[Go here for questions 1 and 2]
3. What is the Alignment of Incumbents Within Their Pay Grades?
Perform the following analyses, suggests Carroll:
- All positions in the organization compared to the midpoint (market)
- Positions within each pay grade compared to the midpoint (market)
- Analysis of incumbents within each pay grade compared to the midpoint (market)
Create a plan for what to do with employees who are not where they should be (red-circled, green-circled, etc.)
4. What is the Relationship Between Positions Within One Pay Range as Compared to Positions Within Another Pay Range?
The most common problem is going to be internal compression (for example, new hires making more than experienced workers). Compression can be due to many factors:
- Overtime
- Average tenure
- Working managers as opposed to managers with different responsibilities
- Recruitment/promotion challenges
One of the factors that Carroll sees contributing to compression is that managers are not skilled at negotiating salaries. Training can help.
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5. Where are the Risks to the Organization?
Finally, says Carroll, you need to be on the lookout for risks:
- Watch for patterns with managers or departments. There may be certain managers who consistently make poor compensation decisions relating to hiring, promotion, and merit increases.
- Do an analysis of demographics, particularly, sex, race, and age, compared to compa-ratios.
- Make a plan for dealing with internal compression if necessary.
- Especially if your analysis indicates that you are losing top talent, create a retention program.
Communicating with Management
Before finalizing a report a report for management, ask questions, says Carroll. Don’t assume too much from the data without delving into the realities of your organization. (For example, you have a turnover figure; was it good turnover—poor performers leaving—or bad turnover—best employees leaving?
In addition, says Carroll:
- Share your data at regular intervals with executives and managers
- Share the big picture—with only the detail needed to make your case. Don’t go in with all the spreadsheets—that’s too overwhelming, Carroll says
- After you present analysis, be prepared with solutions, recommendations, and action items
- Make your recommendations concise and easy to understand
- Explain the why
- Communicate what the impact/cost will be to the organization
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