Competency-Based and Other Salary Management Best Practices

Report
Competency-Based and Other
Salary Management Best
Practices
Brian Walby, Ph.D., CCP, Consultant to
American Society of Employers
Format and Topics for Today*
Format:
 Presentation: Best practices - competency-based pay and salary management
 Most discussion and questions at end on any topic (and after the session)
 High level and many topics; cannot delve into depth in time period we have
Topics:
 Competency-Based & Other Salary Management Best Practices (key focus)
Aligning these with:
 Compensation Strategy / Philosophy
 Behavioral and Technical Competencies
 Career Pathing
 Performance Management
 Other HR Programs
* Note: Each company must determine a salary management program that is most appropriate for its own culture, business,
preferences, etc. Information, content, concepts, etc. discussed today are generally consistent with best practices as
endorsed by World at Work (Brian Walby – Lifetime Member) as well as most major HR/Compensation consulting firms.
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Best Practice ‘Sequential Phases’ in Salary Planning
 1. Project Plan/Management: Staffing, tasks, roles, timing, methodology
 2. Compensation Strategy / Philosophy (key – topics on next slide)
 3. Job Analysis (JA): Gather key job duties, responsibilities, requirements
 4. Job Documentation/Descriptions (JD): Formatting job analysis data
 5. Job Evaluation: Market pricing [U.S.] or Job content [points] analysis
 6. Pay Structure Development: Traditional grades, Wide grades, Bands
 7. Assign/Slot Jobs Into Structure: Market pricing and Internal equity
 8. Program/Plan Communications: Messages, media, meetings, etc.
 9. Program/Plan Implementation: HRIS/Payroll, Pay management
programs/systems, Transactions/process, HR staff roles, etc.
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Compensation Strategy / Philosophy
Key Components of an Effective Compensation Strategy/Philosophy
(provides framework upon which pay policies are developed)
 Company mission, values, objectives
 Frame of comparative reference
 Size, industry/sector, geographic index of comparator companies
 Mix of, market target (e.g. 50th %ile) and approach per pay element:
 Base (85% use 50th), Annual, Long Term Incentives, Benefits, Perquisites
 Specific Considerations re: Base Salary (build Policies from Strategy)
 Pay structure(s), pay drivers (e.g. merit, competencies), position in
range per experience / performance.
 Compensation communications (who will know and what they will know)
(Note: Approx 2/3 of companies have written comp strategies; >90% have written or unwritten)
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Best Practices/Key Data Capture in Job Analysis/Descriptions
 Conduct Full Job Analysis (JA) every 3 to 4 yeas
 Each year give incumbents and managers opportunity to review/modify JDs
 JDs developed from JAs should provide 3-4 sentence job summary/overview
 JD should also provide the 5 to 7 key functions comprising 70-80% of the job
• Functions/responsibilities should provide identification of competencies
 Other Sections to include on JA / JD for optimal legal and HR use (W&A can
provide sample templates)
• Job Title
· Job Code
• Department/Function
· FLSA Status
• Division or Business Unit (if applicable)
· Reports to (Title)
• Minimum and Preferred Education / Training
· Non-essential, functions
• Minimum and Preferred Experience / Skills
· Internal/External Contacts
• Use of Discretion and Judgment (For FLSA)
. Effective date
• Who JD was Prepared by, Reviewed and Approved by (Function and HR)
• Mental, Physical Demands, Work Conditions (for ADA, if/as needed)
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Competencies
Definition
 Behavioral competency: Any incumbent employee behavior that is
readily observable, measurable and characteristic of successful
performers in a job, role, company or culture. [WorldatWork]
 e.g. Leadership, Interpersonal Skills, Flexibility, Initiative, Team-oriented, etc.
 Technical competency: Any underlying major bodies of knowledge or
skills needed to perform a particular type and level of technical work
activity. Often assessed by job analysis, work output evaluation, work
observation, technical review, and/or other structured testing. Typically
viewed as ‘necessary but not sufficient’ to fully evaluate employees.
 e.g. Technical competencies for software engineers often include:
• Software requirements
• Software design and coding
• Software testing
• Software maintenance
• Software management
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Competencies (continued)
Competency ‘Model’ Definition
 A set of competencies that can apply to an entire organization or to a
particular job family, such as finance, purchasing, engineering, HR, etc.
 A ‘model’ describes differentiating performance behaviors or technical
skills / knowledge. Typically includes 6 to 10 competencies.
 Each competency may have several ‘levels’ of proficiency
 Competency models for a given company may be developed either:
 Organically: Unique to a given company by job analysis (on-site
observation or job analysis forms), expert panels, focus groups, etc.
And / Or
 Generically: Using and/or modifying pre-established or standardized
models from professional or trade associations, consulting firms etc.
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Competency Use or Planned Use Within HR Functions
Recent research indicates competencies are increasingly used across various HR functions
100%
90
80
70
60
50
40
30
20
10
Prevalence/
Percentage
of
Companies
Career
Planning /
Pathing
Recruitmen
t / Selection
Training and
Development
Performance
Managemen
t
Talent
Management/
Succession
Compensatio
n
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‘How’ It’s Done –
Coordinated Competency Use Across Various HR Functions
Develop Technical &
Behavioral
Competencies, Job Roles
and Functions
Establish Total
Compensation and
Talent Strategy to
Support Business
Success
Conduct
Candidate
Assessment &
Selection
Aligned and
Coordinated
Competency Use
Across Various HR
Functions
Implement
Performance
Management
Program
Create Career Planning
and Pathing Level Guides
Within Salary Structure
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Common Advantages:
Aligned Competency Use Across HR Functions
 Companies / employees focus on development of skills, knowledge and
behaviors with greatest impact on strategic corporate objectives
 Talent Management/HR functions / processes / policies regularly
developed/modified in consideration of common elements & ‘big picture’
 Employees view their position, responsibilities, career pathing in context
of the total organization, and see themselves as key component
 Enhances recruitment, retention, motivation of higher caliber candidates
and employees
 Contributes to (correlation with) employee efficiency/performance,
corporate financial/operational performance, and customer satisfaction/
retention
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Know the Link Between Goals and Behavioral Competencies
Goal Setting: Goals, Measures and Behaviors
 Corporate and other Goals Drive Measures
 Measures, in turn, drive Behaviors (i.e., you are likely to get what you measure,
especially if you pay for what you measure)
 Ensure your process begins with corporate strategy and goals
Goals
Measures
Behaviors
Expectancy Theory:
 Performance (behaviors/competencies) most likely to improve when employees:
Have ability to perform
Have clear understanding of what is expected (Corporate, Division, Individual Goals)
Receive constructive feedback and reinforcement
Have adequate support (tools, equipment, budgets, etc.)
Believe additional effort will result in improved performance (individual/group)
Believe improved behaviors and competencies will be rewarded
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‘Best Practice’ Methods to Create Company Competency Models
 Job Analysis (JA) or Job Description Analysis (behavioral/technical):
 Review of JA forms or JDs by experienced HR staff or consultants to identify
key and common competencies across various positions and/or levels
 Can also or further define levels by methods below or in combination:
 Modify / Adapt Standardized Models (behavioral/technical):
 Compare JA and JDs against competencies from standardized sources
including compensation surveys or professional & trade association models.
 Focus Groups (primarily for behavioral competencies):
 Facilitate groups of high performers with standardized questions regarding what
and how a given function or responsibility is successfully completed.
 Tech Panels/Tech Workflow/Output Review/Observation/Documentation
of needed competencies for business processes (tech competencies).
 Panels or document review by strong performers or functional managers to
identify/confirm/modify job family/career path specific tech skills/knowledge.
 Behavioral Event Interviews (behavioral/technical; time consuming):
 ‘BEIs’: Individual interviews with successful incumbents to extract behavioral or
technical competencies from work experiences described.
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Behavioral Competencies: Developing Standards/Models
Effective Behavioral Competencies and Standards should be:
 Written: Helps to ensure employee understanding and commitment
 Aligned: with Organizational Mission/Values/Objectives. Should be able to
indicate how each competency supports/reflects the big picture
 Relatively Brief: Lengthy standards cause potential misunderstanding
 Realistic: Should ensure that expectations are achievable; historical data,
professional models and employee input are all helpful
 Precise: Eliminate subjectivity. For legal and practical reasons, only have as
many ‘levels’ (i.e. usually 3 or 4) in your rating system as you can truly define/
describe, and result in generally consistent evaluations across trained raters
 Reevaluated: Should be reviewed at least bi-annually
 Consistent: Standards for the same types of positions should be consistent
across the organization
Note: Ideally and typically, standards should be developed for each level of performance.
From a practical standpoint, it is most important to initially develop standards for the
expected level (i.e., Meets Expectations or Stage II of a 3 level competency.)
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Possible Levels / Stages of Behavioral Competencies
Advantages
Disadvantages
Five Levels
 Provides potential for differentiation
 Must be able to differentiate 5th level for defensibility;
requires time to draft/develop meaningful distinctions
 Oftentimes, only four levels are used in practice
 Typically includes an ‘exemplary’ or ‘superior’ level,
though this must be accurately defined to differentiate from  Level 3 (middle) Rating is often perceived negatively, no
‘above average’ (typical Level 4) employees.
matter how it is labeled
 Generally consistent with bell curve concept
Four Levels
 Excludes a ‘middle’ rating, which is often perceived as
 May skew raters positively or negatively if levels are not
average or negatively
 Can allow for levels of ‘exceeds’, ‘fully meets’, ‘less than
fully meets’, ‘does not meet’ (i.e. performance plan..)
 A good approach for organizations that want to build a
‘most’ of our employees (e.g. 70- 80%) meet or fully meet
expectations culture, and/or focus primarily on high/low
 Fewer choices helps result in more rater consistency as
long as the level are well defined
defined well
 May foster central tendency to 2nd highest level, although
this is usually a fully acceptable employee, and is the intent
of the organization
 Oftentimes, only three levels are used in actual practice.
4th level is typically for individuals too new in position to
evaluate or, more likely, individuals on a performance plan
which often lead to termination.
Three Levels
 More consistency among raters when few choices
 Third level often needs clarification for use in probation,
 Typically, ease of completion and decision making among discipline or dismissal if top two are more positive
raters
 Does not allow differentiation of a top 5-10% or so, if this
is truly the case and Company wants to recognize them
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Example of 3 Stage or Level Behavioral Competency
Behavioral Competency: ‘Managing Conflict’:
Definition: Deals effectively with others in potentially antagonistic situations; uses appropriate
interpersonal techniques and methods to reduce tension and conflict among team members.
Needs Improvement
Meets Expectations*
Exceeds Expectation
 Does not always
recognize when conflict
exists or probe for
interests of conflicting
parties
 Sometimes appears to
avoid conflict, or allows
it to expand when early
intervention could help
 Focuses too much on
own interests rather
than more broadly
seeking other interests
 Allows or fosters
win/lose situations
rather than seeking
compromise
 Personalizes conflicts or
becomes defensive
 Identifies when a conflict
occurs and takes steps to
address it
 Accurately assesses when to
get involved and when to let
parties resolve the matter on
their own
 Recognizes differing interests
and viewpoints, and allows
expression of these in
respectful manner
 Recognizes potentially
harmful or illegal (violence,
dangerous, harassment, etc.)
situations and takes
appropriate action
 Assists parties to achieve
mutually acceptable ‘win-win’
solutions
 Highly skilled in recognizing
early warning signs and takes
appropriate steps to prevent
issues before they escalate
 Excels in transforming conflict
into problem solving;
insightfully diagnoses creative
and effective solutions well
accepted by others
 Creates environment where
differences are valued and
used to achieve superior
results
 Proactively uses positive
constructive techniques to help
team members anticipate and
effectively address potential
conflicts
* Common alternatives: ‘Solid performer’, ‘Fully acceptable’. Used if building a culture in
which ‘most’ (70% to 80%) of employees are performing as generally expected.
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Sample Technical Competency Model Development Process
Best Practice Technical Competency Model Steps include:
 Review corporate goals and talent management strategy analysis/development
 Purposes of competencies (including alignment with other HR programs)
 Identify job families and feasibility of process, inclusion, timing, etc.
 Conduct job and work process analysis (as noted earlier)
 Identify / define technical competencies (JA, tech panels, high performers, etc.)
 Define proficiency standards, levels and career profiles: typically 4 - 5 levels for
technical competencies (JA, tech panels, standard models, high performers)
 Validate models (correlation, review of results, surveys etc.)
 Develop total framework of competencies and levels (see next slides)
 Incorporate into HR programs (recruitment, development, pay etc.)
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Sample Technical Competency Levels / Model
 From Sample Software Engineer Technical Competencies (see earlier slide
#5 in this document), below are sample ‘4 level’ competency descriptors for:
 Software Design and Coding
 Software Testing
Competency
Level I
Software
Design and
Coding
Develops/updates
basic design
documents. Debugs
code for basic C++;
familiar with coding
tasks, rules,
standards. Creates
diagrams. Familiar
with SW development
tools and process.
Tests basic software
code for operational
effectiveness and
system integration.
Prepares initial
software test
documents for
standard applications.
Software
Testing
Level II
Level III
Level IV
Develops/updates
moderately more
complex designs.
Writes and debugs
code for various C,
C++. Knows coding
standards. Creates
diagrams; applies
higher level SW tools
Implements
requirements to
develop, update
complex documents;
works with higher
level and complex
coding standards
and diagrams.
Proficient in highest
level SW tools.
Leads development,
creation, updating of all
SW design requirement
documents. Serves as
role model in adhering
to highest standard
development
processes. Designs,
debugs most complex
software.
Tests moderate
complexity software
code for embedded
systems and manuals.
Prepares SW for
integration testing.
Conducts performance,
measurement and
validation
Advanced
proficiency in testing
multiple program
units concurrently.
High level use of
flowcharts to design
overall test units
used by all units.
Directly leads and
oversees all testing of
software code in his/her
programs and projects.
Releases fully tested
production and beta
level software design.
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Competencies in Salary Planning Using Pay Structures
 Now that we’ve discussed competencies – behavior and technical –
AND their alignment with other HR functions and services,
 It is important to explain and understand how competencies,
competency models and, shortly, other components of jobs work
within the context of:
• Various Types of Salary Structures
• Career Path and Level Guides
 The following several slides introduce Salary Structures and best
practices regarding how behavioral and technical competencies
and models can work within these structures.
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3 Primary ‘Types’ of Salary Structures: Grades, Bands
Definition: Salary or Band ‘Range’
 The dollar amount extent (minimum to maximum) an organization will pay for jobs
assigned to that band or range within a given pay structure.
 Type 1. Traditional Grades: (most prevalent; used by 60% to 70% of companies)
 Traditional grade structures typically have approx12 to 20 grades, are
somewhat narrow: ‘Ranges’ typically 30% (nonexempt) to 60% (management).
 Below is an example of a traditional grade, with a min to max range of $40,000
to $60,000, or 50% ($60,000-$40,000 = $20,000 = 50% of $40,000)
Minimum
1st Quartile
Midpoint
3rd Quartile
Maximum
$40,000
$45,000
$50,000
$55,000
$60,000
Common Advantages:
 Cost Control (lower ‘range’ and maximum)
 More Accurate Matching of Market Data with Grade Midpoint (More Grades)
 ‘Promotions’ to higher grades are easily defined
Common Disadvantages:
 Often need more grades to represent full spectrum of market pay data.
 Increased tendency for ‘reclassification requests’ even when minor job changes
 Transfers can be more difficult because of so many grades; narrower platform for competency pay.
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3 Primary ‘Types’ of Salary Structures: Grades, Bands
Type 2. ‘Wide’ (or ‘Wider’) Grades: (used by approx 20% to 25% of companies)
 Wide grade structures typically have approx 10-12 to 18-20 grades with somewhat
wider ranges of ‘typically 40% (nonexempt) to 100% (management).
 Below is an example of a traditional grade, with a min to max range of $80,000 to
$144,000, or 80% ($144,000-$80,000 = $64,000 = 80% of $80,000)
Minimum
1st Quartile
Midpoint
3rd Quartile
Maximum
$80,000
$196,000
$102,000
$118,000
$144,000
Common Advantages
 Ability to capture/award higher levels of market pay (higher max)
 Can better differentiate pay on various factors: performance, competencies, experience
 Often a sometimes better platform for person-centered (competencies) or hybrid/alternate
pay approaches (e.g. behavioral competencies plus steps) and pay adjustments
 Administrative / managerial flexibility; career/pay growth if limited promotional growth
Common Disadvantages:
 Potential increased costs, cost control and/or admin management due to higher maximums
 Usually fewer grades; more midpoint variance of a job’s grade assignment from market
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3 Primary ‘Types’ of Salary Structures: Grades, Bands
Type 3. Salary ‘Bands’: (Note: now used by less than 15% of reporting companies)
 A 1990s+ trend involving consolidation of two or more ‘grades’ into fewer but
much wider ‘bands’, typically used to develop ‘levels’ or ‘job families’.
 Typically involve 3 to 5 ‘market’ or ‘control’ points within the wider Band Range
(100% to 300%) as ‘anchors’ for given job values in a career path, job family.
200% Range: 4 ‘Market/Control’ Points ($150,000-$50,000=$100,000= 200% of $50,000)
Minimum
Market Pt. A
Market Pt. B
Market Pt. C
Market Pt. D
Maximum
$50,000
$70,000
$90,000
$110,000
$130,000
$150,000
Common Advantages
 Enhanced support of person-based career development and progression within a job family/group
 Decreased emphasis on promotions; sometimes easier transfer of employees across divisions, depts.
De-emphasizes organizational hierarchy; flexible platform for person-based pay
Common Disadvantages
 Requires higher managerial cost control/focus on competencies, performance, pay policy, control etc.
 Control points still usually based on job evaluation approach (e.g. market data etc – i.e. why do this?)
 Promotions can be harder to define, may involve only mid-band (market point) changes, etc.
 Typically requires high commitment to employee career and competency development
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Final Comments on Salary Structures
(Most small to midsize companies have 1 or 2 structures, except for geographic indexes)
 Grades or bands within a given salary structure typically ‘overlap’
based on the established ‘midpoint progression’ of each grade.
 Example below: 50% grades overlap by 10% midpoint progression.
Grade
4
5
6
Min
1st Q
Midpt
3rd Q
Max
25,000
27,500
30,000
Min
1st Q
Midpt
3rd Q
Max
22,000
24,750
27,500
30,500
33,000
Min
1st Q
Midpt
3rd Q
Max
24,200
27,225
30,250
33,275
$36,300
$20,000 22,500
 Greater salary range midpoint progression (e.g. 16% to 20%+) =
 Fewer grades to represent total pay spectrum of all jobs in the structure
 Sometimes requires clarification of what constitutes a ‘promotion’
 Smaller salary range midpoint progression (e.g. <10% to 15%)
 More grades needed to represent total pay spectrum of all jobs in structure
 Easier clarification of what constitutes a ‘promotion’
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Example of 5 HR 4-Stage ‘Tech Competencies’ Required for Job
Levels in HR Generalist Career Path Level Guide & Pay Grades
Similar to prior page, except these are sample HR technical competencies.
Each ‘Stage’ of an HR Technical Competency should be assessed / attained
prior to moving/promotion to the next level (e.g. HR Generalist II, III, etc.) job
BAND / GRADE (Example)
LEVEL
Recruitment/Selection
Employee Relations
Compensation & Benefits
Compliance
Organizational
Development
8
HR Generalist I
10
HR Generalist II
12
Sr. HR Genralist
15
HR Consultant
Stage I
Stage II
Stage III
Stage IV
Stage I
Stage II
Stage III
Stage IV
Stage I
Stage II
Stage III
Stage IV
Stage I
Stage II
Stage III
Stage IV
Stage I
Stage II
Stage III
Stage IV
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Alternative: 5 HR 4-Stage ‘Tech Competencies’ Required for Job
Levels in HR Generalist Career Path Level Guide & Pay Grades
In this sample company’s HR technical 4-stage competency model, each
competency stage is not needed to correlate with a new HR Generalist role.
BAND / GRADE (Example)
LEVEL
Recruitment/Selection
Employee Relations
Compensation & Benefits
8
HR Generalist I
10
HR Generalist II
12
Sr. HR Genralist
15
HR Consultant
Stage I
Stage II
Stage III
Stage IV
Stage I
Stage II
Stage III
Stage IV
Stage I
Stage I
Stage II
Stage III
Stage I
Stage II
Stage III
Stage I
Stage II
Stage II
Compliance
---
Organizational
Development
---
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Best Practices: Linking Competencies to Fixed & Variable Pay
Recent Best Practice Research Data Indicates:
 Approximately 60% to 70% of organizations have linkage between
competency ratings/proficiency and base salary adjustments
 Approximately half (50%) of the companies linking competencies to salary
adjustments do so ‘informally’, or use ‘guidelines’ rather than strict amounts
or percentages (providing operating managers some flexibility)
 Whether ‘guidelines’, ‘strict percentages’, or ‘increase ‘ranges’, approximately
60%+ of organizations linking competencies to salary use one of the following:
 Factor for salary adjustments within job ranges (most common)
• Behavioral with or w/o technical competencies, or include goal attainment
 Competency levels are aligned with ‘target salary’ or ‘pay zone’ within bands
 Developmental pay increases are typically separate from, but often added
to, performance increases
 Approximately 40% of competencies link competency ratings to variable pay,
commonly as small ‘development bonuses’ or ‘incentive award modifiers’.
 Approx 70%+ of companies use competencies (usually ‘technical’, but also
‘behavioral’) as factors in promotion to a higher grade
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Sample Salary Grade Progression ‘Guideline’ based on
Behavioral and/or Technical Competency Rating/Proficiency
Salary Range Quartiles (50% range Min to Max)
Min: $60,000
1st Q $67,500
First Quartile
Midpt: $75,000
Second Quartile
3rd Q: $82,500
Third Quartile
Max: $90,000
Fourth Quartile
Sample Guideline for Salary Progression Scale within Band / Range Above
Stage I
Stage II
Stage III
Average Overall Behavioral Competency Rating Scale ↑
Stage I
Stage II
Stage III
Stage IV
Average Overall Technical Competency Rating Scale ↑
Relevant ‘Guidelines’ Research Data regarding Increase for Top Performers:
 Approx 25% of companies establish 125% of average increase for top performers
 Approx 50% of companies establish 150% of average increase for top performers.
 Approx 20% of companies establish 200% of average increase for top performers
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Sample Competency Pay-Based Adaptation of Merit Matrix
Sample Approach to Annual Base Salary Increase/Adjustment in a Pay Grade:
(Behavioral competencies/factors are used similarly for increase guidelines in 60% of companies)
Position
in Salary
Range:
Top Third
Structure only
increase
Average to
Slightly Below
Average Increase
Lump Sum
Similar to
Average
Middle Third
Structure only
Increase
Average Pay
Increase (e.g. 3%)
Above Average Pay
Increase (Average
+1%-2%)
Bottom Third
No Increase
or
Structure Only
Increase
Above Average
Pay Increase
(Average + 1%2%)
Large Pay
Increase (Average
plus 3%-5%)
Low
Mid
High
Separate Behavioral (primarily) OR Combined Competency (Behavioral/Technical) Rating
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Competency ‘Blocks’ Can Use Fixed Dollar Amounts or
Percentages in Pay Bands (note: less often used due to complexity)
 Each
level of each competency attainment is affiliated with either a fixed
dollar amount or a percentage of the total width of the salary range
 Alternatively, or in tandem with this approach, employees may receive a
‘one time’ (lump sum) award for attaining new competency levels
Level 5
‘X’ % of
Range or $
Level 4
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
Level 3
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
Level 2
‘X’ % of
Range or $
‘X’ % of
Range or $
Level 1
‘X’ % of
Range or $
Competency
‘A’
Range
Minimum
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
‘X’ % of
Range or $
Competency
‘B’
Competency
‘C’
Competency
‘D’
Competency
‘E’
Competency
‘F’
Range
Maximum
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Competencies in Career Path, Salary Increases, Level Guides
 Now that we’ve discussed competencies – behavior and technical – AND
their alignment with other HR functions and services,
AND their potential application to salary structures pay adjustments,
 It is important to explain and understand how competencies & models
and other components of jobs work within the context of Career Path
and Level Guides along with salary progression.
 Key Points and Distinction:
 Behavioral Competencies are most often used to adjust salary for an
employee within his or her assigned grade range in a structure.
• i.e. Traditional performance evaluation allows moving ‘through’ range.
 Technical Competencies are most often used in establishing and
defining (and promoting into) various levels in a Career Path / Level
Guide along with other job components.
• The following slides introduce best practice Career Path Level Guides
using both Technical Competencies and Other Job Components.
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Other Key Job Components in Establishing Career Path
Level Guides
 It is important to now identify those job components commonly used in
tandem with competencies, other HR functions, and pay structures to
establish Career Path Level Guides, which can further enhance any
company’s approach to total career development for employees
AND
 How all these factors, working collaboratively, directly contribute to
 Employee career satisfaction
 Enhanced employee efficiency, proficiency, motivation, retention
 And, ultimately, using our most important resource – our employees –
to achieve corporate success – operationally and financially.
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Other Key Job Components in Establishing Career Path
Level Guides
There are several additional job components that are important, research
Indicates, and approximately 70% of ‘best practice’ companies anchor their
Career Path Level Guides with the following:
 Technical Competencies (as discussed herein so far)
 Overall Scope and Basic Roles and Responsibilities of one’s job
 Financial, Decision-Making and other levels of Authority
 Primary Internal and External Level of Interface and Communications –
including written and face to face.
 Report Levels – Upwards & Downwards (Level/Number of Reports)
 Minimum and Preferred Level of 1) Education and 2) Experience
HOW? – Sample on Next Slide
Ideally, EACH of the Above Components should be briefly described within
EACH of the levels in a Job Family Career Path Level Guide
(use Job Analysis, Expert Panels, Consultants, Adapt Std Models, etc.)
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Job Components in Sample Accting Career Path Level Guide
Position Preferred
/Title
/Minimum
(Accting) Education
Minimum
Years of
Related
Experience
Director/
Sr.
Manager
MBA
required
Generally,
12 to 15+
years
Manager
B.S. Accting
or Finance,
MBA
Preferred
10 to 12
years
B.S. Accting
or Finance,
Supervisor
MBA
Preferred
8 to 10
years
B.S. Accting 6 to 8 years
Lead
or Finance;
related
Accountant
start MBA experience
Senior
B.S. Accting
Accountant or Finance
4 to 6 years
related
experience
2 to 4 years
Intermed B.S. Accting
related
Accountant or Finance
experience
Associate B.S. Accting
Accountant or Finance
< 2 years
related
experience
Salary
Grade
15
13
12
11
10
9
8
Grade
Midpoint
Tech
Comptcy
#1
Tech
Comptcy
#2
Tech
Tech
Roles,
Level Fin Level/Type
Report
Comptcy Comptcy
Job
and Ops of Int/Ext Level/Staff
#3
#4
Respons Decisions Commun Managemnt
$140,000
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
Level 3
xxxxxxxxxxxxx
xxxxxxxxxxxxx
xxxxxxxxxxxxx
xxxxxxxxxxx
Etc.
Etc.
Etc.
Etc.
Etc.
$116,000
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxx
xxxxxxxxxxxxxx
Level 2
xxxxxxxxxxxxxx
xxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxx
xxxxxxxxxxxxxx
Etc.
Etc.
Etc.
Etc.
Etc.
$104,000
Etc.
Level 1
Level 5
xxxxxxxxxxxxxx xxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxx xxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxx xxxxxxxxxxxxx
xxxxx
x
xxxx
Etc.
Etc.
Etc.
Etc.
Etc.
$95,000
Level 4
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xx
Etc.
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxx
N/A
Etc.
Etc.
Etc.
Etc.
Etc.
$82,000
Level 3
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxx
Etc.
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxx
N/A
Etc.
Etc.
Etc.
Etc.
Etc.
$68,000
Level 2
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
x
Level 2
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
x
N/A
Etc.
Etc.
Etc.
Etc.
Etc.
$56,000
Level 1
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx
xxx
Level 1
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xxxxxxxxxxxxxx
xx
N/A
Etc.
Etc.
Etc.
Etc.
Etc.
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Limited Time to Develop Competency Descriptors? Go Generic
Generic Competency Level Descriptors
5
Demonstrates comprehensive, expert
knowledge; applies competency level in
exceptionally difficult situations; serves
as internal resource and advises others.
4
Demonstrates broad understanding and
application of the competency in
difficult situations; generally requires
no or only limited oversight. Provides
guidance to lower levels.
3
Demonstrates solid understanding,
proficiency and application of the
competency in standard or expected
situations. Generally involves periodic
oversight and review by Supervisor or
Manager.
2
Demonstrates understanding and
application of the competency in some
basic or standard situations. Frequent
ongoing review of all work by
Supervisors or Team Leader.
1
General awareness and/or application
of the competency in basic or simple
situations. Close and extensive
guidance regularly required by exempt
and/or higher level professionals.
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Career ‘lattices’ (lateral moves) allow career paths to become
communications vehicles for demonstrating opportunity
Project
Manager
CAREER LADDERS
Senior Planning Manager
Service Level
Manager
Project
Leader
Sr. Business
Analyst
Sr. Rel. Mgmt.
Specialist
Sr. Tech Trainers
Sr. Tech
Writers
Sr. App
Tester
Business
Analyst
Rel. Mgmt.
Specialist
Tech Trainer II
Tech Writer II
App Tester II
App Analyst II
Client Support
Specialist
Tech Trainer I
Tech Writer I
App Tester I
App Analyst I
Sr. Client
Support Analyst
Planning
Manager
Planner
Client
Support Analyst
CAREER LATTICES
Walby and Associates LLC
Best Practice / Successful Competency Pay Communications
 Enlist full top management support throughout program development
 Plan the Communications Strategy: Message, Meetings, Media, Timing
 Most companies use various group meetings to outline program basics
 Company compensation strategy should be included in all group mtgs
 Ensure understanding of alignment of competencies within the
company’s performance management system
 Most companies do not disclose the entire salary structure in meetings
 Companies claiming highest program success engage in one-to-one
meetings between manager and employee following larger group mtgs
 Employees should understand their grade and pay range, where they are
in the range and why, know the standard ‘career path’ (and alternatives)
within their discipline, how to progress further in range and be promoted
 Conduct follow-up surveys of all participants: compare evaluations by
level (e.g. management vs. exempt) and by department
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Competency-based and Other Salary Management Best Practices
Thank You Very Much for Attending!!
Further Questions or Discussion?
Please see Brian when session is completed.
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