group, Chicago, November 25, 2003.
LEARN MORE:How to Conduct an Effective Pay Survey.
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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 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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