PAY FOR WHAT YOU NEED S ometimes you may need to look more closely at pay for jobs within your company that are particularly critical to your business. “Each structure has its own logic,” says
David Nygard, managing director with business consultancy
Hatch & Associates in New York City. “Some organizations pay
a premium for research and development or accounting talent
and use higher benchmarks for those jobs than for others.”
However, make sure the job and pay structure take rel-
evant job variations into account. For example, a control-
ler position in one division may be a traditional account-
ing-based role, while another controller supports the sales
function. “These roles are in diferent entities and require
diferent talent levels,” Nygard says, but a pay structure that
keeps them at the same level and in the same job family
doesn’t refect that reality.
Similarly, if a long-tenured maintenance worker keeps essential business
equipment running while simultaneously training other employees, that
person probably has increased his or
her market value. “This emphasizes the
need to make pay ranges wide enough
to accommodate diferent levels of experience and changes and growth in
responsibilities,” Rice says.
New jobs that are deemed essential
to an organization’s success also require careful handling, especially if you
have to pay a premium to recruit for
those positions. Ever since IHG made
app and software development a strategic priority, Terry and her team have
had to be thoughtful about managing
compensation for these roles. “These are hot jobs,” she says.
Her team must be vigilant about keeping pay levels current
and, when necessary, must ofer retention bonuses to make
sure people stay on board, she says.
At Black & Veatch, Weldon and his team conduct an annual market equity review for each business and function.
They analyze each person’s position in their pay range, job
tenure and location. This exercise highlights anyone who
is being paid either below the minimum for the range or
above the maximum. These folks could be at risk of leaving
the company if their compensation doesn’t represent their
value to the organization or in the marketplace. “We share
that with business leaders to determine why people are in
that situation and the likelihood that a promotion will solve
the problem,” Weldon says.
TRANSPARENCY AND THE MARKET Many businesses are uncomfortable with increasing transparency about pay, but such candidness could make it easier to manage situations when employees
reach the top of their pay ranges. As state and local govern-
A RANGE OF OPTIONS
ments pass laws preventing employers
from asking about an applicant’s salary history, HR must make sure pay
levels refect the work being done in
a specifc role and are closely tied to
the market. Then you can make a clear
case to employees about why the pay
range is what it is for specifc jobs and
At the same time, some companies
that operate in jurisdictions that do not
allow questions about a job candidate’s
salary history, such as Massachusetts
and New York City, are starting to consider eliminating pay ranges altogether.
Instead, “these employers are simply
paying what the market says the position is worth,” says Corinne Jones,
president and senior HR consultant
at CJC Human Resource Services in
New York City.
Other pressures also demand that
employers keep pay structures and
ranges closely tied to the market. “This
is the age of LinkedIn and Glassdoor,”
Det wiler says. “People know what is go-
ing on out there, and they are talking
to each other about what they expect
If you’re not meeting their expecta-
tions, you could fnd that your company
has dropped the ball in the competition
for the best talent.
Joanne Sammer is a New Jersey-based business and financial writer.