There are really no steadfast rules when it comes to working out employee salaries—and that can be a problem. In essence, someone new could come along to your team, and determining what to pay them can be greeted with a shoulder shrug and a guesstimate. In a post at the Accidental Successful CIO, Jim Anderson asks if it is time for CIOs to start applying logic to salaries.
Salaries Need to Make Sense
Salaried positions are incredibly open to variability considering the power the hiring manager has in how much an employee gets paid. These variations in pay can be attributed to many different factors, such as skill and performance. They have recently gained CIOs’ attention due to improvements in fair-pay laws and overall lack of formal methods for determining salaries. Haphazard salary-assigning structure could create a lack of trust in the employee, who would not be able to determine why he or she is getting paid that set amount. If it’s all on instincts and “gut feelings” about a person without anyway to check it, then there is a strong chance that bias can creep into the hiring process.
To combat this, there are a couple of actions that can be taken. Reviewing salaries on a regular basis can help remove any gender pay gaps that may show up, for one. Anderson also includes how most companies traditionally determine salary:
At many companies, the way that the salary for a given job is determined is based on what the company was paying the last person who had the job. What many companies try to do is to pay at the 50th percentile level for a job with a spread of 20% on either side in order to account for a worker’s skills and experience.
He stresses how a company needs access to outside pay data in order to create a sensible pay system in the eyes of employees. This will ultimately require some level of transparency on your part so employees can know if they are being paid the right amount. As a CIO, you need to create a compensation structure that makes sense and will be easy for your employees to follow.
You can view the original post here: http://theaccidentalsuccessfulcio.com/management-2/is-it-time-for-cios-to-start-to-apply-logic-to-salaries