a realistic model, equitably applied

Analysis first!

Skillful implementation might be more important than the design and development of the program itself. Over the past 25 years, we’ve seen many different approaches to implementation. Regardless of the eventual decisions made, though, a sound analysis before taking any action is critical. We’ll want you to first consider:

  • The target level of pay for each employee
  • The cost to bring employee pay to critical points in a new structure
  • The costs attributable to pay above appropriate levels

The components of the Merces’ compensation approach provide all of the information needed to conduct the analysis:

  • Pay structures: Reflecting the internal and external “value” of each job, and establishing ranges of pay for different levels of on-going performance
  • Job descriptions: Providing the framework for performance management, so a “baseline evaluation” on employees can determine what part of the range is appropriate for each one’s performance.
  • Current compensation: Compared to the target segment of the range.

A strategy and a model

Merces builds models using current staffing information to determine the cost of payroll at various levels of performance; this is critical for proper budgeting. A variety of models can be tested to determine the funds necessary for an effective implementation or to determine equitable ways to distribute whatever funds are available. Once information is available, Merces works with you to establish and carry out an implementation strategy. Our first recommendation is always to bring employees up to at least the minimum of the new pay ranges. This accomplishes two major objectives:

  • It represents a commitment by the organization to pay what has been determined to be a fair level of pay, even if not required in order to retain staff.
  • It establishes a floor so that new employees are not hired at rates higher than current employees (unless performance is accounted for).

Significant considerations in the development of the strategy include:

  • Identifying any groups of employees that might be “protected classes” (e.g., women, minorities, older employees) whose pay is not at the same percent of target as other groups.
  • Determining whether difficulties in recruitment or retention of employees in any particular jobs or career paths require immediate attention.
  • Considering strategic and operational plans and determining if any particular functional area, or any “type” of employees (executive, middle management, professionals, administrative staff) are particularly at risk if not brought into line.

Applied equitably

After any special considerations have been addressed, it is essential to apply the implementation strategy equitably across the entire population to ensure fairness. Merces can build multi-year implementation models and assist organizations with long-term implementation efforts.