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Compensation Design and Communication

Dear Workforce How Should We Rein in Runaway Salaries

September 7, 2011
Our organization discontinued merit increases about three years ago. The board of directors, however, has mandated across-the-board increases of 2 percent to 3 percent for all staff who are not in probationary status. But after three years of these increases, even people who were hired fairly recently have gotten pretty far away from the salary-grade minimums. In addition, we have several employees who have reached their salary-grade maximum during the past three years. We usually award a bonus rather than further increases for this group. Would it be equitable to raise the minimum starting salary and maximums each year by one-half of the across-the-board increase?
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Dear Workforce How Do We Tighten Our Salary Bands?

September 7, 2011
Our company has put a new five-band salary structure in place, but it's already causing worries for our executives. We have some longtime employees–those with at least 15 years' experience–who are underpaid, so the plan is to boost their pay to competitive market levels. As we do so, however, we're faced with hiring new employees for those same jobs at the higher salaries–even though they don't have the years of experience with us. Short of redoing the salary structure again, what are our options for handling this thorny situation?
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Dear Workforce How Do We Explain Wide Differences in Pay

September 7, 2011
How do we manage a disparity in pay levels? We are raising pay rates for employees to be more in line with our competitors. However, this hasn’t eased our recruiting difficulties very much. In addition, management is considering raising pay yet again for new recruits, but we are understandably concerned that such a move would make pay for new workers nearly equal to employees with two to three years of experience. This would also affect the pay of people with even longer tenure. Obviously, whatever we decide will affect both our retention of high performers and our recruitment of top talent. We don’t want to get hung up on this issue, but feel caught in the middle. Is there a way out that satisfies all sides?
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