|
Classified Employee Pay Plan
Classified Employee Payroll Clerk Reference file 
Exempt Employee Pay Plan
 Other Pay Plans -
CBE Employees
Fire Fighter Employees
Tax Collector Exempt Employees
DOES PAY STRUCTURE MATTER?
Rule 5 - The Pay Plan
Your Benefits and Compensation
a monthly column in The Pen Newsletter covering Benefit & Compensation topics
DOES PAY STRUCTURE MATTER?
Compensation systems currently are seen as a source of potential competitive advantage. It should be understood that organizations have discretion in compensation decision making and that the decisions made have an impact on employee attitudes and behaviors, costs and organizational success.
The strategic approach for organizations is making choices on a broad range of pay issues, including pay structure. Choosing a pay structure that allows optimum upward mobility while still achieving the organizations overall objectives can be tricky. There are two broad types of pay structure: 1) those that have fewer levels and smaller differentiation between levels of the highest and lowest paid employee; and 2) a structure that has more levels and greater differences between them.
Pay structure needs to be organizationally linked to the overall business plan and be industry competitive. The most important driver of pay plans is cost. Currently public sector employers spend more than 50% and sometimes as much as 80% of their total operating budget on employee compensation including base salaries, employee benefits and any other special features of the total compensation package. When one spends that percentage of their total resources on a single item, it only makes sense that the money be spent in a way that achieves some defined goal.
Designing plans bring perception issues to consider, a few of them are internal fairness, distinctions in work performance and rewarding those that meet or exceed performance standards.
In designing a pay structure, a job rate (the market value of the position or job) is defined, a salary range is developed and employees, who meet or exceed performance standards for that job, can progress through the salary range or grade. However, any compensation above the job rate must relate to and support the organization’s strategic objectives or business plan. The result of this change is that compensation dollars are more closely tied to achievement of organizational and individual performance goals and objectives, and less to longevity or entitlement.
Pay structure is important. It is a direct link between employee attitudes and behaviors that the organization seeks to influence through its compensation system. It can affect different types of employees, work settings, employee performance and job satisfaction. Unless these issues are reviewed, paying people based on concepts and a philosophy that is no longer relevant can result in spending organizational resources without any tangible benefits. For a pay system to fully succeed, it needs to be monitored and adjusted as appropriate.
 top of page
|
| About Pinellas