December 2021 - Birches Group LLC

Month: December 2021

BUILDING YOUR SCALE: IMPLENTING YOUR NEW SCALE

Written by Kai Donesa on December 21, 2021. Posted in Resources.

Now that your salary scale and benefits package is ready, the final step is implementing your new scale and communicating the changes to your teams. Equipped with your analysis and overall cost implications against your budget, you will now need to secure the necessary approval from management.

When seeking approval, begin by presenting any existing issues with the current salary scale and the challenges your salaries are facing against the external market. Take management through your process when you built your new salary scale, making sure to highlight:

The chosen salary survey you used as a basis
Your chosen set of target comparators that met your criteria
The difference of your existing salaries against your target market position
The steps you have taken to address the current issues and build future capacity
The overall cost

Finally, you also need to present to management your implementation plan and the timeframe that it will require, so they can assess the entire impact of the new scale.

Once approval has been granted, the next step is communicating the changes to staff. This is a crucial process because you will need to equip your managers with the right information for them to relay later to each of their teams or units. When discussing the changes with your staff, keep these in mind:

Discuss the work that went into building the salary scale and be clear on the company policy that supports the steps you have taken. This will ensure that your managers will be ready to answer any questions or reactions their staff may have.

Be clear about your implementation plan, what staff can expect, and when. This way, you can manage everyone’s expectations and hopefully have them feel excited about the changes that are soon to take place.

With the steps we have shared on implementing your new scale, we hope this has provided you with the insight you need to get started in designing your own pay structure. Birches Group is always ready to help organizations create a salary scale that will work for them. Contact us to learn more.

Want to know if your existing compensation practices have the elements of a good compensation program or if there are areas that could use some improvement? Take our quick Compensation Program Assessment Quiz to know your score!

Bianca manages our Marketing Team in Manila. She crafts messaging around Community™ concepts and develops promotional campaigns answering why Community™ should be each organization’s preferred solution, focusing on its simplicity and integrated approach. She has held various roles within Birches Group since 2009, starting as a Compensation Analyst and worked her way to Compensation Team Lead, and Training Program Services Manager. In addition to her current role in marketing and communications, she represents Birches Group in international HR conferences with private sector audiences.

BUILDING YOUR SALARY SCALE: ADJUSTING YOUR SCALE

Written by Kai Donesa on December 9, 2021. Posted in Resources.

Now that you’ve created your salary scale and examined your benefits package; the next step is adjusting your scale. Refining your scale will be a trial and error process until you get as close to your target as possible. There are several factors that will affect the impact of your scale, both externally and internally, so it is crucial to keep these in mind every step of the way.

When we think about external factors that affect the impact of your salary scale, factors such as average market movement, your budget, the number of incumbents per grade level in your organization, as well as the overall cost all need to be considered. When you start allocating adjustments for each grade level in your scale, using the average market movement and your budget, you can start adjusting your scale’s minimums and maximums, while keeping the number of incumbents per grade level in mind. Once you have gotten as close to your target market position as possible, check if your adjustments are all within budget. If not, keep adjusting and tweak where necessary.

While adjusting your pay ranges, you also want to keep in mind the issues that your existing salary scale has and how your changes will best address them. Are your hiring rates competitive at the job levels where you need more capacity? Do any of your existing staff fall below your current hiring rates? Similarly, do you have staff that are currently paid beyond the maximum salaries of their grade level? Do you make use of your salary ranges per grade level or do you find many of your staff clustered in certain points in each grade? Remember, adjusting your salary scale is not simply about updating salaries following market movement. It is also about making corrections where you know there are inefficiencies in the current pay structure.

Just as important as reaching your target market position and being competitive externally, is your team’s internal cohesion. Once you have reached your desired salary scale results, give it another look to see if everything makes sense. Pay close attention to your internal parameters, such as the progression from one grade level to the next, and see if the overlaps are reasonable. Examine your spans – the difference between your minimum and maximum salaries – as well and see if they align with the nature of each job level within your organization. Also, you will need to see how each of the adjustments you made will affect staff at every grade level. Checking for fair internal cohesion will ensure strong staff engagement to which they can tailor their development and build their careers over time.

Designing and refining salary scales is both a technical exercise and a sensitive one. As managers in human resources, we must realize that without an efficient salary structure in place, along with a solid job structure, achieving a strong engaged workforce will always be a challenge. And while we know that the salaries we set will not always make everyone happy – someone will always want higher pay, someone will challenge your chosen set of target comparators, and perhaps ask why they cannot have more benefits – what is important is making sure that the policies that went behind designing the salary scale is clear and communicated to staff. To learn more about how Birches Group can help you design a salary scale fit for your organization’s needs, contact us today.

Want to know if your existing compensation practices have the elements of a good compensation program or if there are areas that could use some improvement? Take our quick Compensation Program Assessment Quiz to know your score!