A few weeks ago you may have read my blog about what not to say to your compensation consultant when you think your team member is underpaid. Now I am going to share what you should say to help the conversation be more successful so that you can bring home a win for your team.
Manager: This job is hard to recruit for in this location because the percentage of physical therapists [or insert job title] who reside in this location is much lower than the national average. I have data to support this claim.
First of all, this almost never happens, so if you do bring data to support your claim your compensation consultant will probably faint. The other reason this might be a winning argument is that most compensation teams rely heavily on national data to market price jobs because accurate local data for many jobs are hard to come by. Therefore, if you can demonstrate that the supply of labor in your location differs from the supply in the locations that participate in the surveys, you may have a winning argument. Be prepared to overcome the response that they do participate in local surveys. In that case, ask to see the survey data and draw your own conclusions.
Manager: This pay for this job has changed over the last few years and the salary we pay for it has not kept pace. It needs a market adjustment.
In a well-run compensation department, jobs are checked against the market with some predictable frequency so that managers are not responsible for bringing these situations to the attention of the compensation team. Most of the time, however, variables act to keep this from happening. Then it’s up to diligent managers to get the attention of the compensation team to have jobs in their department market priced. If you’re right and (1) the market pricing is out of date and (2) you can get their attention and (3) you can get funding for the increases… this argument may be successful. Be prepared for the compensation team to say that there are several other jobs on the list ahead of yours.
Manager: The job they are performing is more difficult than the rest of the team. When the work comes in the door, a particular kind of work is routed to this individual because he or she is the only one with the skills to do it.
The reason this has a chance as a winning argument is that you are declaring that the work is different enough to be a different job and you have modified the work queues to take this into consideration. You have to be able to specifically identify what is different about it and create a new job and new job description to go with it. Note that just writing additional years of service into a job description does not turn it into a different job. Neither does orienting new hires or “setting a good example.”
Manager: Someone I just hired is making more money than someone on my team who has been here 3 years. Here is how much they would be paid if we were hiring them from the outside today. I would like their pay adjusted to this amount.
This happens when the protocols for determining pay for new hires are more generous than the protocols for annual raises for current employees. For example, new hires receive 3% for every year of service when pay increases for employees have only averaged 2%. Doesn’t take long for employees to notice that new hires are making more than they are. This should be a winning argument, but the problem is that if it’s true for someone on your team, it’s probably true across the company, so equity and money will be the reasons they give you for not making this adjustment.
Manager: The job description is not accurate. It does not describe what they are doing.
This can either be a winning or a losing argument, depending on the circumstances. If the job description is mostly accurate, but is missing a few of the tasks the person is performing, adding them to the job description will not be enough to increase the market value for the job. On the other hand, if the job description is so bad that the compensation consultant can’t tell what the job really is, improving the job description may have an impact on the market pricing.
Manager: This job was matched to the wrong job in the market.
This argument requires some understanding of how market pricing works and insider data about how the compensation team performs its work, so you may not have the information to make this argument. However, if you do, it could be a winning argument for you. In some cases, employee jobs have been matched to the wrong job in the market surveys because of confusion about the job duties, requirements or title. For example, a Histology Technician and a Histology Technologist sound similar, but have different duties and requirements and should market price differently. If the Compensation team used market data for the Histology Technician to determine the compensation for the Histology Technologist on your team, you would have an argument that it was incorrectly priced.
If you understood some but not all of this article, you may need the assistance of an expert (read: external consultant) to help you successfully navigate compensation terrain. Reach out to me and let’s see how I can help you work through compensation analysis in your organization.