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Managing Pay Is an Easy Sell

May 29, 2003
Related Topics: Compensation Design and Communication, Performance Appraisals, Featured Article, Benefits
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Karl W. Fischer, vice president for compensation, communications, andperformance management at Marriott International, Inc., spends 30 to 40 percentof his time implementing the company’s new human resources management system,which gives managers enormous discretion in rewarding top performers. Marriott’sstaffing for human resources and the compensation function have not changedunder the new system, "but the work is quite different," Fischer says.

    Instead of spending time on job evaluation and job analysis to determinegrades,human resources now focuses on monitoring the marketplace and setting marketreference points for jobs. "The work is more interesting, and more like beingan analyst and an internal consultant," Fischer says. "It has been easy tosell the new system and train our line managers because it is so fundamentallyaligned with the new business strategy. It was a great experience to roll it outand see the operational side of the business really understand how thisreinforces what they are trying to do."

    At Dow Chemical Company, "the biggest benefit of the pay-management systemis that leaders have the ability to align pay with external markets and employeeperformance using a single global system," says Charles Bell, director ofglobal compensation and benefits. "Leaders are held accountable for their paydecisions by their bosses and through a basic compensation philosophy ratherthan ‘HR rules,’ which Dow feels is the best long-term direction for ourcompany."

    The new salary-management process actually enhances the role of humanresources at Dow, according to Larry J. Washington Jr., vice president forenvironment, health and safety, human resources, and public affairs. "Duringactual pay planning, our HR organization works with managers on implementing payfor performance, not doing calculations and administrative work," he says. "Thedesign elevates and changes the HR role. It doesn’t lessen it."

    With these new salary-management systems, "human resources gains thefreedom to be more of a strategic partner, putting general policies in place forthe line managers and taking on an advisory role," says Laury Sejen, WatsonWyatt’s national director of strategic rewards consulting. "The ability tomake this transition to the strategic-partner role often comes down to theleadership abilities of the top HR executive and the message that executivesends to HR staff about how they should be investing their time." 

Workforce, June 2003, p. 72 -- Subscribe Now!

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