My team and I like work with employers that meet the following criteria:

• They must care about their employees and recognize that their competitive advantage is their people.

• They have the budget and willingness to pay competitively.

• They want to pay equitably and communicate transparently about their pay decision making processes.

We work with small employers that have less than 100 employees and large employers with more than 25,000 employees.  You can be a for-profit or non-profit organization.

Before an employer implements a Human Capital Management (HCM) system like Workday, SAP, or Oracle, I suggest that the HR/Compensation teams review their job architecture and processes to ensure that the new system can truly deliver the outcomes that are anticipated.

Adjust the timeline and resources to ensure that the changes to compensation processes, jobs, and pay structures are updated based on business need BEFORE the HCM implementation is completed. And ideally this should be well thought out during the project planning process.

The pace at which these large HCM changes are expected to happen by senior executives is fast. The resources (people, time, and money) are often underestimated.

Here's a step-by-step guide for conducting an internal equity analysis:

1. Define Job Comparator Groups:  Start by categorizing jobs into groups based on similarity in job responsibilities, required skills, knowledge, education, and other qualifications. Consider factors like Career Level (e.g., entry , intermediate, senior), job function (e.g., sales, marketing, engineering), and job family (e.g., administrative, technical, managerial).

2. Create Employee Comparator Groups: Within each job comparator group, categorize employees based on relevant factors such as seniority, performance, production/output, work location, education, training, experience, and travel requirements.

Most of us go to work because of the money.

We need the paycheck to pay our bills, give, save, and invest. Although giving, saving, and investing are not happening for many people these days.

It’s great if you like the work you do. But many are just doing what they must for their paycheck.

It is even better if you like the people you work with. Relationships at home and at work are often challenging.

Every compensation data source or salary survey used by an employer is imperfect. 

It would be great if the data set that the salary survey is based on was 100% representative of an employer’s competition for talent. But realistically, a good salary survey is reliable, valid, and has most but not all of your competition listed on the participant list.

Remember that salary surveys only represent a sample of the market. 

What is statistical reliability and validity?

What is your compensation philosophy? 

There are many ways to answer this question.  Here are some examples: 

1.        We pay between the 50th and 75th percentile.

2.        We target the 50th percentile of the external market.

3.        We review the external market and provide pay opportunity that is competitive and internally equitable.

What does it mean to burn bridges? To burn bridges with someone means to say or do things that lessen the possibility of returning to the previous state of the relationship.

It is incredibly tempting to burn bridges when you leave an employer and move on to your next job. 

Maybe your manager was awful, the work culture was toxic, or you were severely underpaid for the results you delivered. 

An employer (Company A) had acquired another firm (Company B) that was almost as large as them.

Company A had spent more than three years making sure that their job titles and market pricing of jobs was aligned to the external market in a consistent manner.

They had difficult conversations with many employees when their job title needed to change.

“We’ve recently completed a job title and responsibility audit.  We discovered that your job title of Director Marketing isn’t aligned to the level of work you are performing.

Improving the retention of your key employees isn’t that difficult.

You can apply the Golden Rule which is to treat others the way you would want to be treated in similar circumstances.

But when the other person’s lived experiences and outlook differs substantively from our own, we stop being a reliable barometer of their needs, values, and goals.

A man and a woman are hired at the same time. The man is earning a base salary of $85,000 and the woman is earning $70,000.

The man earns a 3 (meets expectations) on a 5-point performance rating scale every year. This leads to a 3% merit increase every year.

The woman earns a 5 (outstanding) on a 5-point performance rating scale every year. This leads to a 3.75% merit increase every year.

Data tells a story, and it can be difficult to argue with facts.  Figure out what data you need to tell the story. 

It is better to show data to back up your recommendations than to go to an executive meeting with just anecdotes, intuition, or gut instinct.

Employer: It feels like I am approving a promotion for employes to be Managers or Directors every other day. What should the span of control or the number of direct reports be for someone who is supervising others?

Just over 1 in 4 workers is covered by some form of U.S. pay transparency legislation. At least 15 states are considering pay transparency laws.

There continue to be leaders who do not want to share a base pay range on a job posting. Their reasons sound something like this:

1.     “Our competitors will find out what we are paying.”

One of the many things my team and I spend time on for employer clients is job evaluations. 

What’s job evaluation?  Job evaluation is a systematic process of assessing the value of jobs to determine the compensation to be paid to employees performing those jobs.

This means that we are reading employer job descriptions and comparing those to the descriptions in salary surveys to find a match.  Once we find a match or more than one match, we can determine what is a competitive base salary range and incentive targets.

There are times I think I should write a book and share the HR stories that I hear. 

The org chart below was submitted to an internal compensation consultant friend of mine.  She also received the job descriptions for each job shown on the org chart.  I’m going to call my friend, Sara. She was asked to market price all these jobs. 

Sara asked who had approved the organizational design.  And the HRBP said that the VP shown on the org chart had shared this with the other VPs and CEO of the company.

You can’t lead others past the point where you have led yourself.

Read that again.

·        If you want your team members to have actions consistent with their words, you need to do that as well.

·        If you want a team member to demonstrate self-awareness and emotional regulation, you must do that.

Have you heard of these terms?  If not, it is a good time to become familiar with the difference. 

And just to make it a bit more complicated, you will also hear the terms controlled (adjusted) and uncontrolled (unadjusted) pay gap.

Payscale’s 2024 Gender Pay Gap Report was recently published. I’ve put a link to the report summary in the first comment below.

This report defines the terms this way:

Career paths are not difficult to define, but they do take time and intentional focus.

Step 1 - Group jobs by their functional focus. Example job families include Accounting, Finance, Legal, Sales, Operations, HR, IT, Marketing, Communications, Government Relations, etc.

Step 2 - Define career levels so you can group jobs based on an internal equity focus. You may have one set of career levels for every job or a couple sets. 

Potatoes aren’t pretty. They are weirdly shaped and inconsistent. They are brown and bumpy. They sprout if left unused long enough. They are dirty when you dig them up. BUT they have lots of potential.

Diamonds are pretty. They sparkle and are expensive. They are also one of the hardest gems.  The only thing that can scratch a diamond is another diamond.  And while they can have inclusions and blemishes you may not be able to see them with the naked eye.

When I look at an employer’s pay structures, I can tell within a few minutes if I am looking at a potato or a diamond.

My daughter was home from college last week because of Spring Break. I took some time off to spend with her and we enjoyed soaking in hot springs, eating great food, napping, reading, and viewing snow-covered trees and mountains. 

We also spent time sitting in traffic on I-70 here in Colorado as we made our way back to Denver from Buena Vista. This was the day after snowmagedden. Just imagine lots of semis and people driving back to Denver after skiing with big piles of snow alongside the highway.

My team and I like helping employers determine if there are root cause issues causing inequities in pay. We look at the employee lifecycle to determine what processes could be causing the issues.

(1)   How you determine the starting pay rate for a new hire (LOTS of pay equity issues found later are caused by not setting starting base pay off at the right level)

(2)   Your pay decision-making processes for annual merit increases, off-cycle pay changes, and promotions