Compensation Force

Would You Like a Shot of Erratic With That Salary Administration Process?

I have a bone to pick regarding midpoint differentials.

For the uninitiated - those who spend less time than I do fretting over salary structure design at the tactical level - midpoint differentials are the "jumps" from range midpoint to range midpoint as you move up a traditional salary range structure. 

What I regularly encounter, the core problem at the center of this post, is salary structures where the midpoint differentials appear to have been spit out of a random number generator; e.g., 11%, 3%, 25%, 8%, 4%, 19%, and so on.  In many cases, the structures were actually created this way on purpose, in an effort to "match up" salary ranges to the job groups and values in place at the time of structure development.  In other situations, the chaos emerges over time, as a result of ongoing one-off adjustments in response to the circumstances du jour.

What's the big deal, you ask?  Getting a little too hung up on order and symmetry, you say?

Here's the crux of the problem.  Let's assume you came to this special place on purpose (rather than simply via haphazard structure management), striving at the time of your structure's creation to tailor ranges and midpoint differentials precisely to current job values.  Your elegant plan hits a wall when it encounters the real world, where the organization and its jobs do not remain static and where market values do not follow a predictable and uniform path.  New jobs will be added, some jobs will go away and many more will experience change in their nature, scope or background requirements.  Even those jobs that stay constant will see their market rates move at different rates - some lurching upward, others flatlining or even dipping in value.

Fast forward a few years and there you sit, with a structure precisely designed to fit a snapshot in time and a set of jobs and circumstances that no longer exist. And your erratic midpoint differentials, which are now disconnected from current reality, play havoc with your efforts to consistently manage promotions and job re-evaluations in a consistent fashion (because, as example, a one grade promotion or upgrade inexplicably means a 3% jump in one case and a 25% jump in another).

Bottom line: better to begin with a structure that has some logical consistency, and that can stand the test of time.  (Or, in other words, good luck administering salaries in a consistent and fair manner when the underlying structure is whacked.)

Image: Creative Commons photo "Salkantay-85" by cspruit

2012 Turnover Rates by Industry

Continuing a long tradition here at the Force, I am happy to share the latest turnover rates by industry, provided to us by CompData Surveys and drawn from their 2012 BenchmarkPro Survey, which features data submitted by nearly 34,000 organizations across the country.

The table below, which summarizes the "All Industries" voluntary and total turnover from 2008 to present, shows rates beginning to inch up after trending downward for the past several years.

Our special thanks, once again, go out our friends at CompData Surveys for sharing this information with us!

Congratulations on that Developmental Downgrade!

We compensation professional can be at risk for getting caught in the weeds, stuck in the survey data or lost in our own worksheets.

Case in point: A scenario I bumped into just the other day where a job was being re-designed to both provide a growth opportunity for the incumbent and meet an organizational need.  A win-win you say?  well, not in the eyes of one compensation professional.  See the video short below; I've been experimenting a little with animation and this represents my initial rough try at using it to tell a pay story.  Thinking this might be the first of several, I am calling them Pay Pokes^TM.

And yes, names and other details have been altered to protect the "innocent."

Pay Poke #1 - The Developmental Downgrade
by: abares

We've all had our run-ins with an Alice.  Many of us, sad to say, have had our own Alice moments (hopefully earlier in our careers!).  There is undeniable comfort to be found in having data, rules and ratios to rely on in making decisions and taking action.  Unfortunately, maturing in our roles means knowing when it is necessary to step away from that comfort zone and apply judgment.  Unless and until we are able to put our data in the context of the bigger picture - considering what the business needs as well as what will ultimately create the conditions for employee and organizational success - we risk getting stuck in an Alice rut.  One dimensional pay cop.  Unwitting obstacle to progress.

I'm willing to bet you all have your own Alice stories.