Having a formal plan can alleviate many possible issues in salary administration and other forms of compensation. It’s an important step in ensuring employee pay and benefits are efficient, fair and documented.
With no clear regulation regarding what constitutes “similar jobs,” problems can occur with employees challenging equity in pay and benefits. With a salary administration plan, employers address what they pay for specific jobs and if it’s competitive in their industry. It also helps employers structure pay, so jobs across departments are compensated fairly to both employees and employer. Finally, salary administration plans help employers organize their compensation strategies to attack competitive pressures for talent.
With this strategic management tool, you are working toward ensuring employee wage satisfaction and employee retention, addressing equity concerns, enabling clearer career pathing for employees and taking control of your compensation administration.
A salary administration plan is a formal policy that helps your financial organization equitably administer salaries and other compensation across your unique job categories and titles. Salary administration plans document your institution’s view of equivalent jobs and how salaries are established for each job and job level as well as across departments.
With a fully developed salary administration policy, you can ensure that officer titles do not become a default job grading system. This can help ward off concerns about pay discrimination.
The steps in the process of salary and other compensation plan administration typically begin with job analysis. Job descriptions need to all have the same definition of the job. The job’s responsibilities and qualifications, as well as preferred skills and experience are key here.
Once the job is defined, the next step is to compare jobs. Which ones have similar responsibilities and qualifications and needed skills and experience? Would moving from one job to another be a promotion, demotion or transfer?
Finally, how does salary come into play? What has the financial institution historically paid? Was this history primarily driven by a star talent or by the actual job? What does the competition typically pay for this job in your industry and market? The answers to these questions drive the final tweaks to the plan.
Do you have a well-defined salary administration plan? Young & Associates has in-depth, diverse experience working with financial institutions, including banks and credit unions. We know the many hats our clients’ employees wear. Our consultants, largely comprised of former financial institution executives with vast, real-world experience, are uniquely qualified to help. We can assist you in planning and administration, giving you confidence in your institution’s salary management. Young & Associates salary administration plan services include:
Young & Associates can help your financial institution with creation and administration of plans to help attract, retain and motivate employees. Contact us to see how we can help your organization with a salary administration plan.