Competency-Based and Other Salary Management Best Practices

Brian Walby, Ph.D., CCP, Consultant to American Society of Employers

Format and Topics for Today*

Format :  Presentation: Best practices - competency-based pay and salary management  Most discussion and questions at end on any topic (and after the session)  High level and many topics; cannot delve into depth in time period we have Topics: 

Competency-Based & Other Salary Management Best Practices (key focus)

Aligning these with:  Compensation Strategy / Philosophy  Behavioral and Technical Competencies  Career Pathing  Performance Management  Other HR Programs * Note: Each company must determine a salary management program that is most appropriate for its own culture, business, preferences, etc. Information, content, concepts, etc. discussed today are generally consistent with best practices as endorsed by World at Work (Brian Walby – Lifetime Member) as well as most major HR/Compensation consulting firms.

Walby and Associates LLC

1 1

Best Practice ‘Sequential Phases’ in Salary Planning

 1. Project Plan/Management: Staffing, tasks, roles, timing, methodology 

2. Compensation Strategy / Philosophy (key – topics on next slide)

 3. Job Analysis (JA): Gather key job duties, responsibilities, requirements  4. Job Documentation/Descriptions (JD): Formatting job analysis data  5. Job Evaluation: Market pricing [U.S.] or Job content [points] analysis  6. Pay Structure Development: Traditional grades, Wide grades, Bands  7. Assign/Slot Jobs Into Structure: Market pricing and Internal equity  8. Program/Plan Communications: Messages, media, meetings, etc.  9. Program/Plan Implementation: HRIS/Payroll, Pay management programs/systems, Transactions/process, HR staff roles, etc.

Walby and Associates LLC

2

Compensation Strategy / Philosophy

Key Components of an Effective Compensation Strategy/Philosophy

(provides framework upon which pay policies are developed)  Company mission, values, objectives  Frame of comparative reference  Size, industry/sector, geographic index of comparator companies  Mix of, market target (e.g. 50 th %ile) and approach per pay element:  Base (85% use 50 th ) , Annual, Long Term Incentives, Benefits, Perquisites  Specific Considerations re: Base Salary (build Policies from Strategy)  Pay structure(s), pay drivers (e.g. merit, competencies), position in range per experience / performance.  Compensation communications (

who

will know and

what

they will know) (Note: Approx 2/3 of companies have written comp strategies; >90% have written or unwritten)

Walby and Associates LLC

3

Best Practices/Key Data Capture in Job Analysis/Descriptions

 Conduct Full Job Analysis (JA) every 3 to 4 yeas 

Each

year give incumbents and managers opportunity to review/modify JDs  JDs developed from JAs should provide 3-4 sentence job summary/overview  JD should also provide the 5 to 7 key functions comprising 70-80% of the job • Functions/responsibilities should provide identification of competencies  Other Sections to include on JA / JD for optimal legal and HR use (W&A can provide sample templates) • • • • • Job Title Department/Function Division or Business Unit (if applicable) Minimum and Preferred Education / Training Minimum and Preferred Experience / Skills · Job Code · FLSA Status · Reports to (Title) · Non-essential, functions · Internal/External Contacts • • • Use of Discretion and Judgment (For FLSA) . Effective date Who JD was Prepared by, Reviewed and Approved by (Function and HR) Mental, Physical Demands, Work Conditions (for ADA, if/as needed)

Walby and Associates LLC

4

Competencies

Definition



Behavioral competency:

Any incumbent employee behavior that is readily observable, measurable and characteristic of successful performers in a job, role, company or culture. [WorldatWork]  e.g. Leadership, Interpersonal Skills, Flexibility, Initiative, Team-oriented, etc.



Technical competency:

Any underlying major bodies of knowledge or skills needed to perform a particular type and level of technical work activity. Often assessed by job analysis, work output evaluation, work observation, technical review, and/or other structured testing. Typically viewed as ‘necessary but not sufficient’ to

fully

evaluate employees.  e.g. Technical competencies for

software engineers

often include: • • • • • Software requirements Software design and coding Software testing Software maintenance Software management

Walby and Associates LLC

5

Competencies (continued)

Competency ‘Model’ Definition

 A

set

of competencies that can apply to an entire organization or to a particular job family, such as finance, purchasing, engineering, HR, etc.  A ‘model’ describes differentiating performance

behaviors

or

skills / knowledge.

Typically includes 6 to 10 competencies.

technical

 Each competency may have several ‘levels’ of proficiency  Competency models for a given company may be developed either: 

Organically :

Unique to a given company by job analysis (on-site observation or job analysis forms), expert panels, focus groups, etc. And / Or 

Generically :

Using and/or modifying pre-established or standardized models from professional or trade associations, consulting firms etc.

Walby and Associates LLC

6

Competency Use or Planned Use Within HR Functions

Recent research indicates competencies are increasingly used across various HR functions 100% 90 80 70 60 50 40 30 20 10 Prevalence/ Percentage of Companies Career Planning / Pathing Recruitmen t / Selection Training and Development Performance Managemen t Talent Management/ Succession Compensatio n

Walby and Associates LLC

7

‘How’ It’s Done – Coordinated Competency Use Across Various HR Functions

Develop Technical & Behavioral Competencies, Job Roles and Functions Conduct Candidate Assessment & Selection Establish Total Compensation and Talent Strategy to Support Business Success Aligned and Coordinated Competency Use Across Various HR Functions Implement Performance Management Program Create Career Planning and Pathing Level Guides Within Salary Structure Walby and Associates LLC

8

Common Advantages: Aligned Competency Use Across HR Functions

 Companies / employees focus on development of skills, knowledge and behaviors

with greatest impact on strategic corporate objectives

 Talent Management/HR functions / processes / policies regularly developed/modified in consideration of common elements & ‘big picture’  Employees view their position, responsibilities, career pathing in context of the total organization, and see themselves as key component  Enhances recruitment, retention, motivation of higher caliber candidates and employees  Contributes to (correlation with) employee efficiency/performance, corporate financial/operational performance, and customer satisfaction/ retention

Walby and Associates LLC

9

Know the Link Between Goals and Behavioral Competencies

Goal Setting: Goals, Measures and Behaviors

 Corporate and other Goals Drive Measures  Measures, in turn, drive Behaviors (i.e., you are likely to get what you measure, especially if you pay for what you measure)  Ensure your process begins with corporate strategy and goals

Goals Measures Behaviors

Expectancy Theory:

 Performance (behaviors/competencies) most likely to improve when employees:  Have ability to perform  Have clear understanding of what is expected (Corporate, Division, Individual Goals)  Receive constructive feedback and reinforcement  Have adequate support (tools, equipment, budgets, etc.)  Believe additional effort will result in improved performance (individual/group)  Believe improved behaviors and competencies will be rewarded

Walby and Associates LLC

10

‘Best Practice’ Methods to Create Company Competency Models

 Job Analysis (JA) or Job Description Analysis (behavioral/technical):  Review of JA forms or JDs by experienced HR staff or consultants to identify key and common competencies across various positions and/or levels 

Can also or further define levels by methods below or in combination:

 Modify / Adapt Standardized Models (behavioral/technical):  Compare JA and JDs against competencies from standardized sources including compensation surveys or professional & trade association models.  Focus Groups (primarily for behavioral competencies):  Facilitate groups of high performers with standardized questions regarding what and how a given function or responsibility is successfully completed.

 Tech Panels/Tech Workflow/Output Review/Observation/Documentation of needed competencies for business processes (tech competencies).  Panels or document review by strong performers or functional managers to identify/confirm/modify job family/career path specific tech skills/knowledge.

 Behavioral Event Interviews (behavioral/technical; time consuming):  ‘BEIs’: Individual interviews with successful incumbents to extract behavioral or technical competencies from work experiences described.

Walby and Associates LLC

11

Behavioral

Competencies: Developing Standards/Models

Effective Behavioral Competencies and Standards should be:  Written: Helps to ensure employee understanding and commitment  Aligned: with Organizational Mission/Values/Objectives. Should be able to indicate how each competency supports/reflects the big picture  Relatively Brief: Lengthy standards cause potential misunderstanding  Realistic: Should ensure that expectations are achievable; historical data, professional models and employee input are all helpful  Precise: Eliminate subjectivity.

For legal and practical reasons,

only

have as many ‘levels’ (i.e. usually 3 or 4) in your rating system as you can truly define/ describe, and result in generally consistent evaluations across trained raters

 Reevaluated: Should be reviewed at least bi-annually  Consistent: Standards for the same types of positions should be consistent across the organization Note: Ideally and typically, standards should be developed for

each level of performance.

From a practical standpoint, it is most important to initially develop standards for the expected level (i.e., Meets Expectations or Stage II of a 3 level competency.)

Walby and Associates LLC

12

Possible Levels / Stages of

Behavioral

Competencies

Advantages Disadvantages

Five Levels

 Provides potential for differentiation  Generally consistent with bell curve concept  Typically includes an ‘exemplary’ or ‘superior’ level, though this must be accurately defined to differentiate from ‘above average’ (typical Level 4) employees.  Must be able to differentiate 5 th level for defensibility; requires time to draft/develop meaningful distinctions  Oftentimes, only four levels are used in practice  Level 3 (middle) Rating is often perceived negatively, no matter how it is labeled

Four Levels

 Excludes a ‘middle’ rating, which is often perceived as average or negatively  Can allow for levels of ‘exceeds’, ‘fully meets’, ‘less than fully meets’, ‘does not meet’ (i.e. performance plan..)  May skew raters positively or negatively if levels are not defined well  May foster central tendency to 2 nd highest level, although this is usually a fully acceptable employee, and is the intent of the organization  A good approach for organizations that want to build a ‘most’ of our employees (e.g. 70- 80%) meet or fully meet expectations culture, and/or focus primarily on high/low  Fewer choices helps result in more rater consistency as long as the level are well defined  Oftentimes, only three levels are used in actual practice. 4th level is typically for individuals too new in position to evaluate or, more likely, individuals on a performance plan which often lead to termination.

Three Levels

 More consistency among raters when few choices  Typically, ease of completion and decision making among raters  Third level often needs clarification for use in probation, discipline or dismissal if top two are more positive  Does not allow differentiation of a top 5-10% or so, if this is truly the case and Company wants to recognize them

Walby and Associates LLC

13

Example of 3 Stage or Level

Behavioral

Competency

Behavioral Competency: ‘Managing Conflict’:

Definition: Deals effectively with others in potentially antagonistic situations; uses appropriate interpersonal techniques and methods to reduce tension and conflict among team members .

Needs Improvement  Does not always recognize when conflict exists or probe for interests of conflicting parties  Sometimes appears to avoid conflict, or allows it to expand when early intervention could help  Focuses too much on own interests rather than more broadly seeking other interests  Allows or fosters win/lose situations rather than seeking compromise  Personalizes conflicts or becomes defensive Meets Expectations*  Identifies when a conflict occurs and takes steps to address it  Accurately assesses when to get involved and when to let parties resolve the matter on their own  Recognizes differing interests and viewpoints, and allows expression of these in respectful manner  Recognizes potentially harmful or illegal (violence, dangerous, harassment, etc.) situations and takes appropriate action  Assists parties to achieve mutually acceptable ‘win-win’ solutions Exceeds Expectation  Highly skilled in recognizing early warning signs and takes appropriate steps to prevent issues before they escalate  Excels in transforming conflict into problem solving; insightfully diagnoses creative and effective solutions well accepted by others  Creates environment where differences are valued and used to achieve superior results  Proactively uses positive constructive techniques to help team members anticipate and effectively address potential conflicts * Common alternatives: ‘Solid performer’, ‘Fully acceptable’. Used if building a culture in which ‘most’ (70% to 80%) of employees are performing as generally expected.

Walby and Associates LLC

14

Sample

Technical

Competency Model Development Process

Best Practice Technical Competency Model Steps include:  Review corporate goals and talent management strategy analysis/development  Purposes of competencies (including alignment with other HR programs)  Identify job families and feasibility of process, inclusion, timing, etc.  Conduct job and work process analysis (as noted earlier)  Identify / define technical competencies (JA, tech panels, high performers, etc.)  Define proficiency standards, levels and career profiles: typically 4 - 5 levels for technical competencies (JA, tech panels, standard models, high performers)  Validate models (correlation, review of results, surveys etc.)  Develop total framework of competencies and levels (see next slides)  Incorporate into HR programs (recruitment, development, pay etc.)

Walby and Associates LLC

15

Sample Technical Competency Levels / Model

 From Sample Software Engineer Technical Competencies (see earlier slide #5 in this document), below are sample ‘4 level’ competency descriptors for:  Software Design and Coding  Software Testing

Competency Level I Level II Level III Level IV

Software Design and Coding Software Testing Develops/updates basic design documents. Debugs code for basic C++; familiar with coding tasks, rules, standards. Creates diagrams. Familiar with SW development tools and process. Tests basic software code for operational effectiveness and system integration. Prepares initial software test documents for standard applications. Develops/updates moderately more complex designs. Writes and debugs code for various C, C++. Knows coding standards. Creates diagrams; applies higher level SW tools Tests moderate complexity software code for embedded systems and manuals. Prepares SW for integration testing. Conducts performance, measurement and validation

Walby and Associates LLC

Implements requirements to develop, update complex documents; works with higher level and complex coding standards and diagrams. Proficient in highest level SW tools. Advanced proficiency in testing multiple program units concurrently. High level use of flowcharts to design overall test units used by all units. Leads development, creation, updating of all SW design requirement documents. Serves as role model in adhering to highest standard development processes. Designs, debugs most complex software. Directly leads and oversees all testing of software code in his/her programs and projects. Releases fully tested production and beta level software design. 16

Competencies in Salary Planning Using Pay Structures

 Now that we’ve discussed competencies – behavior and technical – AND their alignment with other HR functions and services,  It is important to explain and understand how competencies, competency models and, shortly, other components of jobs work within the context of: • • Various Types of Salary Structures Career Path and Level Guides  The following several slides introduce Salary Structures and best practices regarding how behavioral and technical competencies and models can work within these structures.

Walby and Associates LLC

17

3 Primary ‘Types’ of Salary Structures: Grades, Bands

Definition: Salary or Band ‘Range ’  The dollar amount extent (minimum to maximum) an organization will pay for jobs assigned to that band or range within a given pay structure.  Type 1. Traditional Grades: (most prevalent; used by 60% to 70% of companies)  Traditional grade structures typically have approx12 to 20 grades, are somewhat narrow: ‘Ranges’ typically 30% (nonexempt) to 60% (management).  Below is an example of a traditional grade, with a min to max range of $40,000 to $60,000, or

50%

($60,000-$40,000 = $20,000 = 50% of $40,000) Minimum 1 st Quartile Midpoint 3 rd Quartile Maximum $40,000 $45,000 $50,000 $55,000 $60,000 Common Advantages:  Cost Control (lower ‘range’ and maximum)   More Accurate Matching of Market Data with Grade Midpoint (More Grades) ‘Promotions’ to higher grades are easily defined Common Disadvantages:    Often need more grades to represent full spectrum of market pay data. Increased tendency for ‘reclassification requests’ even when minor job changes Transfers can be more difficult because of so many grades; narrower platform for competency pay.

Walby and Associates LLC

18

3 Primary ‘Types’ of Salary Structures: Grades, Bands

Type 2. ‘Wide’ (or ‘Wider’) Grades: (used by approx 20% to 25% of companies)  Wide grade structures typically have approx 10-12 to 18-20 grades with somewhat wider ranges of ‘typically 40% (nonexempt) to 100% (management).  Below is an example of a traditional grade, with a min to max range of $80,000 to $144,000, or

80%

($144,000-$80,000 = $64,000 = 80% of $80,000) Minimum $80,000 1 st Quartile $196,000 Midpoint $102,000 3 rd Quartile $118,000 Maximum $144,000 Common Advantages  Ability to capture/award higher levels of market pay (higher max)   Can better differentiate pay on various factors: performance, competencies, experience Often a sometimes better platform for person-centered (competencies) or hybrid/alternate pay approaches (e.g. behavioral competencies plus steps) and pay adjustments  Administrative / managerial flexibility; career/pay growth if limited promotional growth Common Disadvantages:   Potential increased costs, cost control and/or admin management due to higher maximums Usually fewer grades; more midpoint variance of a job’s grade assignment from market

Walby and Associates LLC

19

3 Primary ‘Types’ of Salary Structures: Grades, Bands

Type 3. Salary ‘Bands’: (Note: now used by less than 15% of reporting companies)  A 1990s+ trend involving consolidation of two or more ‘grades’ into fewer but much wider ‘bands’, typically used to develop ‘levels’ or ‘job families’.  Typically involve 3 to 5 ‘market’ or ‘control’ points within the wider Band Range (100% to 300%) as ‘anchors’ for given job values in a career path, job family.

200% Range

: 4 ‘Market/Control’ Points ($150,000-$50,000=$100,000= 200% of $50,000) Minimum Market Pt. A Market Pt. B Market Pt. C Market Pt. D Maximum $50,000 $70,000 $90,000 $110,000 $130,000 $150,000 Common Advantages   Enhanced support of person-based career development and progression within a job family/group Decreased emphasis on promotions; sometimes easier transfer of employees across divisions, depts. De-emphasizes organizational hierarchy; flexible platform for person-based pay Common Disadvantages    Requires higher managerial cost control/focus on competencies, performance, pay policy, control etc. Control points still usually based on job evaluation approach (e.g. market data etc – i.e. why do this?) Promotions can be harder to define, may involve only mid-band (market point) changes, etc.

 Typically requires high commitment to employee career and competency development

Walby and Associates LLC

20

Final Comments on Salary Structures

(Most small to midsize companies have 1 or 2 structures, except for geographic indexes)  Grades or bands within a given salary structure typically ‘

overlap’

based on the established ‘midpoint progression’ of each grade.



Example

below: 50% grades overlap by 10% midpoint progression.

Grade

Min 1 st Q Midpt 3 rd Q Max 4 $20,000 22,500 25,000 27,500 30,000 Min 1 st Q Midpt 3 rd Q Max 5 22,000 24,750 27,500 30,500 33,000 Min 1 st Q Midpt 3 rd Q Max 6 24,200 27,225 30,250 33,275 $36,300 

Greater salary range

midpoint progression (e.g. 16% to 20%+) =   Fewer grades to represent total pay spectrum of all jobs in the structure Sometimes requires clarification of what constitutes a ‘promotion’ 

Smaller salary range

midpoint progression (e.g. <10% to 15%)   More grades needed to represent total pay spectrum of all jobs in structure Easier clarification of what constitutes a ‘promotion’

Walby and Associates LLC

21

Example

of 5 HR 4 Stage ‘Tech Competencies’ Required for Job Levels in HR Generalist Career Path Level Guide & Pay Grades

Similar to prior page, except these are sample

HR

technical competencies.

Each ‘

Stage

’ of an

HR Technical Competency

should be assessed / attained prior to moving/promotion to the next level (e.g. HR Generalist II, III, etc.) job

BAND / GRADE (Example) LEVEL

Recruitment/Selection Employee Relations Compensation & Benefits Compliance Organizational Development

8 HR Generalist I Stage I Stage I Stage I Stage I Stage I 10 HR Generalist II Stage II Stage II Stage II Stage II Stage II Walby and Associates LLC 12 Sr. HR Genralist Stage III Stage III Stage III Stage III Stage III 15 HR Consultant Stage IV Stage IV Stage IV Stage IV Stage IV

22

Alternative:

5 HR 4 Stage ‘Tech Competencies’ Required for Job Levels in HR Generalist Career Path Level Guide & Pay Grades

In

this

sample company’s HR technical 4-stage competency model,

each competency stage is not needed to correlate with

a new HR Generalist role.

BAND / GRADE (Example) LEVEL

Recruitment/Selection

8 HR Generalist I Stage I

Employee Relations

Stage I

Compensation & Benefits Compliance Organizational Development

Stage I

- - - - - -

10 HR Generalist II Stage II 12 Sr. HR Genralist Stage III Stage II Stage I Stage I Stage I Stage III Stage II Stage II Stage II 15 HR Consultant Stage IV Stage IV Stage III Stage III Stage II Walby and Associates LLC

23

Best Practices: Linking Competencies to Fixed & Variable Pay

Recent Best Practice Research Data Indicates:  Approximately 60% to 70% of organizations have linkage between competency ratings/proficiency and base salary adjustments  Approximately half (50%) of the companies linking competencies to salary adjustments do so ‘informally’, or use ‘guidelines’ rather than strict amounts or percentages (providing operating managers some flexibility)  Whether

‘guidelines

’, ‘

strict percentages

’, or ‘

increase ‘ranges

’, approximately 60%+ of organizations linking competencies to salary use one of the following:  Factor for salary adjustments

within

job ranges (most common) • Behavioral with or w/o technical competencies, or include goal attainment  Competency levels are aligned with ‘

target salary’

or ‘

pay zone’

within bands  Developmental pay increases are typically separate from, but often added to, performance increases  Approximately 40% of competencies link competency ratings to

variable pay

, commonly as small ‘development bonuses’ or ‘incentive award modifiers’.

 Approx 70%+ of companies use competencies (usually ‘technical’, but also ‘behavioral’) as factors in promotion to a higher grade

Walby and Associates LLC

24

Sample

Salary Grade Progression

‘Guideline’

based on Behavioral

and/or

Technical Competency Rating/Proficiency

Salary Range Quartiles (50% range Min to Max) Min: $60,000 1 st Q $67,500 Midpt: $75,000 3 rd Q: $82,500 Max: $90,000

First Quartile Second Quartile Third Quartile Fourth Quartile Sample Guideline for Salary Progression Scale within Band / Range Above Stage I Stage II Stage III Average Overall Behavioral Competency Rating Scale ↑ Stage I Stage II Stage III Stage IV Average Overall Technical Competency Rating Scale ↑

Relevant ‘Guidelines’ Research Data regarding Increase for Top Performers :    Approx 25% of companies establish 125% of average increase for top performers Approx 50% of companies establish 150% of average increase for top performers.

Approx 20% of companies establish 200% of average increase for top performers

Walby and Associates LLC

25

Sample

Competency Pay-Based Adaptation of

Merit Matrix

Sample

Approach to Annual Base Salary Increase/Adjustment in a Pay Grade: (Behavioral competencies/factors are used similarly for increase guidelines in 60% of companies)

Position in Salary Range: Top Third Structure only increase Average to Slightly Below Average Increase Lump Sum Similar to Average Middle Third Bottom Third Structure only Increase No Increase or Structure Only Increase Average Pay Increase (e.g. 3%) Above Average Pay Increase (Average + 1% 2%) Above Average Pay Increase (Average +1%-2%) Large Pay Increase (Average plus 3%-5%) Low Mid High Separate Behavioral (primarily) OR Combined Competency (Behavioral/Technical) Rating Walby and Associates LLC

26

Competency ‘Blocks’ Can Use Fixed Dollar Amounts or Percentages in Pay Bands

(note: less often used due to complexity)  Each level of each competency attainment is affiliated with either a

fixed dollar amount

or

a percentage of the total width

of the salary range  Alternatively, or in tandem with this approach, employees may receive a

‘one time’ (lump sum)

award for attaining

new competency levels

Level 5 ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ Range Maximum Level 4 ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ Level 3 ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ Level 2 ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ Level 1 Range Minimum ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ ‘X’ % of Range or $ Competency ‘A’ Competency ‘B’ Competency ‘C’ Competency ‘D’ Competency ‘E’ Competency ‘F’ Walby and Associates LLC

27

Competencies in Career Path, Salary Increases, Level Guides

 Now that we’ve discussed competencies – behavior and technical – AND their alignment with other HR functions and services, AND their potential application to salary structures pay adjustments,  It is important to explain and understand how competencies & models and

other components of jobs

work within the context of Career Path and Level Guides along with salary progression. 

Key Points and Distinction:



Behavioral Competencies

are

most often used

to adjust salary for an employee

within

his or her assigned grade range in a structure.

• i.e. Traditional performance evaluation allows moving ‘through’ range.



Technical Competencies

are

most often used

in

establishing and defining (and promoting into)

various levels in a Career Path / Level Guide

along with other job components.

• The following slides introduce best practice Career Path Level Guides using both

Technical Competencies

and

Other Job Components

.

Walby and Associates LLC

28

Other Key Job Components in Establishing Career Path Level Guides

 It is important to now identify those job components commonly used

in tandem with

competencies, other HR functions, and pay structures to establish Career Path Level Guides, which can further enhance any company’s approach to total career development for employees

AND

 How all these factors, working collaboratively, directly contribute to  Employee career satisfaction  Enhanced employee efficiency, proficiency, motivation, retention  And, ultimately, using our most important resource –

our employees

– to achieve corporate success – operationally and financially.

Walby and Associates LLC

29

Other Key Job Components

in Establishing Career Path Level Guides

There are several additional job components that are important, research Indicates, and approximately 70% of ‘best practice’ companies anchor their Career Path Level Guides with the following:  Technical Competencies (as discussed herein so far)  Overall Scope and Basic Roles and Responsibilities of one’s job  Financial, Decision-Making and other levels of Authority  Primary Internal and External Level of Interface and Communications – including written and face to face.  Report Levels – Upwards & Downwards (Level/Number of Reports)  Minimum and Preferred Level of 1) Education and 2) Experience

HOW? – Sample on Next Slide

Ideally, EACH of the Above Components should be briefly described within EACH of the levels in a Job Family Career Path Level Guide (use Job Analysis, Expert Panels, Consultants, Adapt Std Models, etc.)

Walby and Associates LLC

30

Job Components in

Sample Accting

Career Path Level Guide

Position /Title (Accting) Preferred /Minimum Education Minimum Years of Related Experience Director/ Sr. Manager

MBA required Generally, 12 to 15+ years

Salary Grade

15

Manager Supervisor

B.S. Accting or Finance, MBA Preferred B.S. Accting or Finance, MBA Preferred 10 to 12 years 8 to 10 years

Lead Accountant

B.S. Accting or Finance; start MBA 6 to 8 years related experience

Senior Accountant

B.S. Accting or Finance 4 to 6 years related experience

Intermed Accountant

B.S. Accting or Finance 2 to 4 years related experience

Associate Accountant

B.S. Accting or Finance < 2 years related experience 13 12 11 10 9 8

Grade Midpoint Tech Comptcy #1 Tech Comptcy #2 Tech Comptcy #3 Tech Comptcy #4 Roles, Job Respons Level Fin and Ops Decisions Level/Type of Int/Ext Commun Report Level/Staff Managemnt

$140,000 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx Level 3 xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxx $116,000 $104,000 $95,000 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx Level 2 xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxx Level 5 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxx Etc. xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx x Level 1 xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxxx xxxx Level 4 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xx Etc. xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxx N/A $82,000 Level 3 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxx Etc. xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxx N/A $68,000 $56,000 Level 2 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx x Level 2 xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx x Level 1 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxx Level 1 xxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxxxxxxxxx xx N/A N/A Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Etc.

Walby and Associates LLC

31

Limited Time to Develop Competency Descriptors? Go Generic

Generic Competency Level Descriptors 5

Demonstrates comprehensive, expert knowledge; applies competency level in exceptionally difficult situations; serves as internal resource and advises others.

4 3 2

Demonstrates broad understanding and application of the competency in difficult situations; generally requires no or only limited oversight. Provides guidance to lower levels. Demonstrates solid understanding, proficiency and application of the competency in standard or expected situations. Generally involves periodic oversight and review by Supervisor or Manager. Demonstrates understanding and application of the competency in some basic or standard situations. Frequent ongoing review of all work by Supervisors or Team Leader.

1

General awareness and/or application of the competency in basic or simple situations. Close and extensive guidance regularly required by exempt and/or higher level professionals.

Walby and Associates LLC

32

Career ‘lattices’ (lateral moves) allow career paths to become communications vehicles for demonstrating opportunity

Senior Planning Manager Project Manager Planning Manager Planner Sr. Tech Trainers Service Level Manager Sr. Tech Writers

Tech Trainer II

Tech Writer II Tech Trainer I Tech Writer I Project Leader Sr. App Tester

App Tester II

App Tester I Client Support Analyst

CAREER LATTICES Walby and Associates LLC

Sr. Business Analyst Business Analyst App Analyst II App Analyst I Sr. Rel. Mgmt. Specialist Rel. Mgmt.

Specialist Client Support Specialist Sr. Client Support Analyst

Best Practice / Successful Competency Pay Communications

 Enlist full top management support throughout program development  Plan the Communications Strategy: Message, Meetings, Media, Timing  Most companies use various group meetings to outline program basics  Company compensation strategy should be included in all group mtgs  Ensure understanding of alignment of competencies within the company’s performance management system  Most companies do not disclose the entire salary structure in meetings  Companies claiming highest program success engage in one-to-one meetings between manager and employee following larger group mtgs  Employees should understand their grade and pay range, where they are in the range and why, know the standard ‘career path’ (and alternatives) within their discipline, how to progress further in range and be promoted  Conduct follow-up surveys of all participants: compare evaluations by level (e.g. management vs. exempt) and by department

Walby and Associates LLC

34

Competency-based and Other Salary Management Best Practices

Thank You Very Much for Attending!!

Further Questions or Discussion?

Please see Brian when session is completed.

Walby and Associates LLC

35