Apr 10, 2011

PAY PLANNING

In any pay system where progression rates vary according to performance there will be anomalies. These can arise when performance suddenly improves or gets worse and staff are either under-or over-paid because it is not possible, using the normal guidelines, to place them on the right curve immediately. In this situation these people would have to be treated individually and their salary increases adjusted to accelerate or decelerate their progression through the range, so bringing them back in line.


It is in these circumstances that managing reward processes requires judgement and a sensitive approach. Inevitably, this book has largely been about systems and procedures. But ultimately we are dealing with people who want and deserve to be treated as individuals, and this applies as equally to those who manage as to those who are being managed. Mechanistic systems of salary administration may make life easier for the personnel department but that is not the object of the exercise. No members of an organization can be really happy, well motivated and committed if they feel they are part of a machine which pays no attention to their individual needs.

Salary planning and administration must adopt the stance of thinking first of what is right for individuals in terms of their aptitudes, abilities, skills, performance and needs. Of course, this approach must always be tempered with the knowledge that the organization also has needs which demand satisfaction. But an integrated approach to reward management can optimize the needs of the organization and those of the individuals, and these should be seen as complementary, not opposed.

Salary planning therefore has to treat people as individuals who are pursuing a career. This means looking at how that career is developing and ensuring that the incentives and rewards for increasing competences and improving contribution and performance go hand in hand with progress within and through the organization.

1 comments:

Jordan said...

Sometimes discretionary profit sharing is the way to go. At GDK and Company, we offer financial services just like this. Here is a link:
www.gdkandco.com/RetirementPlanningServices/DiscretionaryContributionPlan/item32470.html

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