Editorial: Thoughts on compensation
Some common policies display no common-sense. Mark Zweig exposes four problems and offers solutions.
It’s interesting to me how so many A/E firms seem to just follow the same unwritten rules about how to pay their people – year after year – no matter what’s happening in the outside world. It’s pretty wacky, actually, that our compensation schemes haven’t changed much in 50 or 60 years! You would think we would have learned something!
Here’s where most A/E and environmental consulting firms are going wrong:
Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at email@example.com.
This article first appeared in The Zweig Letter (ISSN 1068-1310), issue #1014, originally published 7/8/2013. Copyright© 2013, ZweigWhite. All rights reserved.
Once a year pay reviews. There is no way in the current job market that this is frequent enough – especially for younger folks who are early in their careers but also for anyone who is early in their career at your company. You didn’t know what they could do until you brought them on board. If they are making it happen, take care of them and show you recognize it. They will appreciate you as an employer more so and be more likely to believe that hard work and performing pays off. Break away from the mold. Give raises when they are deserved and only when they are deserved – not at some set time every year because that makes budgeting easy. And speaking of budgets – give your managers a raise budget and let them use it how they see fit. Don’t have a committee of people who don’t even know the employee in question and certainly aren’t responsible for the results of that business unit reviewing all raises and second-guessing the manager of the unit!
Pay scales based on position. Why does anyone think it is a good idea to tell “Engineer 2” that the most he or she can ever make is $61,531 a year? All that accomplishes is... nothing! Correction: It could well demotivate the employee and make them feel like there’s nothing they can do there to better their position. Some HR folks love these pay scales. I’m not one of them! And before you write in and tell me your DOT clients demand rigid pay scales, don’t get confused about the difference in billing rates and pay rates. There’s no need to make your pay schemes reflect those of your bureaucratic government clients.
Different benefits for different classes of people. Some firms like to have special parking places or different insurance co-pays for different classes of people. Unless it is a tool that is needed for work, all these things do is demotivate everyone else. Let’s face it – the higher level people make more money. They can buy their executive dry cleaning on their own nickel!
Lack of common sense. I see a lot of this. If someone is underpaid, pay them properly. Don’t wait for the once-a-year pay review if you risk losing the employee. If someone is overpaid, either get them functioning to where they are worth what they’re getting paid or give them a choice of reducing their pay or moving out. Don’t share pay data with other employees. All it will do is upset them. Don’t act like a .50/hr raise is a big deal – it isn’t. Don’t violate the Fair Labor Standards Act and try to pay people a salary who should be hourly. And while I’m on that subject, don’t pay your salaried people for every overtime hour they work and then expect them to not behave like unionized blue collar workers. I assure you they will – and you will have contributed to the problem!
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