If you have been following the Hybrid, Shmybrid series, you may have noticed by now that there are no hard and fast rules when it comes to hybrid jobs. So how do you build an approach that is "working for the forces of good" (shall we say)? Or at least following a systematic decision process in a complex and confusing situation?
I thought I'd put three of the toughest questions I could imagine to our guest experts Margaret Dyekman of Corporate Compensation Servicesand Judy Canavan of HR + Survey Solutions. The kinds of things that compensation gurus have to search their souls about.
(PS Check in on October 12 when Margaret D. and Judy share the process steps they would recommend for our hybrid job challenges. It's the final Hybrid, Shmybrid posting, for Pete's sake.)
In your consulting experience, what are the biggest "mistakes" you have seen when clients price hybrid jobs?
Judy: The one that I see most often, and therefore is probably the biggest mistake, is when a comp colleague takes the weighted average of the market data for two (or more!) benchmark jobs. I believe they are diluting the true value of the job with that approach.
Margaret D.: That's my experience, too. For example, consider a large museum that combines the job of Head of Admissions and Head of Gift Shop/Retail into one position. Analysis shows the incumbent spends 60% on Admissions and 40% on Retail.
Let's say an analyst takes 60% of the value of the first job and 40% of the value of the second, then averages them together to get a "market rate." What do we have? A somewhat higher than median rate for the Retail benchmark, and a lower than median rate for the Admissions benchmark. Rather than recognizing the complexity of "wearing two hats," the analyst actually ends up watering down the benchmark rate for the higher-paid Admissions position. And, odds are, the incumbent will notice that pretty soon.
Would there ever be a situation where a hybrid job wouldn't qualify for a change in pay grade or salary rate?
Judy: The answer is yes, but this is when we start talking about compensation as a little bit of art and a little bit of science. There are times when added responsibilities do not justify movement of the job into a higher pay grade. After all, combining Mail Room Clerk responsibilities with File Clerk responsibilities may not justify a higher pay grade.
Or, something I run into often with middle managers in smaller companies. Let's say that part of their job involves responsibilities that would otherwise be delegated to a lower level report. Nothing about this indicates that the job should be paid more or promoted.
With executives, additional responsibilities tend to be transitory -- a new plant is opening or an office is relocating or there's some problem hiring a replacement for the last job incumbent. Remember that it will be politically challenging or well nigh impossible to downgrade the exec when the responsibility inevitably gets handed off.
Margaret D.: In addition, sometimes the grade/range structure itself does not easily accommodate smaller changes in responsibilities, even at the senior level. We have seen grade/range structures with a midpoint differential of 20% for all exempt jobs, which means the organization has a very flat structure. Adding in a differential for more responsibilities may not actually push the job into the next pay grade.
Judy: A good practice in most situations is to start by comparing the incumbent's pay rate to the market rate. Once you look at the employee's performance history and position in range, you might find that a salary adjustment is more appropriate than a promotion.
Have you ever created a new grade for a hybrid job?
Margaret D.: Normally we are working within the company's current grade/range structure and moving the job into the appropriate higher grade. If the company uses market reference points instead of a structure, then we may be adding a new rate.
Judy: Don't forget that your work -- promotions or salary increases -- may make incumbents eligible for incentives for the first time, or increase their incentive target range. This could make you very popular, but these days you want to confirm that the company has the money to spend before the employee finds out different!
Margaret O'Hanlon is founder and principal of re:Think Consulting. She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results. Margaret brings deep expertise in total rewards communication to the dialog at the Café; before founding re:Think Consulting, she was a Principal in Total Rewards Communications with Towers Perrin. Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University. Creative writing is one of her outside passions, along with Masters Swimming.
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